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Google-California Deal Should Be a Wake-Up Call: Digital Monopolies Hurt Journalism
Google is the sole winner of this deal, and this should be an example of what not to do to redress power and financial imbalances between news media and large digital platforms.
Sep 05, 2024
A California-Google deal that would provide $250 million for local journalism and an “AI accelerator” program was announced by California Gov. Gavin Newsom as a “major breakthrough” to ensure the “survival” of newsrooms across the state. In exchange, the state has agreed to kill the California Journalism Protection Act, a bill that would have forced the tech giant to share revenues with news publishers and which was deemed to be more transparent than similar legislation in Australia and Canada.
News publishers and other advocates focusing on the good side of the deal (more money) have also been cautious about celebrating it. Journalists’ unions and associations have been more straightforward in decrying it. Altogether, newsrooms are feeling the toll of elongating their “survival” mode, especially if the trade-off is to continue handing their future to those who helped create their crisis.
By eliminating legislation enforcing revenue-share agreements, California has reduced Google’s financial liability compared with Australia and Canada, where news outlets, including broadcasters, are compensated for creating value for Google. In addition, Google got the state of California to pick up an important portion of the $250 million bill using public funding. More significantly, the deal allowed the corporation to avert disclosing how much value news generates for Google’s search engine, which estimates put at $21 billion a year in the U.S. based on searches using news media content.
Concentrated market power is hurting the chances for a free and financially independent press to thrive.
Let’s be clear: Google is the sole winner of this deal, and this should be an example of what not to do to redress power and financial imbalances between news media and large digital platforms. If anything, it should be a wake-up call to the harmful effects of digital monopolies on the news media industry. Governments can no longer spare Google and other tech giants from their role in the financial crisis of journalism.
The recent ruling from a federal district court confirming Google’s monopoly over search tells part of this story. Although that case didn’t address the corporation’s impact on newsrooms, we learned that Google’s grip on advertising demand couldn’t have been achieved without a key illegal practice: its multibillion-dollar contracts with phone makers that were designed to squash rival search engines. Today, search advertising continues to be the largest channel capturing ad spend in the U.S.
Most importantly, this stranglehold enabled Google to constrain media’s bargaining power and prevent any meaningful discussion about the dollar value news content provided to its search engine—as the looming threat of permanently turning off news access would have hurt the press even more. Without significant challengers to Google’s search engine, newsrooms are beholden to Google’s whims for news discoverability and distribution on search results.
A separate trial starting next week tackling Google’s monopoly over advertising technologies (ad-tech) is likely to complete the story of this corporation’s role in this crisis. The ad-tech industry, once thought to help news publishers make revenue from digital, has become extraordinarily complex, opaque, and concentrated. At the same time, it is the backbone that connects advertisers and publishers to buy and sell ads across the web—providing an alternative to search and social media ads, all of which drives a marketplace worth around $300 billion in the United States alone.
Besides controlling search ad revenues, Google also controls the ad-tech platforms upon which most ad sales by news publishers are made. Without getting too technical, in practice this means Google has eyes on the value of news publishers’ ad inventory, on advertisers’ preferences and perceptions about those publishers, and on the algorithms that connect the two to determine ad prices.
Also unchallenged, Google controls between 50% and 90% of transactions in each layer of this market, where it takes a cut of about 35% of each ad dollar spent. In the trial, the Department of Justice is expected to cut through the ad-tech complexity and show how Google has also manipulated ad prices to divert ad dollars away from news publishers into the tech giant’s own pockets. For the first time in many years, in this case the DOJ is seeking a breakup to redress Google’s harms.
As a counterargument, Google has been trying to push a story in which a “very competitive” market already exists, since multiple giants in various other sectors—Amazon, Walmart, CVS, etc.—are also competing for ad dollars. This view invites us to presume news publishers and journalists must be doing something wrong, so what else is there to do but to help them to “survive” in this brave, new world?
But nothing could be further from the truth. Newsrooms across the world have not stopped innovating, changing their revenue models, and adapting to audiences’ new habits. Journalists continue to defend their trade and the rights that ensure they can do their jobs safely. People still want to find reliable news. But when it comes to competition, how do we even call it that when a handful of players control not only where news is discovered and accessed, but also drive appetite to monetize audiences’ personal data, and ultimately assign value to a publisher’s ad inventory?
