Google Threatens To Pause Google News Initiative Funding In US
Google has warned nonprofit newsrooms that a new California bill taxing Big Tech for digital ad transactions would jeopardize future investments in the U.S. news industry. "This is the second time this year Google has threatened to pull investment in news in response to a regulatory threat in California -- but this time, hundreds of publishers outside of California would also feel the impact," reports Axios. From the report: Google's new outreach to smaller news outlets is happening in response to a different bill, introduced this year by State Sen. Steve Glazer, that would tax Big Tech companies like Google and Meta for "data extraction transactions," or digital ad transactions. Tax revenue would fund tax credits meant to support the hiring of more journalists in California by eligible nonprofit local news organizations. With the link tax bill, Google only threatened to pull news investments in California. But the company is telling partners that the ad tax proposal will threaten consideration of new grants nationwide by the Google News Initiative, which funds hundreds of smaller news outlets, sources told Axios. Previous commitments, however, should be secure. A spokesperson for the Institute for Nonprofit News said the organization believes that grants previously committed through GNI as described here "are secure, so INN members should continue to benefit through this particular Fundamentals Labs program." Google's concern, sources familiar with the company's thinking told Axios, is that the new California ad tax bill could set a troubling wider precedent for other states. California's Senate tax committee approved the "ad tax" bill May 8. Days after that, Google started making calls to nonprofits about potentially pausing future Google News Initiative funding, sources told Axios. Opponents argue (PDF) the ad tax burden would get passed down to consumers and businesses. They also say the measure would face legal challenges, similar to a digital ad tax introduced in Maryland last year.
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