In a significant legislative move, the California State Senate passed Senate Bill 1327 on Thursday, a measure designed to levy a new tax on tech giants such as Amazon, Meta, and Google. The tax targets the data these companies collect from users, establishing a “data extraction mitigation fee.” Revenue generated from this fee is intended to bolster the news industry by offering tax credits to news organizations that employ full-time journalists.
Sen. Steve Glazer (D-Orinda), the bill’s proponent, highlighted its intent, stating, “Just as we have funded a movie industry tax credit, with no state involvement in content, the same goes for this journalism tax credit.” He emphasized the bill as a crucial step in safeguarding democracy and supporting a free press.
This legislative effort aligns with another bill, Assembly Bill 886, which was also advanced this week. AB 886 mandates that digital platforms pay a fee to news outlets when their news content is used to sell advertising. Together, these bills aim to revive the struggling local news sector, which has seen a decline in revenue as digital media reshapes news consumption.
The passage of SB 1327 was marked by a 27 to 7 vote, receiving cross-party support, including a vote from Republican Sen. Scott Wilk (R-Santa Clarita). As a tax increase, the bill required a two-thirds majority in the Senate and will now proceed to the Assembly for further consideration.
However, the bill faces opposition from various quarters including tech company trade associations like Technet, Internet Coalition, and Chamber of Progress, along with the California Chamber of Commerce and numerous local chambers of commerce. Critics, such as Sen. Roger Niello (R-Fair Oaks), argue that the legislation fails to recognize the evolving nature of news consumption, which now includes modern formats like podcasts and nonprofit news platforms. Niello noted, “These are all new models, and very few people under the age of 50 … even pick up a paper newspaper,” underscoring the market’s evolution.
Despite these criticisms, the bill enjoys support from several stakeholders in the journalism sector, including unions representing journalists, a coalition of online and nonprofit news outlets, and publishers of various small newspapers, all advocating for a sustainable model of journalism in the digital age.
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Having done news sites for years (and up to this day) I like the IDEA of this…while it also conflicts me because of the ongoing power grab of the government. Is there a happy medium? I honestly do not know… – Kenneth
