Meta threatens end of news service in Illinois as lawmakers consider journalism bill

Meta is threatening to terminate news availability on Facebook and Instagram in Illinois as state lawmakers contemplate legislation forcing online platforms to pay publishers for using their content.

Senate Bill 3591, known as the Journalism Preservation Act, would require platforms such as Meta and Google to share advertising revenue with eligible online news outlets. Jamie Radice, a Meta spokesperson, told The State Journal-Register passage of the bill would force their hand.

“If faced with legislation that requires us to pay for news content that publishers voluntarily post on our platforms and is not the reason most people come to Facebook and Instagram, we will be forced to make the same business decision that we made in Canada to end the availability of news in Illinois," Radice said in a statement.

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Negotiations are admittedly early, bill sponsor and state Sen. Steve Stadelman, D-Rockford, said during a Senate Executive Committee subject matter hearing last week. Given a challenging climate for newsrooms nationwide and locally, he urged lawmakers to get behind his legislation.

"The bottom line is here: if you have content, you should be compensated for the content online," he said.

The bill follows up with a similar pending legislation in California that Meta also warned would lead to it pulling news content in the state. Meta also ended news availability in Canada and has made plans to stop paying Australian news publishers for its content appearing on Facebook, Reuters reports.

Dwindling newsrooms throughout the state

It has not been barnstorming start to 2024 for many newsrooms across the country, several legacy and startup outlets announcing major staffing cuts. A similar trend has played out in Illinois in recent years.

A report from the Illinois Local Journalism Task Force, headed by former Rockford TV anchor Stadelman, found journalism jobs have dropped 86% in Illinois since 2005, and has lead to the formation of news deserts — areas lacking a daily or non-daily newspaper — in five downstate counties.

The bill looks to reverse this trend by ear-marking 70% of the funds publishers would receive to support their staff. For newsrooms with less than five employees, that share would be 50%.

Danielle Coffey, executive vice president of the News Media Alliance trade group, said a loss of advertising revenues — money going to the platforms instead of news outlets — has contributed to shrinking newsrooms. The alliance also backed the legislation in California.

"Due to the strain on our industry, if this trajectory continues, there will be no reporters covering town halls, city halls, football games, high school wrestling, junior prom or anything relevant to communities in Illinois," she said during committee. "There are no other entities that cover the personal aspects of our daily lives like news reporters on the ground, committed to covering and investigating current events."

Opponents say it only helps hedge funds, encourages click-bait

Acting as a "link tax," a characterization receiving pushback from Stadelman, several tech advocacy and First Amendment rights groups were concerned that more platforms like Meta would remove news availability rather than share advertising revenues.

In its current form, the bill requires a qualifying publication to generate at least $100,000 in revenues from editorial content per year. This, opponents said, creates an uneven playing field for startup news outlets and instead helps hedge funds such as Alden Globe Capital and newspaper chains like Gannett.

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The funding formula was also brought into question. Through the legislation, publishers would receive their usage fee from platforms within 10 days after the end of each month. That fee would be calculated in-part based on the number of times an article is linked per month on the platform.

It would set aside 1% of the fee to news outlets producing at least 30,000 annual search occurrences in Illinois searches or 10,000 annual social media impressions from Illinois. This was particularly troubling to City University of New York journalism professor Jeff Jarvis.

"By compensating platforms for links to publishers, this legislation creates a perverse incentive to create yet more clickbait," said Jarvis, a former reporter at The Chicago Tribune. "Which is the last thing that the internet needs."

Meta and Illinois: A tenuous relationship

Conversations surrounding the legislation are the latest in saga of interactions between Meta and Illinois.

Ongoing is a lawsuit led in-part by Illinois Attorney General Kwame Raoul against Meta that alleges the company has engaged in harmful business practices targeting children. The suit claims Meta has used addictive features to keep children on their sites, leading to higher rates of depression and suicide. All told, more than 500,000 Illinois teenagers between the ages of 13 and 17 access Instagram every day according to the AG office.

At the same time, Meta also opened a $1 billion data center in DeKalb last fall with plans to open wind energy operations in DeWitt and Morgan counties. The state sweetened the pot through its Data Center Investment Program, which allows exemptions for several state and local states as long as the business invests at least $250 million and create 20 full-time jobs. The data centers are also required to be carbon-neutral.

Editor's note: Gannett owns and operates several publications in Illinois, including the State Journal-Register, Peoria Journal Star, Rockford Register Star, Freeport Journal-Standard, Galesburg Register-Mail, Pekin Daily Times, Pontiac Daily Leader, Canton Daily Ledger, Kewanee Star-Courier, McDonough County Voice, Aledo Times Record, Geneseo Republic and Monmouth Review Atlas.

Contact Patrick M. Keck: 312-549-9340, pkeck@gannett.com, twitter.com/@pkeckreporter

This article originally appeared on State Journal-Register: Illinois bill would require Meta, Google to share ad revenue