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

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.

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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.

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“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