by Rod Sims and Anya Schiffrin
The California Assembly recently voted in favor of journalism by supporting the proposed California Journalism Preservation Act (Assembly Bill 886), which would require social media companies to pay a “usage fee” to publishers for the news content that the platforms benefit from. The publishers, in turn, would have to spend at least 70% of the fees they receive on journalists or support staff. The money would come out of the platforms’ advertising revenue and the amount would be determined by arbitration.
The bill now goes before the state Senate. By passing the law, California would be just one of many jurisdictions looking to emulate Australia’s News Media Bargaining Code, developed by the Australian Competition and Consumer Commission, which became law in 2021. Canada’s equivalent will likely become law in a few months and now governments in Britain, Brazil, Indonesia, New Zealand, South Africa and Switzerland are all considering similar laws.
Around the world, many journalism outlets are in crisis with advertising revenues plummeting while Google and Meta use their news content to attract users — and advertising dollars — without paying for it. Attempts by media companies to receive some payment for their work have gone nowhere for years. Australia’s groundbreaking law directly addresses this bargaining power imbalance.
We now have two years of Australian experience to learn from. The estimated payout to Australian publishers has been well over $140 million each year, with both small and large media organizations benefiting from that revenue source. Google has formed commercial arrangements with virtually all qualifying media outlets, while Meta has completed deals with outlets employing some 85% of Australian journalists.
A review of the news bargaining code by the Australian Treasury department in late 2022 deemed the code a success. Hundreds of new jobs have been created, with employment data showing a 46% increase in job ads for journalists. For example, the Guardian Australia added 50 journalists, bringing its newsroom total to 150. Journalism professors also say that more of their students are getting hired and some job vacancies are going unfilled.
Opponents of the Australian law argued that most of the money would go to the largest media outlets. That is, of course, true since those organizations employ the most journalists and produce the most news used by Google and Meta. But small media groups have benefited enormously from the law, just as small media groups will in California. Country Press Australia, which represents 160 very small publications, has been able to negotiate excellent deals for its members with both Google and Meta, which will help underwrite their prosperity.
Another argument put forward by opponents is that Google and Meta do not always advertise against media content. That is not the point; media content attracts users to the platforms where they can see advertisements.
Google search would be far less useful if it did not offer users access to media content ranging from the best new movies to court cases to COVID-19. By showing the headline and a few lines of news in Google search, Google skims off the most valuable part of the news without sharing the monetary benefits with news outlets. And imagine how much less useful your daily Facebook feed would be with no journalist-produced news content at all.
Opponents of the law have also argued that it could benefit media organizations that traffic in misinformation or biased reporting. But laws should not choose one outlet over another. Australia has four large media companies, many medium-sized companies and a huge number of smaller media outlets. They all benefited from deals with Google and nearly all benefited from Meta deals. Journalism as a whole was the winner.
Meta has threatened to block all news from Facebook if the California law passes, just as it did in Australia for a week before backing down. Facebook blocked Australian news in early 2021 during the COVID pandemic and bush fire season which prevented potentially lifesaving news getting out. The popular backlash against Facebook was swift.
This is a critical time for journalism. News organizations are struggling to stay alive while huge internet platforms that benefit financially from journalism are freeloading from content providers. This imbalance is a serious threat to information in any free society.
The California Journalism Preservation Act, like the Australian law, is a vital piece of legislation that will help keep journalism sustainable.
