Google up against California’s news law, starts blocking news websites | Technology News

“It would favour media conglomerates and hedge funds—who’ve been lobbying for this bill—and could use funds from CJPA to continue to buy up local California newspapers, strip them of journalists, and create more ghost papers that operate with a skeleton crew to produce only low-cost, and often low-quality, content. CJPA would also put small publishers at a disadvantage and limit consumers’ access to a diverse local media ecosystem,” wrote Jaffer Zaidi, VP, Global News Partnerships, in the blog post.

What is the California Journalism Preservation Act (CJPA) ?

The CJPA was introduced in the California state legislature and cleared by it in 2023. In order to become law, it will also have to pass the senate, which will make some amendments, and then it will have to be signed by the state’s governor Gavin Newsom. CJPA would require platforms like Google to give a “ journalism usage fee payment” to eligible digital news organisations whose content appears on Google search results and elsewhere.

Eligible California-based news outlets will have to submit a notice to Google. The search will then have to track the number of links to those outlets that were displayed on its platform and whether the news outlet’s work was present to residents in California. Based on all this, Google will have to give a percentage of its advertising revenue to the news organisations that apply.

Why do Google and others oppose CJPA?

Google’s stated intention for opposing CJPA is that it will somehow give large news conglomerates an undue advantage over smaller newsrooms but it does not explain how that will happen.

Interestingly, that has already been happening in a digital landscape that is dominated by giants like Google and Meta. Studies by the Reuters Institute have found how massive conglomerates like the New York Times and others have increased their audience share at the expense of small local publishers in the past.

But the real reason is that this new law could eat into the company’s revenues and profit margins — something that is unthinkable for a publicly traded tech company whose stockholders expect them to grow their revenues every year. That is why Google has opposed similar legislature in many parts of the world.

And while Google said it is “experimenting” with removing news from California-based outlets for Californians, Meta said that it will be forced to remove news from Facebook and Instagram “rather than pay into a slush fund that primarily benefits big, out-of-state media companies under the guise of aiding California publishers.

Who is right?

Some of the concerns posed by Google and others are legitimate. For example, there is a need for a cap on the maximum amount that the company will be required to pay out. This could be based on many factors but without it, there is a chance this law could put the company at the risk of significant financial exposure.

And there is also a chance that news outlets that primarily operate outside the state could pose as California-based outlets to profit from the new law. But that is beside the point.

Over the past few years, companies like Google and Meta have built digital advertising monopolies partly on the work of journalists whose reportage people around the world are interested in reading. In the meanwhile, the news business has been in a sort of freefall over the past few years as advertising revenues shifted to the digital space, where a few organisations hold a monopoly.

But laws like CJPA could potentially bring back some of that revenue, especially to small and struggling local news outlets, which in many cases can be considered the backbone of the fourth estate.