The bill, which cleared an important Assembly Judiciary Committee hearing Tuesday with bipartisan support, would require Google and Meta to share with California media companies their advertising revenue stemming from the news and other reported content. The amount would be determined through an arbitration process.
"As news consumption has moved online, community news outlets have been downsized and closing at an alarming rate," said Assemblymember Buffy Wicks of Oakland, who authored the bill, said during the Tuesday hearing.
The bill would mostly benefit newspaper chains and hedge funds that have gutted local newsrooms in the last few decades, he said. His group represents more than 50 local newsrooms in California, 80 per cent of which are operations with five or fewer journalists. Most of those news outlets wouldn't meet the requirements to benefit, he said.
Similar efforts to bolster local news companies have been attempted across the United States, Australia and Canada, among others, with various levels of success. Australia adopted a law in 2021 that resulted in US$140 million in payments to news companies from Google and Facebook last year. Despite clearing another hurdle Tuesday, questions remain about how the bill would be implemented. Some lawmakers noted that Meta's Facebook and Google do not operate the same way. Google scrapes news websites and provides users with summaries of reported content, while Facebook shows content such as photos, videos and articles to users based on their activities on the platform.