California State Governor Gavin Newsom has announced a $250 million deal with Google to help fund journalism and AI development in California, around half of which would be funded by Google.
The deal includes the dropping of legislation that would have required Google to pay fees long-term to access content from news sites.
Lobbying Success?
The deal follows an intense period of tech company lobbying, including claims that Google would remove Californian news from their results.
In recent years, Google have become dominant in the online advertising sector, diverting a key source of income for online news outlets, who have had to lay off staff to cut costs.
Precedent Elsewhere
The dropped bill would have meant that Google would have had to regularly contribute into a fund that would distribute money to news outlets based on their size.
Similar bills in Australia and Canada already raise, every couple of years, more than the money promised by Google, and Australian and Canadian sites were not removed from their searches.
Link Tax
Google grandiosely opposed the bill that had been put forward by Assemblymember Buffy Wicks, who had argued that a healthy journalism sector is essential to a functioning democracy.
They branded Wicks’ bill a “link tax” that would “break the fundamental and foundational principles of the open internet.”
The Final Deal
The ultimate $250 million deal touted by Newsom involves a substantial financial commitment from Google of more than $130 million, in exchange for state funding into an AI initiative.
Google would jointly support local newsrooms with state funding and continue funding its “existing journalism programs,” while the state will also contribute funding in the form of an AI business development program.
Secret Deal
The deal was criticized by Matt Pearce, president of the Media Guild of the West, for the nature of how the negotiations around the final deal took place in the run-up to its announcement.
As much of the details of negotiations were made behind closed doors, Pearce branded it a “secret deal.”
Added Benefit to Google
As part of the deal, the state have agreed to commit a large chunk of public finances towards AI initiatives for businesses, a sector Google are committed to.
Google have praised the deal, and suggested it would help to develop “a national center of excellence on AI policy.”
Newsom Reaction
Newsom, in a statement announcing the deal, believes it to be “a major breakthrough in ensuring the survival of newsrooms and bolstering local journalism across California.”
He said: “The deal not only provides funding to support hundreds of new journalists, but helps rebuild a robust and dynamic California press corps for years to come, reinforcing the vital role of journalism in our democracy.”
Wicks Reaction
Wicks, who had initially put forward the dropped legislation, praised the replacement deal as “a cross-sector commitment to supporting a free and vibrant press.”
However, she also said: “This is just the beginning. I remain committed to finding even more ways to support journalism in our state for years to come.”
Entrenches Monopoly
Pearce was more damning, suggesting that the deal would only serve to further solidify Google’s monopoly business practices, for which they have already been fined elsewhere.
He criticized the deal, saying that “we’re looking at an unenforceable public-private partnership where taxpayers are more on the hook for funding local newsrooms than a literal monopoly whose own contributions appear to be tax-deductible.”
