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california journalism preservation act
Google-California Deal Should Be a Wake-Up Call: Digital Monopolies Hurt Journalism
Google is the sole winner of this deal, and this should be an example of what not to do to redress power and financial imbalances between news media and large digital platforms.
Sep 05, 2024
A California-Google deal that would provide $250 million for local journalism and an “AI accelerator” program was announced by California Gov. Gavin Newsom as a “major breakthrough” to ensure the “survival” of newsrooms across the state. In exchange, the state has agreed to kill the California Journalism Protection Act, a bill that would have forced the tech giant to share revenues with news publishers and which was deemed to be more transparent than similar legislation in Australia and Canada.
News publishers and other advocates focusing on the good side of the deal (more money) have also been cautious about celebrating it. Journalists’ unions and associations have been more straightforward in decrying it. Altogether, newsrooms are feeling the toll of elongating their “survival” mode, especially if the trade-off is to continue handing their future to those who helped create their crisis.
By eliminating legislation enforcing revenue-share agreements, California has reduced Google’s financial liability compared with Australia and Canada, where news outlets, including broadcasters, are compensated for creating value for Google. In addition, Google got the state of California to pick up an important portion of the $250 million bill using public funding. More significantly, the deal allowed the corporation to avert disclosing how much value news generates for Google’s search engine, which estimates put at $21 billion a year in the U.S. based on searches using news media content.
Concentrated market power is hurting the chances for a free and financially independent press to thrive.
Let’s be clear: Google is the sole winner of this deal, and this should be an example of what not to do to redress power and financial imbalances between news media and large digital platforms. If anything, it should be a wake-up call to the harmful effects of digital monopolies on the news media industry. Governments can no longer spare Google and other tech giants from their role in the financial crisis of journalism.
The recent ruling from a federal district court confirming Google’s monopoly over search tells part of this story. Although that case didn’t address the corporation’s impact on newsrooms, we learned that Google’s grip on advertising demand couldn’t have been achieved without a key illegal practice: its multibillion-dollar contracts with phone makers that were designed to squash rival search engines. Today, search advertising continues to be the largest channel capturing ad spend in the U.S.
Most importantly, this stranglehold enabled Google to constrain media’s bargaining power and prevent any meaningful discussion about the dollar value news content provided to its search engine—as the looming threat of permanently turning off news access would have hurt the press even more. Without significant challengers to Google’s search engine, newsrooms are beholden to Google’s whims for news discoverability and distribution on search results.
A separate trial starting next week tackling Google’s monopoly over advertising technologies (ad-tech) is likely to complete the story of this corporation’s role in this crisis. The ad-tech industry, once thought to help news publishers make revenue from digital, has become extraordinarily complex, opaque, and concentrated. At the same time, it is the backbone that connects advertisers and publishers to buy and sell ads across the web—providing an alternative to search and social media ads, all of which drives a marketplace worth around $300 billion in the United States alone.
Besides controlling search ad revenues, Google also controls the ad-tech platforms upon which most ad sales by news publishers are made. Without getting too technical, in practice this means Google has eyes on the value of news publishers’ ad inventory, on advertisers’ preferences and perceptions about those publishers, and on the algorithms that connect the two to determine ad prices.
Also unchallenged, Google controls between 50% and 90% of transactions in each layer of this market, where it takes a cut of about 35% of each ad dollar spent. In the trial, the Department of Justice is expected to cut through the ad-tech complexity and show how Google has also manipulated ad prices to divert ad dollars away from news publishers into the tech giant’s own pockets. For the first time in many years, in this case the DOJ is seeking a breakup to redress Google’s harms.
As a counterargument, Google has been trying to push a story in which a “very competitive” market already exists, since multiple giants in various other sectors—Amazon, Walmart, CVS, etc.—are also competing for ad dollars. This view invites us to presume news publishers and journalists must be doing something wrong, so what else is there to do but to help them to “survive” in this brave, new world?
But nothing could be further from the truth. Newsrooms across the world have not stopped innovating, changing their revenue models, and adapting to audiences’ new habits. Journalists continue to defend their trade and the rights that ensure they can do their jobs safely. People still want to find reliable news. But when it comes to competition, how do we even call it that when a handful of players control not only where news is discovered and accessed, but also drive appetite to monetize audiences’ personal data, and ultimately assign value to a publisher’s ad inventory?
The fight for legislation in California that would redress these imbalances was the first step—not the ultimate fix—to coming out of the “survival” mentality that has been entrenched for far too long in journalism. Concentrated market power is hurting the chances for a free and financially independent press to thrive. As long as short-term fixes like the California-Google deal, obscure this reality, we will continue to allow the very same people we should be holding accountable to shape the future of democracy.
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California-Google Deal Called 'Disaster for Journalism and Good Government'
One critic said the agreement "was hammered out behind closed doors between media giants and tech platforms," and "fails to meet the needs of California's journalists and communities."
