California’s political sphere is advancing a bill that will force Google and Meta companies (which owns Facebook and Instagram) to pay news publishers each time search results are displayed or when article snippets are shown on social media.
The legislation stipulates that news organizations can apply to receive a portion of the revenue generated from advertisements displayed alongside news content or website links by the two tech giants. The tech companies are required to make quarterly payments and are prohibited from penalizing news organizations that apply for payment through algorithmic ranking. News organizations receiving payment must submit annual reports to prove that the money is being spent on journalistic endeavors.
Google is vigorously lobbying to block the “link tax” legislation, arguing that it will disrupt the free flow of online information. Jaffer Zaidi, Google’s Vice President of Global News Partnerships, stated in a recent blog post that the proposal will benefit hedge funds that have acquired local news outlets, leading to a decline in news quality.
Despite not disclosing how many Californians have been blocked from accessing news, Google has initiated resistance measures, describing the action as a “short-term test” in a recent blog post announcing the blockade.
The bill’s sponsor, Democratic State Senator Mike McGuire, views Google’s actions as a dangerous threat. Brittney Barsotti, the General Counsel of the California News Publishers Association, remarked that Google’s actions highlight the necessity for such legislation, emphasizing concerns over a single company potentially cutting off Californians’ free flow of information.
Anya Schiffrin, Director of the Technology, Media, and Communications Program at Columbia University’s School of International and Public Affairs, stated that California news publishers have not yet felt significant impacts. Some Californians have reported being unable to access local newspaper websites.
Over the years, as news organizations have faced declining advertising revenue, layoffs, and newspaper bankruptcies, they have increasingly turned to government regulations to compel tech platforms to share a portion of online revenue. More than 350 news publishers, including the Los Angeles Times and the San Francisco Chronicle, signed a letter supporting the bill on April 18, as reported by The Washington Post.
The News Media Alliance, representing 2,200 news organizations nationwide, has accused Google of possible antitrust violations and has called on the Justice Department and Federal Trade Commission to investigate Google’s actions. Supporters believe that requiring tech companies to share ad revenue is a fair way to sustain the news industry, while tech companies argue that it contradicts the spirit of an open and free internet, potentially subjecting them to endless legal repercussions.
For the past two decades, Google and Facebook have steadily strengthened their control over the advertising industry. In the fourth quarter of 2023 alone, Google’s ad revenue reached $65.5 billion, while Facebook’s stood at $40.1 billion. Meanwhile, news organizations that once thrived on advertising and classified ads have shrunk, with thousands of local newspapers in the United States closing and tens of thousands of journalists losing their jobs.
Not all publishers in California support the bill, with Jo Ellen Green Kaiser, CEO of the Northern California Jewish News, warning in a recent editorial that continued news content blockades by Google could disrupt their online discoverability.
Various commercial entities, including the California Chamber of Commerce, small news publishers like the Alameda Post and San Diego Tribune, alongside trade organizations representing Google, Meta, and other tech companies, oppose the legislation. Chris Jennewein, Editor and Publisher of the San Diego Tribune, stated, “Tech companies are not stealing news, they are attracting readers,” emphasizing the ecosystem they have created to facilitate easier access to news for everyone.
Adam Gillitt, Publisher of the Alameda Post, suggested taxing large tech companies and investing funds into a public fund for publications based on community needs and values, rather than the frequency of news appearances alongside advertisements.
Internet freedom advocates have expressed concerns about governmental mandates. Organizations like the American Civil Liberties Union and the Electronic Frontier Foundation oppose a federal bill called the “Journalism Competition and Preservation Act,” which allows news organizations to collectively negotiate with large tech platforms for payment. A group of open internet advocates warned legislators in 2022 that allowing news organizations to sue tech platforms to limit their reach (a provision included in the California bill) constitutes a “direct attack” on tech companies’ rights to moderate online content, leading to a host of new issues.
As the news industry adapts to the internet, Facebook, Google, and other online platforms have become key intermediaries in connecting news with readers. While Facebook has historically driven traffic to news publishers, Meta’s recent shift away from news operations has left many companies struggling and led to waves of layoffs. Consequently, Google remains a primary source for people to stay informed and search for news.
In 2021, Australia passed laws requiring Meta and Google to negotiate payment terms with news publishers. Both companies vehemently opposed the move, with Meta temporarily shutting down all news links on its platform, and Google threatening to withdraw its search engine from Australia. However, a compromise was eventually reached between the Australian government and both companies. News outlets in Australia noted that these agreements allowed them to hire more journalists, particularly in underserved rural areas.
Canada underwent a similar legislative process, with a controversial bill introduced by Prime Minister Justin Trudeau’s government sparking a national debate in the summer of 2023 when some struggled to find crucial wildfire news due to Facebook’s blockages. Google reached a compromise with the Canadian government, agreeing to establish a $73.5 million (100 million Canadian dollars) news fund annually to support Canadian news providers.
Meta has stood firm in Canada, where news links on Facebook and Instagram remain entirely blocked. Dwayne Winseck, a communications professor at Carleton University in Ottawa, noted that this has led to a significant decrease in traffic for Canadian news organizations. He believes it is too early to determine the relative decrease in revenue for news organizations. Experts suggest that while Meta’s retaliation may be manageable due to existing algorithmic reductions in recommended news quantity, the impact would be more substantial if Google were to block news in California.
“Haggart, an associate professor of political science at Brock University in Ontario,” states that Google positions itself as an interface between humanity and global knowledge. He argues that preventing access to news through Google is almost akin to “an act of war against a country,” emphasizing the importance of free access to information for a functioning society. ◇