Google has started to test it’s ability to block news links in California in response to the CJPA (California link tax law).
When the Canadian government folded to Google and gave into their demands of a $100 million fund model, some people thought that this represented a major blow to the internet. Indeed, supporters of the Online News Act (Canada’s link tax law) simply took the $100 million price tag at face value and declared it a “victory”.
The problem is that, in my view, both perspectives place far too much value in that price tag while not really considering the implications of it all. As I and others have pointed out frequently, the $100 million isn’t even new money, but rather, rolls in previous deals into it. As a result, a good chunk of that value isn’t even new money. Additionally, with Meta’s pull out representing a loss of an estimated $230 million, the most optimistic way of looking at the situation is that the media companies wound up operating at a loss of $130 million. The Canadian government knew how devastating it would be if Google dropped news links in Canada and was desperate to do anything to prevent that from happening.
Worth noting in this whole affair is that shortly after the deal was reached, the large media companies started issuing a wave of pink slips. The CBC slashed 10% of its workforce while Bell slashed 9% of its workforce. All this even though the Canadian government issued a massive bailout of the entire sector in a bid to shore up the media companies losses. The mass firings laid bare that this whole affair ultimately had nothing to do with saving Canadian jobs and strengthening journalism. Realizing that they had bought into the lies hook, line, and sinker, the Canadian government was furious at Bell and dragged them into committee for a hearing where lawmakers demanded answers (answers that Bell was unwilling to provide for the most part).
Still, the “deal” struck with Google added to the commentary for those who think that Google is willing to throw the open internet under the bus by throwing money at the situation in an effort to make this whole situation go away. While Google was just signing away money, Meta was finally putting its foot down and announcing that it would not be renewing its deals with Australian publishers. Further, it announced that it is dropping its Facebook news tab in both the US and Australia to show that it is serious about the decision to simply decouple itself from news links.
Recently, the visual of Google going along with news links while Meta is proving that it is leaving got a bit murkier. In California, there are some lawmakers pushing the CJPA (California Journalism Preservation Act). This is California’s version of the link tax law. There is a federal version of the US link tax law known as the JCPA (Journalism Competition & Preservation Act) being bandied about as well, though it’s forward momentum had stalled for a while there. These two bills are likely the reason why Meta dropped its news tab in the US. Now, we are learning that Google has said it intends on experimenting with dropping news links in California in response to the CJPA. From Google’s blog:
A pending bill in the California state legislature, the California Journalism Preservation Act (CJPA), would create a “link tax” that would require Google to pay for simply connecting Californians to news articles. We have long said that this is the wrong approach to supporting journalism. If passed, CJPA may result in significant changes to the services we can offer Californians and the traffic we can provide to California publishers.
By helping people find news stories, we help publishers of all sizes grow their audiences at no cost to them. CJPA would up-end that model. It would favor 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.
As we’ve shared when other countries have considered similar proposals, the uncapped financial exposure created by CJPA would be unworkable. If enacted, CJPA in its current form would create a level of business uncertainty that no company could accept. To prepare for possible CJPA implications, we are beginning a short-term test for a small percentage of California users. 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. 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.
You could make a good case for two different possibilities of what this could mean. If you are more pessimistic about the situation, you could argue that it’ll likely not proceed beyond this test and Google would eventually just sign a deal to make this whole situation go away. This isn’t without precedent. In 2019, Google did a similar test in Europe in response to Article 11. In 2023, Google also did a similar test in Canada when it test blocked news link blocking in Canada. The tests weren’t necessarily followed up by a full news link blocking. So, a case could theoretically be made that the same thing won’t happen here for Google.
If you are more optimistic, however, you could make the case that this could very easily be different this time around. In the US, a much higher chunk of money is at stake. Publishers are trying to chisel $22 billion out of Google which is much higher than any estimate from Canada. What’s more, unlike the previous times Google tested all of this, we now have the results of what happened when Meta blocked news links in Canada.
After Meta dropped news links, their traffic to their service remained unchanged – a result confirming multiple studies on usage of Meta platforms. What’s more, Meta’s stock value soared and users gave a collective shrug at the lack of news links. The only ones that ultimately suffered greatly were the publishers. As a result of the large media companies greed, news publishers saw traffic to their Facebook pages collapse thanks to the news link blocking.
Further, when Google appeared before the Canadian senate, they told senators that less than 2% of search queries are related to news queries. In other words, if news links disappeared from Google’s services tomorrow, few would notice the difference. It’s entirely possible that Google was too scared to rely on their own evidence and research to pull the trigger while Meta was more willing to roll the dice. So, a case can be made that Google has learned a bit about what happens when you trust the data at hand. Alternatively, some might argue that Google and Meta platforms are two different services and what worked for one may not work for another.
Ultimately, you could go either way on whether or not Google is willing to follow these tests up with a full news link block. There’s plenty of valid arguments that could be made either way. Personally, I’m on the fence on how Google would proceed after such a test.
Regardless, this is the situation we find ourselves in today. Google is in the process of testing the possibility of blocking news links in California. As Mike Masnick of Techdirt points out, whatever anger people have, it should be placed on the large media companies that are putting the whole sector in this situation in the first place:
I’ve seen some people get mad at Google about this, just as people were mad at Meta when they did a similar thing in both Australia and Canada.
But that anger is misplaced: be mad at Rupert Murdoch, who would be the largest single beneficiary of the law by far. Be mad at California Assemblymember Buffy Wicks, who would be orchestrating this wealth transfer from companies that have employees in her district to Rupert Murdoch, and pretending this attack on the open web is somehow good for journalism.
Be mad at all the media companies that won’t report accurately on the problems of such a law because they so want in on this wealth transfer.
