According to the agreement, Google, the American tech giant, reached a global first-of-its-kind deal with California legislators on Wednesday (August 21), planning to provide $250 million in funding to news organizations across California, while also avoiding a state bill that could have caused greater losses.

Under the agreement, Google and the California government have committed to providing $250 million over five years, with $180 million to be used to fund California's news media, and the remaining $70 million to launch an artificial intelligence accelerator aimed at supporting journalists' work.

As part of the support for the news industry, Google will donate $15 million to the news fund in the first year, while the state government will invest $30 million. In the following four years, California's donation will decrease to $10 million per year, while Google will donate at least $20 million to the fund and existing news projects.

In addition, Google will invest $70 million to fund an artificial intelligence research program to help improve the efficiency of news workers.

A state bill has been shelved.

The legislation that has been replaced by this agreement is called the California News Protection Act (CJPA). This legislation would mean a bigger bill for Google.

The bill was initiated by state representative Buffy Wicks, modeled after similar laws implemented in Australia and Canada, to provide funding for local news organizations.

According to this proposed legislation, tech giants will be forced to pay link fees to local publishers for the display rights to their news content, equivalent to imposing a "link tax". It is estimated that if this bill is passed, California will require tech companies such as Google and Meta to pay $13.9 billion to their publishers annually.

Obviously, the proposed funds in the agreement and the potential amounts required by the bill are far apart, which has prompted protests from journalists and other media industry experts, calling this agreement "disastrous", with the major beneficiaries still being these tech giants.

Critics argue that Google's proposal is simply a way to avoid this potential bill, which these critics refer to as a "textbook political strategy".

Opposing voices

In recent years, with the collapse of traditional business models and the depletion of advertising revenue in the digital age, American news publishers have been in a long-term decline. The main audience has also quickly moved away from traditional publications, leading to widespread layoffs among many publishers, some even going bankrupt.

Victor Pickard, a professor of media policy and political economy at the University of Pennsylvania, pointed out that by suspending the California News Preservation Act, the state is effectively giving up on a possible avenue that could require Google and other social media platforms to continue paying fees to news content publishers.

Pickard also pointed out that the new agreement means that "Google can easily escape".

Industry organizations such as the Media Guild of the West and the NewsGuild-CWA wrote in a joint statement, "The future of the news industry should not be decided behind closed doors."

The agreement has also faced opposition from some officials in the California legislature, including state Senator Steve Glazer, who pointed out, "Despite good intentions from all parties involved, this agreement does not provide enough resources for independent news gatherers in California to escape the threat."

California Senate Temporary Majority Leader Mike McGuire also criticized the deal,

In a statement, he wrote, "While the news media in California is being hollowed out, technology platforms are making billions of dollars in profits. We are concerned that this proposal does not provide sufficient funding for newspapers and local media, nor does it fully address the inequality issues facing the news industry."