Google is currently testing the removal of links to California news sites for select users in the western US state as legislators consider implementing a “link tax” on the internet search giant. This move comes in response to the California Journalism Preservation Act (CJPA) that is being reviewed by the state senate, with significant implications for the tech industry.
According to Jaffer Zaidi, Google’s Global News Partnerships vice president, the company believes the financial ramifications of the CJPA would be unsustainable, leading to significant business uncertainty. The proposed law aims to compel tech companies like Google and Meta (Facebook’s parent company) to compensate news outlets for the content shared on their platforms.
In response to similar legislation in other countries, tech giants have faced challenges. For instance, Facebook temporarily blocked news articles in Australia in 2021 before reaching agreements with news publishers to provide compensation. In France, Google collaborated with publishers to display news content on its platform, demonstrating a willingness to negotiate. Similarly, Canada and Google signed a deal in 2021 for the tech company to pay Canadian media organizations $100 million annually for lost advertising revenue.
Proponents of “link tax” laws argue that tech companies benefit from news content by attracting users and generating advertising revenue that would otherwise support struggling news organizations. In response, Google is conducting a trial to assess the impact of removing links to news websites that could fall under the jurisdiction of the CJPA. Zaidi notes that only a small percentage of Google searches are news-related, indicating a shift in how people consume news.
As the debate around the CJPA continues, Google is pausing investments in the California news industry until there is clarity on regulatory directives. Zaidi emphasizes the need for collaboration between the government and private companies to sustain a healthy news ecosystem in California. The outcome of these deliberations will likely shape the future of news consumption and digital regulations in the state.
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