Facebook parent firm Meta threatened to remove news content from Facebook and Instagram in its home state of California if the state legislature approves a bill that would force social media companies to pay outlets.
The proposed bill, also known as the California Journalism Preservation Act, would require Big Tech companies such as Meta and Alphabet to pay a “journalism usage fee” to news producers and media outlets each time their articles or work appear on online platforms, which earn through advertising.
In turn, the bill requires news publishers to invest 70 per cent of the profits from the usage fee in supporting journalism jobs, for example paying journalists or creating new positions.
“If the Journalism Preservation Act passes, we will be forced to remove news from Facebook and Instagram rather than pay into a slush fund that primarily benefits big, out-of-state media companies under the guise of aiding California publishers,” said Andy Stone, policy communications director at Meta.
“The bill fails to recognise 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, well before Facebook was widely used.
“It is disappointing that California lawmakers appear to be prioritising the best interests of national and international media companies over their own constituents.”
Meta's stock price jumped 0.84 per cent to trade at $264.72 a share on Wednesday.
The California-based company earned a net profit of more than $5.7 billion in the quarter that ended on March 31. This was 22.7 per cent higher compared to the last three months of 2022.
The social media company’s revenue rose 3 per cent annually to $28.6 billion in the first quarter of 2023 from the same period a year earlier, after three consecutive quarters in which it had declined.
Meta has been embroiled in similar frictions over payments to news publishers at the federal level and in other countries.
In December, Mr Stone said Meta would remove news content from its platforms if the US Congress were to pass a law similar to the proposed California legislation.
“If Congress passes an ill-considered journalism bill as part of national security legislation … we will be forced to consider removing news from our platform altogether rather than submit to government-mandated negotiations that unfairly disregard any value we provide to news outlets through increased traffic and subscriptions,” Mr Stone said that time.
And earlier this month, Meta said it would end news content on Facebook and Instagram in Canada if parliament were to pass similar legislation.