Making Online Media Giants Pay for the Industry They Crushed

While speaking at a recent journalism conference in Sacramento, Google’s VP of News, Richard Gingras, objected when asked if legacy media such as newspapers could survive, given the vast migration of advertising dollars to giants like Meta and Google.

Gingras, who was speaking on the second day of the California News Publishers Association (CNPA) annual conference, replied by claiming that only around 30 percent of digital ad spend went to Google.

It was a telling remark, one that belied the attitudes major tech companies have exhibited as they’ve effectively cornered the online ad market and then tried to pass it off as normal business. Meanwhile, traditional media outlets have been shedding jobs and days of service and sometimes ceasing operations entirely.

Now, a new bill in the California legislature could challenge this paradigm.

'I’m concerned about our democracy and access to information—and the misinformation that exists.' Asm. Buffy Wicks

Assemblymember Buffy Wicks (D-Oakland) introduced AB 886, the California Journalism Preservation Act on March 20. The bill “directs big tech companies to pay publishers a ‘journalism usage fee’ each time they use local news content and sell advertising alongside it” and requires publishers to invest 70 percent of profits from this fee into journalism jobs.

In an interview with California Local, Wicks said she believed free press was essential to democracy and that newspapers around the state were essentially being forced to give content to companies like Meta and Google without adequate return.

“I don’t mean to be hyperbolic about it,” Wicks said, "but I’m concerned about our democracy and access to information—and the misinformation that exists—and ensuring that we are really supporting our publishers."

AB 886 has been referred to the Assembly Privacy and Consumer Protection Committee, where it will be heard on April 11. It begins its legislative journey while this week in the U.S. Senate, Amy Klobuchar (D-Minn.) and John Kennedy (R-La.) reintroduced a similar bill, the Journalism Competition and Preservation Act.

Either bill could face a long path to becoming law. In California, aside from the standard process of needing to pass both houses of the legislature, be signed into law by Gov. Newsom, and withstand legal challenges, AB 886 would directly impact tech giants, the kinds of companies that tend to donate prolifically to lawmakers on both sides of the political aisle.

That said, the bill already has some early supporters among media advocacy groups.

CNPA general counsel Brittney Barsotti said her 800-member organization, which represents newspapers across the state, is supporting AB 886. She noted that CNPA and another group, the News/Media Alliance have worked with Wicks’ office on drafting the bill’s language.

This bill is just ensuring that journalism providers are being compensated for [the] use of their content.'
Brittney Barsotti, CNPA general counsel

Barsotti helped lead opposition in the 2021-22 legislative session to SB 911, a bill from Sen. Steve Glazer (D-Orinda) that would have created a governmental board to distribute funds to journalistic operations in the state. Glazer’s bill never garnered much support and died in committee after several months. But Barsotti insisted AB 886 is different and better.

“This bill doesn’t have government deciding who to give money to,” Barsotti said. “There were several structural issues with (SB 911) a bill that didn’t work for our members or our media partners that was based on a philanthropy model. This bill is just ensuring that journalism providers are being compensated for [the] use of their content by big tech.”

Danielle Coffey, executive vice president and general counsel News/Media Alliance also touted the bill in a brief interview with California Local.

“It compensates news publishers for our valuable content that we don’t receive today because the big tech platforms take the revenue while keeping users inside their walled garden, so we actually don’t get paid for the significant portion of the consumption that takes place inside search and social,” Coffey said.

Coffey disputed Gingras’s claim that Google receives only around 30 percent of thetotal advertising spend, saying, “We actually believe it’s the opposite, that they take up to 70 percent, leaving us as little as 30 percent.”

Twitter auto-replied to a request for comment with a poop emoji.

In December 2022, Axios published data from Insider Intelligence which estimated that Google and Meta would collectively capture 48.4 percent of the US digital ad revenue for the year, with 28.8 percent going to Google and 19.6 percent for Meta “down from 54.7 (percent) at their peak in 2017.”

Axios cited the biggest challenger to Google and Meta as Amazon, which is slated to receive 12.7 percent of digital ad spend in the US by next year.

It is unclear at this juncture how major tech companies feel about AB 886.

Meta didn’t respond to an email sent to its press address seeking comment. A Google spokesperson (and college friend of this reporter) didn’t respond to a LinkedIn message. Meanwhile, Twitter, which has purportedly lost half its value and 80 percent of staff since its acquisition by Elon Musk late last year, auto-replied to a request for comment with a poop emoji.