Aug 22, 2024
Anti-monopoly and media groups this week are sounding the alarm over a new agreement between California and Google that kills two state bills focused on funding journalism.
Both supporters and critics of the bills—state Sen. Steve Glazer's (D-7) S.B. 1327 and Assemblymember Buffy Wicks' (D-14) A.B. 886, also known as the California Journalism Preservation Act (CJPA)—have expressed concerns about the deal that Wicks announced and Democratic Gov. Gavin Newsom cheered as "a major breakthrough" on Wednesday.
Glazer's bill would have imposed a 7.25% tax on online advertising revenue to create a tax credit for California newsrooms while the CJPA would have made platforms pay part of their ad revenue to media outlets for using their content. Big Tech was fiercely against both proposals.
Negotiators settled on providing nearly $250 million in private and public funding over the next five years to launch a National AI Accelerator and a News Transformation Fund, to be administered by the University of California, Berkeley Graduate School of Journalism, according to Wicks, who claimed that "this is just the beginning."
As CalMattersreported:
Instead of Google and Meta being forced to negotiate usage fees with news outlets directly, Google would deposit $55 million over five years into a new fund administered by UC Berkeley to be distributed to local newsrooms—and the state would provide $70 million over five years. Google would also continue paying $10 million each year in existing grants to newsrooms.
The Legislature and the governor would still need to approve the state money each year; the source isn't specified yet. Google would also contribute $12.5 million each year toward an artificial intelligence "accelerator" program, raising labor advocates' anxieties about the threat of job losses.
The deal came after more than a year of debate over the bills, during which Google came under fire for testing that involved "removing links to California news websites, potentially covered by CJPA, to measure the impact of the legislation on our product experience," as Jaffer Zaidi, the tech giant's VP for global news partnerships, explained in April.
While the new plan was praised by leaders at CalMatters, Local Independent Online News Publishers, OpenAI—which is also part of the agreement—and Google's parent company, Alphabet, Glazer and various groups put out statements that range from skeptical to scathing.
"Despite the good intentions of the parties involved, this proposal does not provide sufficient resources to bring independent news gathering in California out of its death spiral," Glazer said a lengthy statement. "This agreement, unfortunately, seriously undercuts our work toward a long-term solution to rescue independent journalism."
"There is a stark absence in this announcement of any support for journalism from Meta and Amazon," he added. "These platforms have captured the intimate data from Californians without paying for it. Their use of that data in advertising is the harm to news outlets that this agreement should mitigate."
Charles F. Champion II, president and CEO of the California News Publishers Association, which represents over 700 newspapers and online publications in the state, was less critical, but still not fully pleased with the outcome.
"We appreciate the effort to bring together resources from both the public and private sectors to support local journalism," he said. "However, we believe that the financial commitments from Google and other tech companies should have been more robust, given the substantial revenues they generate from the distribution of journalistic content."
Seven labor union leaders—including Media Guild of the West president Matt Pearce—jointly declared that "California's journalists do not consent to this shakedown," and sent the state Legislature a letter of opposition over what they described as an "undemocratic and secretive deal with one of the businesses destroying our industry."
Noting the union opposition, Society of Professional Journalists national president Ashanti Blaize-Hopkins said that "it is concerning that journalists appeared to lose their seat at the table as this initiative was negotiated."
"At the very least journalists should be deeply involved in how this plan will be rolled out, as it could potentially impact their livelihoods," Blaize-Hopkins added. "As other states study this effort for lessons on how to bolster local journalism, I hope California leaders will set an example that both centers and honors the input of working professionals who fight tirelessly to keep the public informed."
Lee Hepner, senior legal counsel at the American Economic Liberties Project, which backed the CJPA, said Tuesday—before the agreement was officially announced—that "this backroom deal is bad for journalists, publishers, and all Californians, which is why state lawmakers including Gov. Newsom should reject it and proceed through a transparent legislative process."
"The fact that a journalism preservation bill may be replaced with a Google-funded AI Accelerator is not just absurd policy, it's horrendous politics," Hepner continued. "That this AI deal is reportedly close to being finalized and we still don't know the details speaks volumes about who is driving the decision-making process in Sacramento—and it's not the journalists, publishers, or newsrooms who have had their industry hollowed out by Google's monopoly."
After the deal was set, Free Press Action co-CEO Jessica J. González, whose group opposed the CJPA, said that "we are disappointed in this outcome and this process. Good policy is made out in the open, where people can see and participate in the democratic process."
"This deal, meanwhile, was hammered out behind closed doors between media giants and tech platforms," she stressed. "While we're awaiting final details, it seems clear that the result is an agreement that fails to meet the needs of California's journalists and communities."