The fight for legislation in California that would redress these imbalances was the first step—not the ultimate fix—to coming out of the “survival” mentality that has been entrenched for far too long in journalism. Concentrated market power is hurting the chances for a free and financially independent press to thrive. As long as short-term fixes like the California-Google deal, obscure this reality, we will continue to allow the very same people we should be holding accountable to shape the future of democracy.
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Elite News Media Are Blowing Yet Another Election
Major outlets have proved so bad at this, many candidates—and increasingly the voting public as well—would just as soon get by without them. Are they wrong?
Aug 28, 2024
This column, about the decline and fall of America’s political news media in such a pivotal election year, has proved very hard to write — not for a lack of material, but because I can’t keep pace with every day’s new and stunning examples of bad journalism, each one spiraling a tad lower.
I’ll start with the weekend’s lowlight: a news story that worked up the media food chain from the muck of smaller right-wing outlets, then got boosted on X/Twitter by Alex Thompson, awidely read national political correspondent for Axios, before the New York Post hyped it in your local Wawa and eventually the New York Times felt compelled to address it. You see, an idea that has animated the right for the last couple of weeks is the fantasy that Democratic vice presidential nominee Gov. Tim Walz is a phony. Sunday’s purported news slammed Walz for a 2006 episode when his then-congressional campaign claimed he’d won a youth award from the Nebraska Chamber of Commerce when really it was — get this! — the Nebraska Junior Chamber of Commerce!
Never mind that the 2006 Walz campaign had corrected this tiny mistake (picture Barack Obama doing the hand thing, but even smaller), probably the work of a junior staffer, the second they learned about it. The nattering nabobs of negativism had accomplished their mission in a year when the elite mainstream media has lost its doggone mind — going after small daily clickbait like a puppy chasing its tail, demanding news conferences only to ask trivial questions, issuing ludicrous “fact checks,” and desperately seeking gravitas in the candidate just found guilty on 34 felony counts and liable for rape and financial fraud, who was dinged by NPR for 162 lies or distortions in just one news conference.
Indeed, the outrageous overinflation of the Walz story was nearly forgotten by Monday morning when the Times, which has bent over backwards to belittle the joy of Kamala Harris’ wildly successful Democratic National Convention in Chicago last week, published an op-ed from the editor of the conservative National Review, Rich Lowry, headlined simply: “Trump Can Win on Character.” Perhaps that’s true, as critics noted, if voters do what Lowry did in his piece and pretend that inconvenient facts like the Jan. 6, 2021 insurrection or the fraud verdict had never happened. But while the column was ridiculed on social media, few people said they were giving up on the Times — because in this annus horribilis for the American media, many had already tuned out the NYT weeks or months ago.
Mainstream journalists can carp and whine about this all they want, but when less than a third of Americans trust the mass media, few folks are listening to them.
It wasn’t supposed to be like this. The NYU professor and media critic Jay Rosen urged journalists to cover “the stakes, not the odds” of the 2024 election while Margaret Sullivan — who writes for the Guardian and her Substack after stints at the Times and the Washington Post — was more blunt in beseeching the press to ignore the pull of both-sides journalism and take seriously the threat to democracy posed by Trump, who tried to override his 2020 election loss and has made no comforting assurances that he won’t try to do the same after Nov. 5, 2024.
Few journalists — if any — have listened. Much of the righteous fury during the Chicago DNC was directed at fact-checkers from the Times, Post, and independent organizations like PolitiFact. These organizations or practices were mostly established after the endemic political lying of the 2000s — remember the Iraq War? But while no one would argue with their stated approach of tough, unbiased scrutiny of all sides, the fact-checking industrial complex can’t handle the truth when one party’s platform is based on a firehouse of lies and the other party is trying to be serious, if not always literal, about reality.
So Democratic convention week brought absurdities like PolitiFact tackling a DNC video that showed an actual Trump 2016 quote that “there has to be some form of punishment” for women who have abortions and labeled it “mostly false” (!!) because his panicked aides later told him to walk back such a politically damaging statement. Also typical was USA Today calling it “false” when the DNC talks about “Trump’s Project 2025″ because the blueprint for his presidency was produced by the Heritage Foundation, even though most of its authors are former and would-be future Trump staffers and it offers the only program for filling jobs in a Trump administration.
