Meta, the parent company of Facebook and Instagram, has warned that it will eliminate news links from its platforms in California if state legislators proceed with a bill that seeks to impose a tax on news content, according to a report by Axios.

Meta previously took action in response to a similar situation in Australia, as the company temporarily pulled news from Facebook in 2021 due to an Australian law mandating payment for news content. However, Meta restored access after the government agreed to modify certain aspects of the legislation.

The Australian experience demonstrated the severe impact of such actions, with news traffic in the country experiencing a significant decline during the short-term ban. To preempt regulatory challenges, Meta has gradually shifted its algorithms and products away from news in recent years. Consequently, news publishers in the United States have observed a substantial reduction in traffic, making efforts to draw payment for news content less compelling.

Under the proposed California Journalism Preservation Act, Meta and its competitor Google would be required to pay a tax to the state based on advertising revenues generated from news content. The funds collected would be allocated to local newsrooms in California.

Meta responded to the bill stating, "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."

California lawmakers argue that technology platforms should bear the responsibility of assisting local news outlets, which have suffered significant financial losses in the internet age. The bill emphasizes the crucial role played by journalism in providing essential information to Californians and supports the idea that publishers should receive fair compensation for their content.

On the other hand, Meta says that the bill fails to acknowledge that publishers and broadcasters willingly share their content on its platform. Additionally, the company argues that the consolidation within California's news industry occurred prior to the widespread use of Facebook, as stated in a Twitter post by a Meta spokesperson.

Big tech vs governments

Meta and Google have been at odds with world governments who seek to mandate payment to publishers for content displayed on their platforms.

France became the first European Union member state to enact a copyright law in 2019, requiring Meta and Google to compensate publishers unless they reach independent distribution agreements.

The success of this measure, along with the Australian law enacted in 2021, has spurred other countries like Canada and New Zealand to consider similar legislation, though these bills have not yet come into law.

In the United States, a bipartisan group in Congress reintroduced an antitrust bill focused on journalism in March, mirroring the ongoing debate in California. Despite being presented for the fourth time in four years, the bill has repeatedly failed at the national level, partly due to lawmakers' inability to reach a consensus on the criteria for determining eligible publishers deserving of payment.