Google announced Friday that it will test removing links to news sites from a small percentage of California users to assess the potential impact of the California Journalism Preservation Act should it pass.
Assembly Bill 886, also known as the CJPA, would require Google to pay news publishers for using news content on its platform. The bill passed the Assembly last year and is currently being considered by the state Senate Judiciary Committee.
In a Friday morning blog post, Google calls the CJPA a “link tax” that would require Google to pay for “simply connecting Californians to news article.” Google also claims that over the past two decades it has “provided substantial support to help news publishers navigate the changing digital landscape and innovate.”
No one should be fooled by this.
Google made more than $300 billion last year, most of it from advertising it sells using content it did not create or pay for. In its early days, Google sent lots of traffic for news publishers, but in recent years not so much as it seeks to keep people on its site where Google makes the money.
This is why Google’s revenue keeps growing while news publishers — and not just print newspapers — can barely keep the lights on. In fact, according to data from SimilarWeb, more than half of Google searches for top news terms end without a link being clicked. In other words, more than half the time, Google doesn’t actually connect anyone to the actual source of the news.
While Google seems to believe that news should be free — at least to Google — we in the news business are painfully aware that professional news gathering is expensive. And to be clear: News is a business. Google may not want to acknowledge it, but it’s big business for Google. That’s why news was the first thing that Google launched after search and why “news” is the first tab after “all” on the search results page.
It’s why Google is testing what would happen if it removed links to news from its site for some California users. For the record, Google tested removing the news tab altogether in February but apparently didn’t like the results, announcing that it would not be removing the news tab for all users.
Maybe that’s because news is a big part of Google’s business.
According to a recent study, a fair payment from Google for its use of U.S. news content would be $10 billion to $12 billion a year.
Google obviously does not want to pay that.
In a Senate hearing in December, Google’s representative said that news publishers earn $2 billion a year in advertising revenue from traffic Google refers to those publishers. That begs the question as to whether Google itself should actually pay anything at all for the content upon which it has built its extremely lucrative advertising business.
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Of course, Google’s stranglehold on digital advertising is the subject of an antitrust case filed by the U.S. Department of Justice and a coalition of states, which allege Google has a monopoly on digital advertising and has used its control of the market to steer advertisers to its own services and sites while depressing the revenues of publishers by manipulating pricing.
The Friday announcement that Google will suppress news for some Californians comes from the same playbook. Here is Google using its command of search — it controls 91.5% of the global search market, according to Semrush — to intimidate publishers and the public alike by threatening to withhold news.
Make no mistake about it: Content, especially news, is the cornerstone of Google’s business model, and Google’s criticism of legislation that would force it to pay for the materials it uses is a naked attempt to preserve its revenue streams by intimidating not only the media but also the public that wants to be connected to news online.
This kind of anticompetitive behavior is exactly why legislation like the CJPA is needed.