Google’s California Hush Money Won’t Fix Journalism’s Woes

Link taxes are bad, m'kay? They harm the public. They harm the open internet. And they harm the news orgs themselves. There is no reason to support them at all. But, many (thankfully not all!) media organizations and politicians love them. Media orgs like them because they think it will bring them free money (though, often enough, it just brings them less traffic and no money).

This year, California brought back an old proposal for a link tax from state Rep. Buffy Wicks, along with a separate proposal from state Senator Steve Glazer to just tax the digital advertising business, claiming that it's a form of pollution, and proposed using that tax to fund journalism.

While getting more funding for journalism is obviously a good idea, the plan to tax internet companies is tremendously problematic for all the reasons we discussed above. On top of everything else, it also takes away the incentive for media orgs to come up with sustainable, working business models for themselves, encouraging them, instead, to wait until the legislature deigns to force tech companies to funnel money in their direction.

As almost always happens whenever these kinds of bills get close to passing, Meta promises to stop links to news (and mostly seems to follow through). Meanwhile, Google says it will do so, but then blinks and cuts a deal to pay off everyone, such that even if the law passes, they have already paid the vig. Google did it in Australia, and it did it in Canada. Both times it agreed to cough up a bunch of money. And even though in both countries a link tax came into effect, both payments were made outside of the link tax, and basically acted as a here, take this money, don't try to enforce the link tax on us" move.

This time, it looks like Google made the payoff earlier, to stop the law in California. A few weeks back, Wicks announced that her office and Google had come to an agreement to fund a bunch of journalism orgs with money from both Google and the state, and that she wouldn't continue pushing her link tax bill.

Today, Assemblymember Buffy Wicks announced the establishment of a first-in-the-nation partnership with the State, news publishers, major tech companies and philanthropy, unveiling a pair of multi-year initiatives to provide ongoing financial support to newsrooms across California and launch a National AI Accelerator.

Together, these new partnerships will provide nearly $250 million in public and private funding over the next five years, with the majority of funding going to newsrooms. The goal is to front-load $100 million in the first year to kick-start the efforts. The total investment could increase over the next several years if additional funding from private or state sources becomes available.

That link has a lot of people coming out in support of the deal, including some smaller publishers, claiming that this is a win" for everyone. However, I doubt that very much.

But, more to the point, the whole appearance of this is ridiculous. It looks like Google paying the state of California to not pass the link tax law, with a bunch of that money then being handed off to some journalists. It's very unclear at this point how the money will be distributed, but I'm going to take a wild guess and suggest that sites like Techdirt will likely be ineligible, because we always are.

More importantly, though, these kinds of deals never last. A few years back, you may recall that a very rich real estate developer with no understanding of privacy law pushed a very bad privacy law as a referendum across California. The companies cut a deal with him, rushing a very poorly drafted privacy bill through the California legislature in exchange for him dropping the ballot initiative. And it worked. For two years. Then he put another terrible referendum back on the ballot because he didn't like how things were working out.

Already, Glazer (the author of the tax all digital advertising" bill) is complaining about the deal, suggesting he's not likely to stop pushing his additional tax bill.

Glazer in a media call said he wasn't satisfied with the deal and faulted the agreement as too small to help independent news organizations, as well as lacking involvement from Meta or Amazon.com Inc. Meta declined to comment on the announcement, according to a spokesperson.

These platforms, along with Google, have captured the intimate data from Californians without paying for it," he said. The use of that data in advertising is the harm to news outlets that this agreement should mitigate and which it does not."

So even if Google thought it was buying off the legislature here to drop these bills, it seems highly likely that something like this will return either way, because it's never going to be enough."

Again, I'm strongly in favor of figuring out more and better ways to fund journalism. But this one comes across as a cynical attempt to stop a bad law by investing in a fund with few details on how or where that fund will be deployed. It seems ripe for corruption, and even journalists who are in favor of link taxes are calling it out as an unfair backroom deal.

The problem in all of this is that people are rushing to see where they can extract money from to transfer it around, rather than figuring out ways to build actual long-term, sustainable business models that aren't reliant on politicians pointing to this or that company and saying you, hand over some money to these journalists I like."