Google is taking down links to California news sites in response to proposed state law mandating major tech firms compensate news outlets for their material, as announced in a blog post on Friday.
In its statement, Google, a subsidiary of Alphabet (GOOGL), described the action as a "test," affecting only a small fraction of California users. The move is designed to assess "the impact of the legislation on our product experience."
The California Journalism Preservation Act, introduced in March 2023 and pending a hearing by the state’s Senate Judiciary Committee, demands digital platforms like Google and Meta pay a "journalism usage fee" to qualifying news outlets when utilizing their content alongside digital advertisements.
Meta has not yet responded to CNN's inquiry.
This legislation arises as more individuals shift from traditional news sources to social and online platforms. Concerns mount over the platforms' news aggregation practices potentially diverting users from news websites, prompting alarms about the platforms' increasing control over content visibility.
On Friday evening, California State Senate President Pro-Tempore Mike McGuire, a bill co-author, condemned Google's move as "bullying" and an "abuse of power."
"This is a dangerous threat by Google that not only sets a terrible precedent here in America, but puts public safety at risk for Californians who depend on the news to keep us informed of life-threatening emergencies and local public safety incidents," McGuire stated on X, previously known as Twitter. "This is a breach of public trust and we call on Google Executives to answer for this stunt."
Advocates of the bill argue that tech giants profit from sharing content from small and local news publishers without providing adequate financial compensation.
"These dominant digital ad companies are enriching their own platforms with local news content without adequately compensating the originators," said Assemblymember Buffy Wicks, co-author of the bill, in a statement from March 2023. "It’s time they start paying market value for the journalism they are aggregating at no cost from local media."
Charles F. Champion, president and CEO of the California News Publishers Association, accused Google of stifling California news.
"The fact that a single corporation can halt the access route through which 90% of the populace discovers online content to further their own political and commercial interests underscores the urgent need for policymakers to intervene, and intervene promptly," he posted Friday on X. "Google is not exempt from the law, and they should not be permitted to behave as though they are."
"Google's ultimatum to withhold vital information from Californians in response to proposed legislation... is appalling," remarked Chris Argentieri, the president and chief operating officer of the Los Angeles Times, in a statement to CNN on Saturday. "Google's reaction serves as further evidence supporting the necessity of the legislation and underscores the validity of the scrutiny they are under from the U.S. Department of Justice. California has a history of rejecting such bullying tactics, and I anticipate the outcome in this instance will be no different."
Google has consistently opposed what it terms as a "link tax."
"As we've articulated when similar proposals were considered in other countries, the unlimited financial liability introduced by CJPA would be impractical," stated Jaffer Zaidi, Vice President of Global News Partnerships at Google, in Friday's blog post. "If enacted, CJPA in its current state would introduce a level of business uncertainty that no corporation could tolerate."
Alphabet disclosed $307.4 billion in revenue in 2023.
Google resisted a comparable bill enacted in Canada in June 2023, stating at the time it would "eliminate links to Canadian news from our Search, News, and Discover products in Canada." In November, the company announced it was "engaging in the exemption process" with the Canadian government and pledged to continue "directing valuable traffic to Canadian publishers" while negotiations were ongoing.
Google informed CNN in a statement on Saturday that it was still undergoing the exemption process but did not reveal the current status of discussions with the Canadian government.
The corporation had a similar response to a 2021 Australian law mandating platforms compensate Australian news providers for utilizing their content. In January 2021, a few months prior to the law's passage, Google stated in an open letter, "(if) the Code were to become law in its current state, we would have no alternative but to cease offering Google Search in Australia."
Google eventually reached "voluntary commercial agreements with a significant number of news media organizations," as reported by the Australian Competition and Consumer Commission, the body responsible for drafting the legislation. Google indicated it would remunerate publishers through its Google News Showcase instead of compensating them for links.
