After more than two years of lobbying for the California Journalism Preservation Act (Assembly Bill 886) to require tech platforms to pay for news, a devastating deal between the California legislature and Google has sent those efforts down the drain.
On Aug. 21, California lawmakers announced a 5-year public-private partnership with Google to provide $250 million to professional newsrooms in the state. The agreement, known as the News Transformation Fund and National AI Innovation Accelerator, promises to fund two programs that will support both local journalism research and “AI in support of local journalism across California,” as described by Jason Kwon, the chief strategy officer for OpenAI.
While this agreement appears positive at first, with its promised millions of funding for newsrooms, its impact on news organizations is more likely to be detrimental.
As a result of this agreement, lawmakers have shelved Assembly Bill (AB) 886 — which would have required search engine platforms to give much-needed compensation to digital journalism providers. This act would have allowed publishers to obtain a portion of the ad revenue from their linked article.
Meanwhile, the new California-Google agreement promises to dole out $250 million over the next five years, a fourth of which comes from state taxpayers and the remainder from Google. It also taps UC Berkeley’s Graduate School of Journalism to oversee the News Transformation Fund. Approximately $180 million over the next five years would be reserved for local publications: $70 million from the state — which has yet to be appropriated — and the remaining $110 million from Google.
More specifically, California taxpayers would fund $30 million in the first year and $10 million for each following year; Google, on the other hand, would fund $15 million the first year and at least $10 million for the remaining four. Google would also put $62.5 million over the next five years into the National AI Innovation Accelerator program.
To put it in perspective, researchers from Columbia estimate that Google makes roughly $21 billion in revenue from news-related searches; in fact, the study projects that Google should pay upwards of $10 billion to U.S. publishers annually — and only if that revenue were to be split 50-50. All the while, Google has made free use of news content for years at the expense of newsrooms that have struggled to profit in the digital age. Little to no compensation has been given.
With only promised funding for the vaguely worded AI Accelerator project and no new law in sight, the deal gives little reparation to an already-jeopardized newsroom environment and exacerbates monopolistic, Big Tech control over journalism.
Since 2008, the number of newspaper journalists has fallen by more than 50%. These very newspapers are the watchdogs for democracy, set to inform citizens and hold the government accountable.
However, as a result of the digital age, traditional newspaper readership has fallen sharply. In an era where more than 65% of the population gets their news through search engines, newspaper organizations including the Falcon have shifted toward digitalization.
By doing so, newsrooms have handed control over to companies like Facebook (Meta) and Google, which serve as key news aggregators. In return for user data collection, Google redirects searchers to news outlet websites. This has led publishers to develop a dependence on search engines to generate traffic.
The fundamental problem with this system is the imbalance in bargaining. While Google does not need any specific news outlet to generate ad revenue to profit immensely from web traffic, each newsroom depends heavily on Google to survive.
Even so, news publishers face the threat of punishment by big tech companies, simply because the playing field between news organizations and multi-billionaire companies is not level. For instance, for six days in 2021, Meta briefly banned news content in Australia; Australians were not able to access or share content from any news accounts on Facebook.
More recently, Google announced in a statement that it would limit search results from California news websites “until there’s more clarity on California’s regulatory ecosystem.”
AB 886 would have provided a solution to this problem by allowing publishers to negotiate collectively with big tech companies; similar legislation such as the News Media Bargaining Code has proven effective for Australian newsrooms, which saw hundreds of jobs created in the journalism industry.
Back in 2021, Australian news outlets negotiated with Google and Meta to force both companies to pay for news articles they share on their sites. Against Google’s threats to pull out of the country and Facebook’s threat to block Australian news outlets from posting content on Facebook, Australian lawmakers persevered. Eventually, Australian newsrooms were able to land a deal that requires legal compensation from tech companies for newsrooms — over $100 million per year. The best part? Australia was able to pass firm legislation that establishes a mandatory code of conduct for negotiations between Australian news publications and key news aggregators.
While AB 886 would have provided support for the journalism industry, the agreement with Google simply ignores the root problem in bargaining imbalance or the means of industry revenue. It is at best a short-term half-solution, thanks to its limited 5-year term.
To rub salt to the wound, the agreement also hopes to “launch a National AI Accelerator” program that could very well help to destroy the journalism industry. Currently, generative AI like ChatGPT already derives all information about current affairs from news outlets — without paying a price.
However, without an actual journalist doing the work, AI is not able to provide an accurate portrayal of reality: It is not able to interview soldiers on the frontlines of wars, and its fact-checking prowess is questionable at the very least.
So here’s a rundown: Google is providing funding for independent California newsrooms — for a finite term — and it is using a portion of the same total funding to kickstart the AI Accelerator project. Google and California lawmakers may very well be digging a grave for newsrooms.
Journalism associations have rolled in with strong opposition to Google’s proposed settlement. Assemblywoman Billy Wicks, who authored AB 886 before backtracking into the $250 million deal, has been criticized for the secretive decision making process. The deal has been described as an “undemocratic” deal that was reached “behind closed doors” by the Media Guild of the West, a journalism union. The guild asserts that Google must pay its fair share to support newsrooms.
Wicks defended her decision to not include news unions in the talks, stating that a “nearly quarter-billion-dollar framework was better than zero.” Wicks does acknowledge that the agreed-upon figure currently stands much lower than what AB 886 would have given.
Other associations, such as the National Association of Hispanic Journalists, Asian American Journalists Association, Writers Guild of American West and California Federation of Labor Unions have firmly denounced the agreement as well.
By not protecting publishers and allowing big companies to take advantage of the journalism industry, the new agreement is clearly an affront to democracy and the free market itself. Alternatives such as AB 886 would make a much greater impact than this hasty, short-term agreement. Lawmakers must take stronger stances against Google, because, as a for-profit corporation, Google’s self-interest deters solutions that would benefit public purposes — and we lose the most essential watchdogs of our nation.