Assemblywoman Buffy Wicks, D-Oakland, smiles after measures that would force Big Tech companies to pay media outlets for using their news content was approved by the Assembly at the Capitol in Sacramento, Calif., June 1, 2023.
Google is set to provide California with millions of dollars to support local journalism jobs in a pioneering agreement. However, some journalists and media experts are calling it a letdown, arguing that it primarily benefits Google.
This week’s deal, negotiated in private and unveiled recently, will allocate tens of millions of dollars from both public and private sources to sustain local news outlets. Critics claim this move is a strategic play by tech giants to avoid a potentially groundbreaking law. In exchange for Google’s financial commitment, California lawmakers agreed to drop a bill that would have required tech companies to financially support news organizations benefiting from their platforms.
Victor Pickard, a media policy professor at the University of Pennsylvania, argues that California missed an opportunity for more substantial funding and regulatory action. “Google got off easy,” he said, noting that the deal allowed the tech giant to sidestep a law that could have mandated ongoing payments for news content links.
Google, however, contends that the agreement will benefit both journalism and the artificial intelligence sector in California. Kent Walker, Alphabet’s president of global affairs, highlighted the partnership’s dual focus on supporting journalism and fostering AI policy development.
State governments across the U.S. are grappling with the decline of traditional news models and dwindling advertising revenues. As news organizations transition to digital formats, they increasingly rely on platforms like Google and Facebook for content distribution. Despite a sharp drop in advertising revenue for publishers, Google’s digital ad empire generates over $200 billion annually.
Recent years have seen significant layoffs and closures in the newspaper industry. For example, the Los Angeles Times reported losses of up to $40 million annually and had to lay off over 100 employees earlier this year. Since 2005, more than 2,500 newspapers have shut down, and about 200 U.S. counties lack local news outlets.
California and New Mexico are funding local journalism fellowship programs, while New York has introduced a tax credit for hiring journalists. Illinois is considering a similar bill.
Under the new deal with Google, which totals $250 million, $110 million will come from Google and $70 million from the state budget to support journalism jobs. The fund will be managed by UC Berkeley’s Graduate School of Journalism. Additionally, $70 million from Google will support an AI research program aimed at addressing real-world issues. This agreement will last for five years.
The deal diverges from a bill that would have imposed a "link tax" on tech companies, requiring them to pay media outlets for linking to their content. Modeled after a Canadian policy, this bill would have generated more significant funds for journalism.
Tech companies fought against the bill for two years, using costly campaigns and threatening to limit access to news sites in California. Assemblymember Buffy Wicks, who spearheaded the bill, acknowledged the deal as a compromise, stating that the funding obtained is preferable to no funding at all.
Critics argue that Google is using tactics to avoid fair compensation for news publishers. Anya Schiffrin, a Columbia University professor, estimates Google owes $1.4 billion annually to California publishers.
The Media Guild of the West, representing journalists in Southern California, Arizona, and Texas, expressed frustration over being excluded from the negotiation process. They worry the deal does not address the power imbalance between tech giants and local news outlets.
Some journalism groups, including the California News Publishers Association, support the deal, as it includes both journalism funding and AI research.
The agreement is set to take effect next year, starting with $100 million for initial efforts. Details are still being finalized, with concerns from Democratic leaders potentially affecting the plan.
