Hello, and happy Thursday. There are 67 days until the election, but today we’re sticking to Sacramento, which I am now dubbing Googleville since that company seems to have a concerning amount of control over state government.
Please don’t confuse it with Whoville, where everyone was happy. We should not be happy.
I am referring to the now-dead Journalism Preservation Act (AB 886), a name that is almost funny considering how bad it turned out to be for the journalism and the journalists it set out to protect. But the secret deal around its demise is great for Google — and Meta and Amazon and insert-big-tech here. So there’s that.
And here’s a number I’d like you to keep in mind as we go: $42 million.
That is how much Google founder Sergey Brin is estimated to make each hour he works. Yes, each hour.
Let’s dive in. But hold your breath, because this stinks.
The bills that turned into a backroom deal
You may have heard in recent days about a proposed new public-private partnership between Google and the state that allegedly helps protect the collapsing news industry from total wreckage — labeled as a happy alternative to two pieces of legislation that were moving through the statehouse, but have now been killed.
Oakland Assemblymember Buffy Wicks was running AB 886, which would have made companies such as Google pay newsrooms for money it makes advertising next to their stories.
Sen. Steve Glazer (D-Orinda) was running SB 1327, a bill the tech companies hated even more because it would have taxed Amazon, Meta and Google for the data they glean from consumers and created a “data extraction mitigation fee” that would have gone to news publishers. Glazer said this could have brought in $1 billion a year for the news industry.
Instead, after under-wraps negotiations (led by Wicks with the help of former Senate Majority Leader Bob Hertzberg and involving the California News Publishers Assn., of which this newspaper is a part) that had no public involvement (no hearings, no transcripts, no transparency and definitely no media coverage) we get a resolution that excites no one but Google.
And it has no formal enforcement mechanism anyway, so it’s basically a handshake deal.
Except for the money you owe. That’s going to be formalized into the budget, starting with $30 million next year. Why are you, the public, being asked to chip in? We’ll get to that.
But first, the official take:
“This agreement represents a major breakthrough in ensuring the survival of newsrooms and bolstering local journalism across California — leveraging substantial tech industry resources without imposing new taxes on Californians,” Gov. Gavin Newsom said in a statement that makes me want to barf over its disingenuousness.
“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.”
Let me translate that for you: This deal does not provide close to the level of funding that is owed or that would be meaningful, but does help further decimate the once-dynamic California press corps, ensuring that the vital role of journalism in our democracy will continue to slide off a cliff until it is replaced by cheaper and less-nosy artificial intelligence.
But Newsom will have termed out by then and has never shown particular respect for the California press corps, so whatever, I guess?
So how did it happen?
To be fair to Newsom, he didn’t make the deal. But his public silence around the bills helped push a non-legislative resolution over the finish line. There’s three reasons for that:
- Newsom doesn’t want to take on big tech, which means he didn’t want either of these bills on his desk, where he would have had to either sign, or be the guy who sided with big tech.
- Newsom doesn’t want to take on big tech when he’s terming out and no longer has another office in clear sight.
- Newsom doesn’t want to take on big tech when he’s supposed to be laying low and not messing up Kamala Harris.
So Wicks was left starting negotiations on three wheels. She ended up, as Glazer called it on X (formerly Twitter), with a “2% solution” that “is not going to pull independent news out of their death spiral.”
Having both the Glazer bill in the Senate and the Wicks bill in the Assembly created pressure not only on Google, but also on Amazon and Meta. While both measures were hard sells, both also had support from legislators (even a few Republicans) and a shot at passing their house of origin, and maybe the whole joint.
That momentum was the threat and the leverage — that California, following in the footsteps of Canada and Australia, could set a legal precedent not only to help California journalists, but provide a model for other states.
Faced with that, Google warned it would do what it did in Canada — pull news off its platform, potentially reducing the audience for California publishers, according to sources with knowledge of the negotiations.
When I asked Google to comment on that, it referred me to an April blog post, when the company was experimenting with link removals. At the time, Jaffer Zaidi, vice president of Global News Partnerships, wrote that, “If passed, CJPA may result in significant changes to the services we can offer Californians and the traffic we can provide to California publishers.”
There was also talk that, if the bills passed, the laws could be tied up in “years of litigation,” according to Wicks.
So this was a good old-fashioned game of chicken. With only two weeks left in the legislative session, each side was beginning to sweat. Who would swerve first?
The answer is Wicks.
“I genuinely saw this as the best deal we were going to get,” she told me. “People may not like the outcome of where it’s landing, but it’s going to be resources in the hands of the public.”
Wicks has been working on this for two years, and I’ve talked to her multiple times about it. I do believe she had good intentions.
I don’t believe, as she told me she does, that politics is the “art of the possible.”
Because if we settle for what’s possible, we give up fighting for what’s right.
What next?
Again, this is a handshake deal, and part of the Google funding is dependent on what the state puts in — which will require legislative approval every year.
So really, this is a hope and a prayer for crumbs. There is no memorandum of understanding, no signing on the dotted line. Who knows what will happen?
But Google is supposed to put $15 million into a journalism fund next year, along with an additional $5 million for an artificial intelligence project and $10 million in direct donations to digital news outlets.
After that, for four years, Google would put $10 million into the fund, and give $10 million in direct donations (it already gives out some of these types of monies). All of this will be administered through a new nonprofit housed at UC Berkeley.
In all, it adds up to $250 million — about six hours of earning for Brin. And of course, it includes only Google. Everyone else is off the hook.
There are three things I find alarming about this deal, with all that in mind:
- It lacks transparency. Legislative deals should not be done in backrooms, especially deals that affect democracy.
- It sets the bad precedent that government needs to pay to prop up journalism, rather than requiring those profiting from it to pay their fair share.
- It sets the bad precedent that Google and other tech companies are more powerful than government.
A bigger pond
So is all lost?
The Senate was not happy with Wicks’ deal, and Senate Pro Tem Mike McGuire said in a statement that the Senate is “committed to continuing to work with all sides.”
Even those in the business are conflicted. The CNPA, which sponsored Wicks’ bill, supports the deal, calling it a “first step toward what we hope will become a comprehensive program to sustain local news in the long term.”
The Media Guild of the West, representing union journalists, including at The Times, is vehemently opposed.
But one thing is clear: Google has shown just how powerful it is. Any action against these technology giants will probably need to come from the U.S. government.
Sen. Amy Klobuchar (D-Minn.) and Sen. John Kennedy (R-La.), have been pushing a bill for years that would provide compensation for news publishers. Of course, with a Republican-controlled House, it won’t go far. But maybe that changes in November.
And in a landmark ruling this month, a federal judge decided that Google has acted illegally with its online search business to maintain a monopoly. It’s a huge antitrust decision on par with the historic cases against Standard Oil or AT&T.
The U.S. Department of Justice could seek to break the company up — but of course, Google will appeal and any resolution is far off.
Still, “This victory against Google is an historic win for the American people,” Atty. Gen. Merrick Garland said in a statement. “No company — no matter how large or influential — is above the law.”
Just above lawmakers, in California at least.
What else you should be reading
The must-read: Far From Presidential Battlegrounds, Blue States Could Decide Congress
The power players: Zuckerberg’s new Washington game
The L.A. Times Special: Column: The Harris-Newsom competition is over and it’s clear who won. The governor doesn’t seem happy
Stay Golden,
Anita Chabria
P.S. Donald Trump is out with a new collection of digital trading cards for the low price of $99 each — you can even pay in crypto. Amazing.
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