Faced with paying for news, Google omits California sites for some

Sacramento: Google has begun removing California news websites from some search results, a test that acts as a threat should the state legislature pass a law requiring the search giant to pay media companies for linking to their content.

Google announced the move in a blog post on Friday, calling it a “short-term test for a small percentage of users ... to measure the impact of the legislation on our product experience”. The company said it also would pause new investments in the California news industry, including the partnership initiative with news organisations and its product licensing program.

An employee arrives at the Google Bay View campus in Mountain View, California.Credit: Bloomberg

“By helping people find news stories, we help publishers of all sizes grow their audiences at no cost to them. (This bill) would up-end that model,” Jaffer Zaidi, Google’s vice president for global news partnerships, wrote in the blog post.

The California legislature is considering a bill that would require tech giants like Google, Facebook and Microsoft to pay a certain percentage of advertising revenue to media companies for linking to their content. How much the companies would have to pay would be decided by a panel of three judges through an arbitration process.

The bill aims to stop the loss of journalism jobs, which have been disappearing rapidly as legacy media companies have struggled to profit in the digital age. More than 2500 newspapers have closed in the US since 2005, according to Northwestern University’s Medill School of Journalism. California has lost more than 100 news organisations in the past decade, according to Democratic Assemblymember Buffy Wicks, the bill’s author.

“This is a bill about basic fairness — it’s about ensuring that platforms pay for the content they repurpose,” Wicks said. “We are committed to continuing negotiations with Google and all other stakeholders to secure a brighter future for California journalists and ensure that the lights of democracy stay on.”

The state assembly passed the bill last year with bipartisan support despite fierce opposition and lobbying efforts from big tech companies. The California Senate would have to pass it later this year for it to become law.

Supporters said the legislation would help level the playing field between news publishers and large digital platforms and provide a “lifeline” to local news organisations, which rely heavily on Google’s search engine to distribute its content in the digital era. While Google’s search engine has become the hub of a digital advertisement empire that generates more than $US200 billion ($308 billion) annually, news publishers saw their advertising revenues nosedive significantly in the last few decades.

But opponents, including Google, Meta and some independent newsrooms, call the legislation a “link tax” that would primarily benefit out-of-state newspaper chains and hedge funds and further decimate local news organisations. Richard Gingras, Google’s vice president of news, also told state legislators, in a hearing last December, that Google already made significant contributions to support local journalism, pointing to the tech giant’s financial grants and training to nearly 1000 local publications in 2023, among other programs.

Google’s search engine should be seen as “the largest newsstand on Earth,” Gingras said, where it helps connect users to news websites more than 24 billion times per month. Google’s search engine holds an estimated 90 per cent share of the market.

“This traffic in turn helps publishers make money by showing ads or attracting new subscribers,” he said, adding that it’s estimated that each click on a link from Google is worth 5¢ to 7¢ to a news website.

Google’s decision to temporarily remove links to news websites is not a new tactic for tech giants to use when pushing back on unwanted legislation. When Canada and Australia passed similar laws to promote journalism, Meta — the company that owns Facebook and Instagram — responded by blocking content from Canadian publishers on its sites in Canada. The company made similar threats to US Congress and California lawmakers last year. Google had threatened to do the same in Canada. But in November, Google agreed to pay 100 million Canadian dollars ($114 million) to the news industry.

News publishers would suffer and could lay off more journalists if Google completely blocks content from its search, but experts say Google also would take a financial hit without news content.

“Google would be damaging itself enormously if it decided to stop using newspaper content,” Brandon Kressin, an antitrust lawyer representing News Media Alliance and other news publishers, told the December hearing. “They would be cutting off their nose to spite their own face.”

The political wrangling over Google’s dominant search engine can throttle access to various news sources comes against the backdrop of legal trouble that could culminate in decisions that undercut the company’s internet empire.

After presenting evidence to support its allegations that Google has been abusing its power to stifle competition and innovation during the biggest antitrust trial in a quarter-century, lawyers for the US Justice Department will present its closing arguments next month to a federal judge who is expected to issue a decision later this year.

Following another antitrust trial that ended in December, a federal jury concluded Google had turned its app store for smartphones running on its Android software into an illegal monopoly that limited consumer choices while enriching the company through unfairly high commissions charged for in-app purchases. A hearing on the changes that Google will have to make resulting from that verdict is also scheduled to occur next month.

California has attempted to boost local journalism through various initiatives, including a $US25 million multiyear, state-funded program in partnership with UC Berkeley Graduate School of Journalism to place 40 early-career journalists in local newsrooms annually. Legislators are also considering another proposal that would expand tax credits for local news organisations this year.

AP