C’mon, man.
It would require another column — maybe a book — to explain why this is happening. I see it as less the public’s main complaint (corporate control of the media) and more about our profession’s weird value structure, where it’s more important to be savvy, cynical, and not be portrayed as naive shills for liberalism than to care about saving democracy from authoritarian rule, on top of maybe a new and not always healthy brand of careerism from younger journalists.
The Chicago-based media critic Mark Jacob, a retired veteran editor of that city’s Tribune and Sun Times, nailed it Monday with a piece headlined “Mainstream media on a path to irrelevance.” Jacob has harsh words for how reporters have covered the race, writing that “too many political journalists are marinating in the Washington cocktail culture, writing for each other and for their sources — in service to the political industry, not the public.” But he also notes that traditional media can’t figure out how to compete for young eyeballs against sites like edgy and fast-paced TikTok. Jacob pointed out that public faith in mass media has plunged from 72% in 1976, after Watergate, to just 32% today.
You know who gets the new landscape better than anyone else? Kamala Harris.
The vice president and Democratic nominee is running to be America’s first post-media president. In Chicago, much was made of the fact that Team Harris and the Democrats invited 200 sometimes fawning internet “content creators” who got VIP treatment while mainstream journalists fought over nosebleed-level seats and refrained from eating or going to the bathroom for fear of losing them.
Harris feels she doesn’t need journalists at all, and a lot of the public is cheering her on.
But more broadly, Harris and her campaign is 100% focused on message discipline to build her brand and sell it to the American people in a few short weeks. The surest way to get thrown off that message discipline would be a stray answer at an open news conference or in an interview with the likes of NBC’s Lester Holt — so for now, Harris is simply not doing that.
And she’s getting away with it. Mainstream journalists can carp and whine about this all they want, but when less than a third of Americans trust the mass media, few folks are listening to them. What’s been really striking this year is that while traditionally deep distrust of the mainstream press has long been the province of right-wing Republicans, now it’s liberals who once cheered for the media to do better who seem to be giving up on them.
This is not great. For one thing, the plunge in faith leads to cancelled subscriptions that leads to laid-off reporters or shuttered printing plants — not the vision of America’s founders who believed a free press is essential. In this campaign, I think the healthy journalistic mindset is that we want to save democracy in November, but we also want Harris to show she can answer at least a few tough questions and explain her policies beyond hopelessly vague generalities.
The reality, though, is that Harris might surge into the White House in January doing very little of this — maybe none at all, especially if Trump actually chickens out of their Sept. 10 debate in Philadelphia. Fifty years ago this summer, Richard Nixon resigned the presidency because people believed what they read about him in the Washington Post. Today, Harris feels she doesn’t need journalists at all, and a lot of the public is cheering her on. And a vainglorious elite news media with severe tunnel vision has no one to blame but themselves.
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California-Google Deal Called 'Disaster for Journalism and Good Government'
One critic said the agreement "was hammered out behind closed doors between media giants and tech platforms," and "fails to meet the needs of California's journalists and communities."
Aug 22, 2024
Anti-monopoly and media groups this week are sounding the alarm over a new agreement between California and Google that kills two state bills focused on funding journalism.
Both supporters and critics of the bills—state Sen. Steve Glazer's (D-7) S.B. 1327 and Assemblymember Buffy Wicks' (D-14) A.B. 886, also known as the California Journalism Preservation Act (CJPA)—have expressed concerns about the deal that Wicks announced and Democratic Gov. Gavin Newsom cheered as "a major breakthrough" on Wednesday.
Glazer's bill would have imposed a 7.25% tax on online advertising revenue to create a tax credit for California newsrooms while the CJPA would have made platforms pay part of their ad revenue to media outlets for using their content. Big Tech was fiercely against both proposals.
Negotiators settled on providing nearly $250 million in private and public funding over the next five years to launch a National AI Accelerator and a News Transformation Fund, to be administered by the University of California, Berkeley Graduate School of Journalism, according to Wicks, who claimed that "this is just the beginning."
As CalMattersreported:
Instead of Google and Meta being forced to negotiate usage fees with news outlets directly, Google would deposit $55 million over five years into a new fund administered by UC Berkeley to be distributed to local newsrooms—and the state would provide $70 million over five years. Google would also continue paying $10 million each year in existing grants to newsrooms.
