Meta threatens news ban in California over bill requiring it to share ad revenue

Facebook parent Meta Platforms is threatening to ban users in California from sharing news on its website if the state passes a bill that would require online platforms to pay fees to news publishers.

The California assembly is scheduled to vote on the bill, called the California Journalism Preservation Act, on Thursday. If lawmakers pass the measure it will move to the state senate for another vote. The chambers have until September 14 to pass bills this year before ithe legislative session ends. 

“If the Journalism Preservation Act passes, we will be forced to remove news from Facebook and Instagram, rather than pay into a slush fund that primarily benefits big, out-of-state media companies under the guise of aiding California publishers,” Meta said Wednesday in a statement tweeted by spokesperson Andy Stone.

The proposed bill is one of several legislative pushes across the U.S. to effectively redirect some of the billions of dollars big tech companies generate every year from advertising on news content to struggling local newsrooms and other media publishers. The act would require Meta to pay eligible media companies usage fees based on a percentage of the ad revenue its platforms generate. For their part, publishers that receive the usage fees would would be required to use at least 70% of that money to pay their staff. 

California Assemblymember Buffy Wicks, who sponsored the Journalism Preservation Act, said the legislation would help sustain local news operations, noting that more than 100 media players in the state have folded in the past 10 years. 

“As news consumption has moved online, community news outlets have been downsized and [are] closing at an alarming rate,” Wicks said at a hearing in early May, according to California Globe, a local independent news outlet.

Meta rejects claims that platforms including Facebook and Instagram have hurt the news business. In its statement on Wednesday, the company argued that the local news industry was losing steam long before Facebook became a popular forum for sharing news.

“The bill fails to recognize that publishers and broadcasters put their content on our platform themselves and that substantial consolidation in California’s local news industry came over 15 years ago, well before Facebook was widely used,” Meta said. 

Meta did not immediately respond to CBS MoneyWatch’s request for comment. 

Calls to tax big tech

Efforts to charge online news sharing platforms have intensified in recent years. The Journalism Competition and Preservation Act, a federal bill currently being considered by Congress, would permit U.S. publishers to join forces to demand payments from big tech platforms.

Meta is also facing pressure outside the U.S. In 2018, Britain’s Labour Party proposed levying a tax on large tech companies to support the diversity and competitiveness of the country’s public journalism, Reuters reported. 

Meta pushed back against a similar push to force tech companies to pay media publishers in 2021, banning Australian users from posting news-related content to its platforms for several days.