Faced with possibly paying for news, Google removes links to California news sites for some users

SACRAMENTO, California — Google on Friday began removing California news websites from some people’s search results, a test that would act as a threat if the state Legislature were to 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 would also halt new investments in California’s news industry, including its partnership initiative with news organizations and its product licensing program.

“By helping people find news stories, we help publishers of all sizes grow their audiences at no cost. (This bill) would end that model,” Jaffer Zaidi, Google’s vice president of 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 media companies a certain percentage of advertising revenue for linking to their content. How much the companies would have to pay would be determined by a panel of three judges through an arbitration procedure.

The bill aims to halt the loss of journalism jobs, which have rapidly disappeared as traditional media companies struggle to make profits in the digital age. More than 2,500 newspapers have closed in the U.S. since 2005, according to Northwestern University’s Medill School of Journalism. California has lost more than 100 news organizations in the past decade, according to Democratic Assemblymember Buffy Wicks, the bill’s author.

“This is a bill about fundamental fairness – it’s about making sure platforms pay for the content they reuse,” Wicks said. “We are committed to continuing negotiations with Google and all other stakeholders to secure a better future for California journalists and keep the lights of democracy on.”

The state Assembly passed the bill last year with bipartisan support, despite fierce opposition and lobbying efforts from major tech companies. The California Senate would have to approve it later this year before it becomes law.

Supporters said the legislation would help level the playing field between news publishers and major digital platforms and provide a “lifeline” to local news organizations, which rely heavily on Google’s search engine to distribute their content in the digital age. While Google’s search engine has become the centerpiece of a digital advertising empire that generates more than $200 billion annually, news publishers have seen their advertising revenues plummet significantly in recent decades.

But opponents, including Google, Meta and some independent newsrooms, are calling the legislation a “link tax” that would mainly benefit out-of-state newspaper chains and hedge funds and further decimate local news organizations. Richard Gingras, Google’s vice president of news, also told state lawmakers at a hearing last December that Google has already made significant contributions to support local journalism, pointing to the tech giant’s financial grants and training for nearly 1,000, among other things local publications in 2023. programs.

Google’s search engine should be considered “the world’s largest kiosk,” Gingras said, helping users connect to news websites more than 24 billion times a month. Google’s search engine has an estimated 90% of the market.

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

Google’s decision to temporarily remove links to news websites is not a new tactic for tech giants to use in 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 last year to lawmakers in Congress and California. Google had threatened to do the same in Canada. But in November, Google agreed to pay 100 million Canadian dollars ($74 million) to the news industry.

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

“Google would do tremendous damage to itself if it decided to stop using newspaper content,” Brandon Kressin, an antitrust attorney representing News Media Alliance and other news publishers, told lawmakers at a hearing in December. “They would cut off their noses to spite their own faces.”

The political wrangling over Google’s dominant search engine could hamper access to various news sources, amid legal challenges that could result in decisions that undermine the company’s internet empire.

After presenting evidence supporting claims that Google abused its power to stifle competition and innovation during the largest antitrust trial in a quarter century, attorneys for the U.S. Department of Justice will present their closing arguments to a federal judge next month which is expected to make a decision in the case later this year.

After another antitrust trial that ended in December, a federal jury concluded that Google had turned its app store for smartphones running its Android software into an illegal monopoly that limited consumer choice while enriching the company through unfairly high commissions charged for in-app purchases. A hearing will also take place next month on the changes Google will have to make as a result of that ruling.

California has sought to boost local journalism through several initiatives, including a multi-year, $25 million state-funded program in partnership with the UC Berkeley Graduate School of Journalism to place 40 aspiring journalists a year in local newsrooms. Lawmakers are also considering another proposal that would expand tax breaks for local news organizations this year.

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Associated Press reporter Michael Liedtke in San Francisco contributed to the report.