Google recently announced that it is testing the removal of links to California news sites for some users in the western US state. This decision comes as the California Journalism Preservation Act, which would create a “link tax” for connecting users in the state to news articles, is being considered by legislators. Google Global News Partnerships vice president, Jaffer Zaidi, expressed concerns about the potential impact of this legislation on the company. Zaidi argued that the uncapped financial exposure created by the CJPA would be unworkable and create a level of business uncertainty that no company could accept.
Google and Facebook-owner Meta have faced similar challenges in other jurisdictions. In Australia, Facebook briefly blocked news articles on its site in response to a similar law, before ultimately reaching agreements to compensate news publishers. Similarly, an agreement was reached in France in 2022 to allow news content on Google’s platform. In Canada, a $100 million annual compensation deal was struck between Google and Canadian media companies. These developments highlight the ongoing global debate over the relationship between tech companies and news outlets.
Google’s trial of removing links to news websites covered by the CJPA aims to measure the effect on its platform. Zaidi noted that only two percent of Google search queries are news-related, as consumers increasingly turn to alternative sources such as short-form videos, newsletters, podcasts, and social media for their news consumption. This shift in consumer behavior poses challenges for traditional news outlets that rely on online advertising revenue.
Zaidi emphasized the need for support from both the California government and private companies to ensure a healthy news industry in the state. Google has also announced a halt in investments in the California news “ecosystem” until the regulatory landscape becomes clearer. The outcome of the CJPA legislation will have far-reaching implications for the future of news publishing and the relationship between technology companies and media outlets.
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