In the end, Google is doing exactly what the law suggests it should do. If the government taxes something, you get less of that thing. That’s a fairly fundamental economic concept. Here, the tax is ridiculously problematic because it’s (1) taxing something that should never be taxed: links on the open web, and (2) not a typical tax, but one where the monetary transfer goes directly from one industry to another. Either way, it remains a tax. And the end result of a tax is: less of what is being taxed. So, yes, if those links are taxed, there will be less links on Google and Meta to news sites.
And, obviously, this sucks for me as a California-based publication. But I don’t blame Google for doing what the law directly incentivizes. I blame Buffy Wicks for pushing an obviously flawed law, on a topic she clearly doesn’t understand, to please the local newspaper that endorsed her.
As we discussed last year, there’s historical precedent here. Richard Nixon passed a similar law in the 1970s, in exchange for newspaper endorsements. It hastened the collapse of local newspapers, but Nixon got his endorsements. Wicks seems similarly willing to sell out journalism in her state in order to get an endorsement. It won’t be good for smaller news publishers like ours. It won’t be good for the public. It won’t be good for the internet. But it will be good for Buffy Wicks and Rupert Murdoch.
That I definitely agree with. When this situation befell Canada, I directed my anger at the greedy big media companies for pushing these laws and the politicians that went along with their obvious lies. The only enjoyment I got out of the situation afterwards was when the big media companies scheme ultimately backfired. As a result, those large media companies saw traffic to their web services suffer as a result of their actions. It is kind of uncanny how similar the situation is in the US and Australia right now.
Okay, so, what do techno-libertarian people like you and Masnick actually want newspapers and governments to do in order to ensure people get informed by quality journalism?
Because it just feels like nonstop finger-wagging at anybody who’s not doing it “the right way”, and “the right way” all-too-often entails a “git gud and innovate harder, pull yourself up by your bootstraps” pep talk that doesn’t work with how messed up our capitalist system is.
The government has thrown hundreds of millions of dollars at the news sector over the last 5 years and all it has gotten us is demands for more money and a decline in trust in journalism.
Journalists need to accept that they are no longer the gatekeepers of information. People no longer need them to get sports, entertainment, weather, business, food and fashion information. Corporations, charities, governments, and politicians no longer need them to communicate with the public. They can communicate directly through social media.
Journalists can still play an important role in society, but they have to accept their role has changed and adapt accordingly.
What would you have them adapt to become? What is their role in society now, in your opinion? Getting one’s news directly from corporations, charities, governments and politicians on social media isn’t healthy for a society.
I want them to evaluate all the areas they cover and then decide to exit some, like weather, and expand others, like crime coverage. They could also decide to spin off some coverage, like sports and entertainment, into a national platform. Instead they keep trying to maintain the status quo.
News organizations don’t have a monopoly on producing accurate information. They want us to believe that news is more accurate than information from other sources, but that isnt necessarily true. A press release is a press release whether its printed in a newspaper or on a company’s website. A newspaper’s review of the budget may not be as good as a review from a major accounting firm. Medical blogs and websites (not all) are often more accurate than news reports. The key is users must apply critical thinking.
“techno-libertarian”, AKA, “people who know how the internet works”.
Anyway, the large media companies had decades of time to respond to the impending technological shift to the world of online, and they chose to believe that it was all just a “fad” that would “go away on its own”. As a result, they are basically paying the consequences of their actions and with link tax laws, they are basically trying to make it so that making millions is their right no matter what kind of poor decision making they would make.
What they should’ve done was, at minimum, adapt their coverage to be inclusive of all age groups instead of constantly chasing the attention of boomer generation audiences. Thanks to the constant coverage of things like “video games are the DEVIL!”, “Music is satanic!”, “Millennial have killed [insert literally any common thing here]”, and “social media is going to KILL you!”, media companies have been on a constant quest to alienate anyone who is younger than the boomer generation. Little wonder why those same audiences have increasingly tuned out of traditional media coverage over the years.
A second thing media companies could have done was offer services to better promote local small businesses. People could have used the local large media news site to look up what businesses are in town that offer, say, cake baking services, for instance. That way, the media companies could have really ingrained with the small business crowd and served the communities they operated in. At best, I’ve seen these companies offer simple advertising for those who had the cash to pay (which, in that model, could still be offered and businesses would have an incentive to use such services). Instead, many of these companies chose to chase the larger businesses and monopolies while leaving many of these small businesses behind.
Third, when social media was taking hold such as YouTube, media companies could’ve added on to their roster by, say, offering video streaming specific programs early on and establish a presence on such platforms. The media companies, instead, chose to either ignore those platforms entirely or, at best, post up recordings of their broadcast with little to no strategy on how to promote and grow that part of their business. The CBC has jumped onto this VERY late in the game and only started doing this recently, motivated by their lack of presence on Meta platforms.
Fourth (and this builds onto the third point), media companies could have also integrated premium content for anyone who wants to subscribe with their online presence by banding together and creating their own platform for video, audio, and written content. Offer a monthly fee to access all the content from the likes of CBC, CTV, Global, and others. The free component of establishing a presence on these other platforms that is specifically made for the platforms could very easily get audiences into consuming that content and pointing out this additional content on such a premium service. It’s somewhat similar to creators who use Patreon, but in a modified form.
Playing along with the technological realities of the day would’ve saved the media companies a LOT of headache in the long run. Instead, they chose to view anything internet (apart from their own “app” or website) as an opponent that needs to be fought against. There may well be time for the media companies to finally get on board with the reality of the internet being a big part, but it’s going to take a lot to right that ship at this point – especially with the mess they created with the Online News Act. Unfortunately, all I see are executives who look at ideas like these and responding with “well, that would cost time and money and we have no interested in doing risky things like that.”