Meta has threatened to pull news from Facebook and Instagram if California's Journalism Preservation Act passes through.
Once the bill is cleared, big tech companies will need to pay a "journalism usage fee" whenever they distribute local news content on their respective platforms.
"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," Meta said in a statement.
According to Mark Zuckerberg-run company, the bill fails to recognise that publishers and broadcasters put their content "on our platform themselves and that substantial consolidation in California's local news industry came over 15 years ago, well before Facebook was widely used".
Meta further said that it is disappointing that California lawmakers appear to be prioritising the best interests of national and international media companies over their own constituents.
The California Journalism Preservation Act would tax the advertising profits platforms make from distributing news articles.
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The bill's sponsor, Assemblywoman Buffy Wicks, had said the measure could provide a "lifeline" to local news organisations that have seen advertising revenue nosedive.
"As news consumption has moved online, community news outlets have been downsized and closing at an alarming rate," Wicks said at a hearing on the bill earlier this month.
Meanwhile, Danielle Coffey, executive vice president of the News Media Alliance trade group, slammed Meta for threatening to block news in the state, reports NPR.
"Meta's threat to take down news is undemocratic and unbecoming. We have seen this in their playbook before," Coffey said in a statement.
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