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Social media giant Meta Platforms Inc. (NASDAQ:META) has flexed its muscles once again and threatened to wield its power by blocking access to news articles on its social media networks in California.
What Happened: In response to a proposed state legislative bill, the California Journalism Preservation Act, which aims to compel tech companies to compensate publishers for their content, Meta has issued an ultimatum.
Should the bill pass, Meta stated that it would be “forced” to remove news from Facebook and Instagram in the state rather than comply with the mandated journalism usage fee for news outlets.
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The Mark Zuckerberg-led company further stated that the proposed bill disguises its true intention of aiding California publishers while primarily benefiting “out-of-state media companies.”
For the unversed, media advocates have argued that the proposed bill would require social media platforms to share a portion of their earnings with publishers, recognizing that value derived from the content produced by news outlets, reported The Washington Post.
The opposite argument contends that these proposals fail to acknowledge social media’s role in distributing news content. Meta previously stated that these proposals overlook the significant consolidation in California’s local news industry that occurred before the widespread use of Facebook.
Why It’s Important: Meta made identical threats previously in Australia and Canada while battling similar fights. Australia eventually passed the legislation, resulting in millions of dollars being redirected to news outlets from Meta and Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL).
The Canadian proposal remains under consideration.
Since the implementation of the Australian law, Meta and Google have reportedly engaged in approximately 30 agreements with media outlets. Nevertheless, Facebook’s temporary shutdown of news feeds in Australia following the law’s enactment created a state of upheaval in the country.
It is pertinent to note that previously a report suggested that five in 10 U.S. adults use social media to get news despite studies calling these platforms a hotbed of misinformation.
Check out more of Benzinga’s Consumer Tech coverage by following this link.
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