A California bill requiring Big Tech platforms to pay revenue to some digital news providers for online content survived a suspense file hearing on Aug. 15, but the legislation must clear another hurdle before it’s eligible for a floor vote.

Assembly Bill 886, also known as the California Journalism Preservation Act, was placed on the suspense file in early August as the state Senate considered its potential fiscal impact. On Thursday, it survived the Senate Appropriations Committee hearing on a vote of 4–2, with Republicans voting no.

The bill was authored by Democrat Assemblywoman Buffy Wicks and introduced early last year. It’s based on the argument digital tech platforms have “monopolistic” control over the content journalists produce, Wicks wrote in a June analysis of the bill.

“It’s the fact that as news moved online, massive, monopolistic technology platforms coerced newsrooms to share the original content journalists produce, which the platforms sell advertising against, while providing little to no compensation in return,” she said.

Nearly 2,900 newspapers in the United States closed between 2005 and 2023, resulting in the subsequent loss of over 43,000 newspaper journalist jobs nationwide, largely in metro and regional newspapers, according to a study published last November by Medill, Northwestern University’s journalism school.

According to an analysis from the Press Gazette—a London-based online magazine of journalism industry news—jobs in news media have continued to decline significantly since 2023. In January, the Los Angeles Times, one of the largest newspapers in California by circulation, laid off at least 115 staff members, roughly 20 percent of its newsroom, which already had a 13 percent reduction last summer.

The bill would affect tech platforms with at least 50 million active monthly users in the United States or with net annual sales greater than $550 billion, per legislative analyses. Such companies would have to pay a percentage of their revenue to digital news providers for news content placed on their platforms. The amount has not yet been determined, but the legislation proposes tech platforms should submit payment to news providers annually or through an arbitration process.

Online tech platforms in the bill’s judicial analysis are defined as websites, mobile apps, digital assistants, or online services that provide access to news articles, works of journalism, or other content.

In June, Meta—the parent company of Facebook—said in a statement that they would be forced to remove California news from their social media sites, including Instagram, “rather than pay into a slush fund that primarily benefits big, out-of-state media companies under the guise of aiding California publishers.”

According to the most recent judiciary analysis, AB 886 would require journalism providers receiving funds from tech platforms to pay at least 70 percent of it to their journalists and support staff.

Technology industry coalition Chamber of Progress, headquartered in Virginia, argued against the bill in 2023, noting in an Assembly analysis, “While the bill intends to support journalism, publishers benefit from the traffic to their sites that platforms generate. Disrupting that relationship will not address the core goals of this bill.”

Meta made a similar argument this summer saying challenges to the traditional journalism model predated the popularity of social media.

“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,” Meta said in a statement in June to The Epoch Times.

Additionally, this spring, Google announced it had begun removing California news websites from search results in response to the possibility of paying steep fees to media companies for the content.

In a blog post written by Google Vice President of Global News Partnerships Jaffer Zaidi, he argued that the fees would be nothing more than a “link tax” that the company would have to pay “for simply connecting Californians to news articles.” He said Google already helped publishers “of all sizes grow their audience” at no cost, and said the bill favored “media conglomerates” who would use the funds from fees collected to buy up more California newspapers and put small publishers at a “disadvantage.”

“A healthy news industry in California will require support from both the California government and a broad base of private companies,” he wrote.

A sign is posted in front of a Google office in San Francisco, Calif., on April 26, 2022. (Justin Sullivan/Getty Images)

On Thursday, the appropriations committee sent the bill to the rules committee, which means the legislation will require another round of discussion and approval before it’s sent to a Senate floor vote.

Senate President Pro Tempore Mike McGuire—a Democrat who also serves as the rules committee chair—said Senate lawmakers were working closely with Assembly leadership to work on the details of the legislation.

“[Wicks’s] bill ... is needed in order to ensure that newsrooms are being compensated fairly for their content,” he told The Epoch Times in a statement.

McGuire said he believes it’s also important to pass another bill, SB 1327, related to the issue.

That bill was co-authored by McGuire and would implement a 7.25 percent tax rate on tech platforms that harvest data from users. Lawmakers estimate it would bring in $2.5 billion annually. That money would be placed in a fund to be divided among California news outlets as a tax credit or for journalism grants, according to the legislation.

McGuire said the legislation would work “in tandem” with AB 886 “to help level the playing field” between tech platforms and news providers.

The Los Angeles Times newspaper headquarters in El Segundo, Calif., on Jan. 18, 2024. (Patrick T. Fallon/AFP via Getty Images)

The Journalism Preservation Act has also gained support from the News Media Alliance, a nonprofit advocacy group representing thousands of media organizations in the United States and Canada.

“For too long, Big Tech has used content produced by local publishers for their own benefit—all too often without permission or compensation—while publishers have struggled to survive,” said the alliance’s CEO Danielle Coffey in a statement Aug. 15.

Aug. 31 is the latest the bill could be approved in the Senate before the Legislature adjourns for this session. If so, it would then go to Gov. Gavin Newsom for either his approval or veto.

Travis Gillmore and Jana J. Pruet contributed to this report.