Federal bill to make online platforms pay for news they use advances while California bill slows

While California lawmakers have put the brakes on a bill that would make the likes of Facebook and Google pay news publishers for using their stories, a similar federal bill has once again advanced in Congress.

But it remains to be seen whether this year’s version of the Journalism Competition and Preservation Act advances beyond the U.S. Senate, where an earlier version quietly died last winter.

Once again co-authored by Senators Amy Klobuchar, a Minnesota Democrat, and John Kennedy, a Louisiana Republican, S.1094, the Journalism Competition and Preservation Act, sailed out of the Senate Judiciary Committee last month on a 14-7 vote with broad bipartisan backing.

Klobuchar, the daughter of a former newspaperman, told the committee that since 2005, some 2,200 local newspapers across America have closed and a third of U.S. newspapers that existed two decades ago are expected be gone by 2025.

“This isn’t because of a lack of talent or a lack of things to cover or a lack of interest in the news, it is due to changing revenue and where that revenue is going,” Klobuchar told the committee. Newspaper ad revenue fell from more than $37 billion in 2008 to less than $9 billion in 2020, she said, while Google reported ad revenue of $55 billion in just the first quarter of 2023.

“The refusal to compensate those who create the news content helps drive their huge digital ad businesses,” Klobuchar said.

But the bill has divided California’s two Democratic senators. While Dianne Feinstein supports it, Sen. Alex Padilla said he has the same concerns he did last year, that it fails to ensure money paid to news publishers would support newsrooms, and that internet platforms may have to publish material they find objectionable.

“We’re considering the same bill with the same flaws,” Padilla said at last month’s hearing.

A similar California bill also has faced headwinds. Earlier this month, Assemblywoman Buffy Wicks, an Oakland Democrat, announced she was delaying consideration of her bipartisan California Journalism Preservation Act, AB 886, until next year while she works to address concerns and build support.

Wicks had said California should pursue its own law regardless of attempts at federal legislation. And her staff this week said the decision to put her bill on a two-year schedule wasn’t influenced by last month’s advancement of the federal bill, but rather her stated desire to “get this policy exactly right.”

Advocates say such legislation is gaining momentum overseas as the internet upends the business models of news organizations around the world. Australia approved the first such law in 2021 and Klobuchar said it is providing about $140 million each year to local news outlets and helped them hire more journalists.

“Despite all the fear-mongering from tech lobbyists, the internet did not break in Australia when this happened,” Klobuchar said. “News outlets are getting compensated and hiring journalists, and Google and Facebook did not go under in the land Down Under. We’re excited that these bills are being considered across the world, from the United Kingdom to New Zealand to Switzerland to Brazil and other countries.”

The federal bill would apply to online platforms that have at least 50 million U.S.-based users and market capitalization of more than $550 billion. It would require the tech companies to negotiate with eligible news organizations that have fewer than 1,500 full-time employees on a price for use of their news reports. It would bar platforms from discriminating against news outlets based on their participation in negotiations, size or views expressed in their news content.

Google, Meta and other technology companies have vigorously opposed such measures. Meta in May threatened to strip news reports from Facebook and Instagram if the California bill passed, though that didn’t deter the Assembly from passing it and sending it to the state Senate. Online platforms have made similar threats overseas.

But such laws, backed by most traditional print and broadcast legacy news organizations, have drawn opposition from other seemingly unlikely allies representing business interests, civil rights groups, as well as free-internet and free-speech advocates.

Natalie Campbell, senior director of North American government and regulatory affairs for the Internet Society, says such laws amount to “link tolls” that threaten the internet’s open-access spirit and will lead to a “splinternet.”

Kristian Stout, director of innovation policy at the International Center for Law and Economics, a nonprofit policy think tank, points to two key concerns. The anti-retaliation provision would likely face free-speech court challenges from platforms arguing they can’t be forced to publish material they object to. There also are fair-use doctrines that protect creative content but allow sharing of information.

“These bills run right up against the First Amendment,” Stout said. “I don’t see how they survive in court.”

But Kennedy argued it’s just a matter of respecting creative content rights that also protect online platforms — without which, he colorfully suggested, a “Daily Cone Head” news outlet could put a version of Facebook on its website and siphon away the social network’s ad money.

“You can bet,” Kennedy said, “that Facebook — and I certainly wouldn’t blame them in that instance — would be chasing the Daily Cone Head like they stole Christmas.”