'Social media fee' could be introduced in one US state generating $200M per year
One US state is seriously considering enforcing a 'social media fee' that one politician has said could raise as much as $200M for the state every single year.
A lot's been happening in the world of social media lately. Meta rolled out a subscription tier system last year, allowing users to pay for ad-free scrolling on Facebook and Instagram. Meanwhile, Mark Zuckerberg is set to face a jury to determine whether social media platforms are really addictive.
Now, one US state is planning to introduce a fee for social media companies.
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Illinois has proposed charging social media companies up to 50 cents a month for each active user they collect data from.
The 'Digital Platform Fee' would reportedly generate around $200 million per year for the state, according to Governor J.B. Pritzker’s office (via The Independent).
It's hoped that the move will offset the costs the state incurs due to social media's negative effects on Illinois residents and will be included in the state's fiscal year 2027 budget.
“As big tech companies continue to profit off of surveilling youth, creating addictive algorithms, and abandoning their responsibility to keep kids and consumers safe, the American public is paying the price,” the governor’s office stated in a fact sheet.
“From negative psychological impacts on youth to consumer scams on the elderly, state governments are bearing the societal costs of irresponsible tech.”
According to The Independent, companies such as Instagram and Facebook would face tiered monthly fees based on their user base size.
To break it down, the platform would be charged 10 cents for every user above 100,000.
If the platform has over 500,000 Illinois users, the platform would be charged 25 cents for every user, plus a monthly $40,000 fee. And platforms with one million or more Illinois users would be charged 50 cents per user plus a monthly $165,000 fee.
Fortunately, this fee will not be passed on to users, as the proposal's provision prevents companies from doing so.
Chicago’s ABC 7 reported that the fees follow the state's approximately $2 billion budget shortfall for the 2027 financial year. This would make Illinois the first state to tax social media platforms this way, although cities like Chicago have already introduced similar measures.
On 1 January, Chicago became the first major city to establish a social media tax that collects consumer data for 50 cents monthly per user, the Chicago Department of Finance noted.
Meanwhile, several other states have attempted similar measures, including California, Hawaii, Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, New York, Pennsylvania, Rhode Island, and Tennessee.