The Legislature and the governor would still need to approve the state money each year; the source isn't specified yet. Google would also contribute $12.5 million each year toward an artificial intelligence "accelerator" program, raising labor advocates' anxieties about the threat of job losses.
The deal came after more than a year of debate over the bills, during which Google came under fire for testing that involved "removing links to California news websites, potentially covered by CJPA, to measure the impact of the legislation on our product experience," as Jaffer Zaidi, the tech giant's VP for global news partnerships, explained in April.
While the new plan was praised by leaders at CalMatters, Local Independent Online News Publishers, OpenAI—which is also part of the agreement—and Google's parent company, Alphabet, Glazer and various groups put out statements that range from skeptical to scathing.
"Despite the good intentions of the parties involved, this proposal does not provide sufficient resources to bring independent news gathering in California out of its death spiral," Glazer said a lengthy statement. "This agreement, unfortunately, seriously undercuts our work toward a long-term solution to rescue independent journalism."
"There is a stark absence in this announcement of any support for journalism from Meta and Amazon," he added. "These platforms have captured the intimate data from Californians without paying for it. Their use of that data in advertising is the harm to news outlets that this agreement should mitigate."
Charles F. Champion II, president and CEO of the California News Publishers Association, which represents over 700 newspapers and online publications in the state, was less critical, but still not fully pleased with the outcome.
"We appreciate the effort to bring together resources from both the public and private sectors to support local journalism," he said. "However, we believe that the financial commitments from Google and other tech companies should have been more robust, given the substantial revenues they generate from the distribution of journalistic content."
Seven labor union leaders—including Media Guild of the West president Matt Pearce—jointly declared that "California's journalists do not consent to this shakedown," and sent the state Legislature a letter of opposition over what they described as an "undemocratic and secretive deal with one of the businesses destroying our industry."
Noting the union opposition, Society of Professional Journalists national president Ashanti Blaize-Hopkins said that "it is concerning that journalists appeared to lose their seat at the table as this initiative was negotiated."
"At the very least journalists should be deeply involved in how this plan will be rolled out, as it could potentially impact their livelihoods," Blaize-Hopkins added. "As other states study this effort for lessons on how to bolster local journalism, I hope California leaders will set an example that both centers and honors the input of working professionals who fight tirelessly to keep the public informed."
Lee Hepner, senior legal counsel at the American Economic Liberties Project, which backed the CJPA, said Tuesday—before the agreement was officially announced—that "this backroom deal is bad for journalists, publishers, and all Californians, which is why state lawmakers including Gov. Newsom should reject it and proceed through a transparent legislative process."
"The fact that a journalism preservation bill may be replaced with a Google-funded AI Accelerator is not just absurd policy, it's horrendous politics," Hepner continued. "That this AI deal is reportedly close to being finalized and we still don't know the details speaks volumes about who is driving the decision-making process in Sacramento—and it's not the journalists, publishers, or newsrooms who have had their industry hollowed out by Google's monopoly."
After the deal was set, Free Press Action co-CEO Jessica J. González, whose group opposed the CJPA, said that "we are disappointed in this outcome and this process. Good policy is made out in the open, where people can see and participate in the democratic process."
"This deal, meanwhile, was hammered out behind closed doors between media giants and tech platforms," she stressed. "While we're awaiting final details, it seems clear that the result is an agreement that fails to meet the needs of California's journalists and communities."
González continued:
While some newsrooms will benefit from this deal in the short term, the funding is far too meager, the time span far too short, the commitment to localism and diversity far too inadequate. Lawmakers must view this outcome as the first step in a much broader process to revive and transform local news, not as a viable long-term solution.
Local journalism that helps people understand what's happening in their communities and holds the powerful accountable is a public good. Local journalists, community publishers, public interest groups, labor unions, and grassroots advocates worked tirelessly to make this a priority issue for lawmakers.
"Going forward, we encourage lawmakers to continue working with these groups, look beyond short-term measures, and begin envisioning the kind of structural policy change that's needed to truly stabilize and transform our media system," she added. "That means putting community publishers, ethnic media outlets, and nonprofit newsrooms at the center of any legislative intervention. These entities are closest to their communities and are doing incredible work to plug critical information gaps."
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