A bill advancing through the California legislature would force Big Tech companies to pay news publishers whenever their articles are linked or displayed.

This month, the California Assembly voted to advance the California Journalism Preservation Act (AB 886), a bill that would compel companies like Meta and Google to pay a “journalism usage fee” to benefit news organizations. If AB 886 is signed into law, Meta has already announced that it would remove news from Facebook and Instagram within California. Although the bill’s sponsors tout their efforts as protecting local newsrooms at risk of shutting down, the proposed legislation simply enables the government to reward select firms and industries at the expense of disfavored ones.

This isn’t the first time a government has interceded on behalf of publishers. Over the past few years, other countries have enacted similar “link tax” proposals that require digital platforms to pay for links that direct to news publications. In 2021, Australia passed the News Media and Digital Platforms Mandatory Bargaining Code, which prompted Meta to temporarily ban Australian users from sharing news articles on Facebook. 

On the federal level, U.S. lawmakers are attempting to push forward the similarly-titled Journalism Competition and Preservation Act, which would enable news outlets to cartelize and force online platforms to negotiate under unfavorable terms or accept binding outcomes imposed by an arbitrator. 

The California Journalism Preservation Act borrows significantly from these other proposals. According to the provisions in AB 886, arbitration proceedings would determine the percentage of advertising revenue that tech companies would pay towards a monthly “journalism usage fee.” Eligible digital journalism providers would each take a cut of this fee. The allocation scheme benefits the largest media companies, which would have the most content posted on any given platform, both by users and their widely-followed journalists. 

The bill’s author, Assemblywoman Buffy Wicks, claims that she is “not interested in a debate between Rupert Murdoch and Mark Zuckerberg,” focusing instead on the “free press [which is] in our Constitution, and it is at risk right now.” The First Amendment is a negative right, a restraint on the government so that people may be free from intrusion. Article I of the California Constitution, which also protects the press, is similarly written so that “no law shall be passed” to abridge journalists’ right to speak freely. It is ironic, then, that Assemblywoman Wicks appeals to a safeguard against government intrusion to justify greater intervention.

AB 886 amounts to nothing more than industrial policy. It is a subsidy that allegedly allows the government to fix market failures by supporting what it believes are vital industries and firms. Such policies are prone to high costs and political manipulation, often failing to achieve what it intends. This bill gives lawmakers a means of taking profits from businesses that have fallen out of public favor and funneling the money to those they consider more worthy or essential. It is redistribution, and it is not consistent with the ideals of a free and fair market. 

Even if California lawmakers successfully pass their journalism bill, it would do little to reverse the local news decline. There is no certainty that the funds will benefit local media rather than large news conglomerates. Suppose the fees were guaranteed to help the small players: a government subsidy of this nature is still economically unwise and gives politicians inordinate power to pick winners and losers.