A bill aimed at requiring Google and Facebook’s parent company Meta to compensate publishers for news content shared on their platforms has passed a critical legislative hearing in a state chamber where many bills typically fail.

Assembly Bill 886 proposes that these tech giants pay negotiated annual lump-sum fees into a fund for news organizations or engage in mediation or arbitration to determine a fair share of their digital ad revenue for media companies.

The bill cleared the challenging suspense file hearing before the state Senate’s Appropriations Committee with a 4-2 vote, though Republican senators opposed it. Bills in the suspense file often face an uncertain fate and many do not progress further.

As AB 886 advances towards the August 31 deadline for the legislature’s session, ongoing negotiations between news publishers, tech industry representatives, and legislators are expected. If the bill passes, it will require Governor Gavin Newsom’s signature or veto by September 30. Newsom’s spokesperson stated this week that he will review the bill’s merits if it reaches his desk.

The bill, co-authored by Assemblymembers Bill Essayli and Josh Lowenthal, passed the state Assembly in June 2023. Critics of Google and Meta argue that the platforms’ dominance has contributed to the closure of thousands of newspapers in the U.S. since 2005, as publishers have had to offer their content on these platforms with minimal compensation.

Google and Meta control a substantial portion of global digital advertising revenue—28% and 23%, respectively, according to eMarketer. A study by Columbia University and the University of Houston found that Google’s revenue from news media search results is about $21 billion annually, while Meta earns nearly $4 billion annually from news on U.S. Facebook feeds.

The California News Publishers Association, which this news organization is a part of, highlighted a recent federal court ruling that deemed Google’s dominance in internet search illegal. They argue that the control exerted by Google and Meta contributes to the decline of the news industry, leading to more misinformation and fewer independent local watchdogs.

Meta contends that most Facebook users do not come to the platform for news and that the presence of news content on Facebook and Instagram does not significantly benefit its users or business. During a June legislative hearing, Google’s vice president of global news partnerships, Jaffer Zaidi, argued that AB 886 is based on a mistaken assumption that internet platforms profit from news without compensating publishers, claiming that Google Search provides substantial free traffic to news sites.