González continued:
While some newsrooms will benefit from this deal in the short term, the funding is far too meager, the time span far too short, the commitment to localism and diversity far too inadequate. Lawmakers must view this outcome as the first step in a much broader process to revive and transform local news, not as a viable long-term solution.
Local journalism that helps people understand what's happening in their communities and holds the powerful accountable is a public good. Local journalists, community publishers, public interest groups, labor unions, and grassroots advocates worked tirelessly to make this a priority issue for lawmakers.
"Going forward, we encourage lawmakers to continue working with these groups, look beyond short-term measures, and begin envisioning the kind of structural policy change that's needed to truly stabilize and transform our media system," she added. "That means putting community publishers, ethnic media outlets, and nonprofit newsrooms at the center of any legislative intervention. These entities are closest to their communities and are doing incredible work to plug critical information gaps."
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Google Slammed for 'Playing Games With California's Democracy' by Blocking News
"This is an extraordinarily inappropriate time for Google to experiment with which voters might or might not see news about elected officials and candidates for office."
Apr 13, 2024
California reporters and union leaders are calling out Google for blocking news content for some users amid consideration of a landmark proposal that would make tech giants pay media outlets for links they share—which some experts warn won't solve the journalism industry's financial problems.
To prepare for potential passage of the California Journalism Preservation Act (CJPA), Google is "beginning a short-term test for a small percentage of California users," Jaffer Zaidi, the tech giant's VP for global news partnerships, explained in a Friday blog post.
"The testing process involves removing links to California news websites, potentially covered by CJPA, to measure the impact of the legislation on our product experience," he wrote. "Until there's clarity on California's regulatory environment, we're also pausing further investments in the California news ecosystem, including new partnerships through Google News Showcase, our product and licensing program for news organizations, and planned expansions of the Google News Initiative.
In response, Jon Schluess, president of the NewsGuild-CWA; Matt Pearce, president of Media Guild of the West TNG-CWA Local 39213; and Annie Sciacca, president of the Pacific Media Workers Guild TNG-CWA Local 39521 collectively called on state legislators and Democratic Gov. Gavin Newsom to "stand united against Google's undemocratic threats to censor the work of California's journalists by shutting off news access in the middle of an election year."
"Every voter's access to information counts; California's journalists are covering an ongoing congressional election in the 16th District, where two candidates received an equal number of votes," they noted. "This is an extraordinarily inappropriate time for Google to experiment with which voters might or might not see news about elected officials and candidates for office."
While Zaidi claimed that "we've been engaging with California publishers and lawmakers throughout the legislative process and have proposed reasonable and balanced alternatives to CJPA," the trio said "Google is not engaging with California lawmakers in good faith."
"During a December informational hearing related to that bill, amid discussion about the prospect of Google banning journalism from its services in California, Google News executive Richard Gingras testified to committee Chair Sen. Tom Umberg that Google had 'no desire to stop including news in Search,'" they pointed out.
"Given today's events, obviously Google's testimony to our elected leaders was not true," the union leaders added. "Google must stop playing games with California's democracy."
However, not all Big Tech critics support the CJPA and similar legislation, including those passed in Australia and Canada.
Journalist and professor Jeff Jarvis wrote Wednesday for Nieman Journalism Lab—summarizing his lengthy white paper commissioned by the California Chamber of Commerce—that "like its federal cousin, the Journalism Competition and Preservation Act (JCPA)," the CJPA "is the latest in a century's attempts by the newspaper industry to diminish fair use and extend copyright for the benefit of publishers against competitors."
As The Guardianreported on the California measure:
A study conducted by Free Press Action, a media reform advocacy group, found that more than 80% of websites that would benefit from reimbursement mandated by the bill are owned by just 20 major firms. Because of this, major media companies have lobbied heavily against the legislation.
"It's a Google versus corporate media fight, and in the end California residents are the ones being harmed," said Mike Rispoli, senior director at Free Press Action. "It speaks to real challenges facing local news today when how the news is created and how it is accessed is controlled by these large corporations that are just looking after themselves."
When Canada passed its law last year and Meta—the parent company of Facebook and Instagram—announced its plans to pull content from the platforms, Free Press senior director of strategy and communications Tim Karr warnedCommon Dreams of the "real world impacts" while also criticizing the legislation.
"It feels to me oftentimes that the impetus of the support for the bargaining code bills in Australia, Canada, and the United States is merely to punish Big Tech—and, of course, there are things that Big Tech does that deserve to be punished, but the real goal here is not punishing Big Tech," Karr said.
"Unless we take a serious look at the shifting economics of news production and create legislation meant to address that, we're going to just be kind of bailing water out of a sinking ship," he also stressed.
Google similarly threatened to block news content over Canada's law but struck a deal with the government in November.
Politico noted that Meta "permanently erased news content from its social feed in Canada and has threatened to do the same if Congress and California advance similar legislation."
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