A controversial deal between Google and California lawmakers over funding for local news organizations has been heavily panned by critics, with one major journalists union slamming the deal as a “blackmail” that would be “devastating” for the industry.
The deal, billed as a “first-of-the-nation partnership” to help cash-strapped publishers and protect jobs, would allow Google and other big tech companies to avoid bills aimed at solving the problem, such as one that would require them to pay a portion of advertising revenue to news organizations.
The deal drew outrage from the Western Media Union and state Democrats, who said the local news publisher trade group, California Assemblywoman Buffy Wicks, Gov. Gavin Newsom and others who brokered the deal gave Google and its allies a run for their money.
“California journalists and media workers oppose this disastrous deal with Google and condemn the news executives who agree to it in our name,” the Western Media Union said in a statement.
“Publishers who claim to represent our industry are celebrating an opaque deal that involves taxpayer funds, a vague AI accelerator project that could devastate journalism jobs, and minimal financial commitments from Google to return the wealth the monopoly has stolen from our newsrooms,” the union added.
The deal includes roughly $250 million in funding over five years, with $110 million coming from Google, $70 million from state taxpayers and the remaining $70 million going to so-called “AI accelerator” nonprofits to develop tools for newsrooms. Politico reported.
Newsom called the agreement “a major step forward in ensuring the survival of news organizations,” while Wicks said it “demonstrates a cross-industry commitment to supporting a free and vibrant press.”
The California Newspaper Publishers Association said the deal is “the first step in what we hope will be a comprehensive program to sustain local news in the long term, one that we will work to grow in the coming years.”
Some California Democrats criticized the deal, with state Sen. Steve Glaser saying Google’s proposal was “woefully inadequate” and “severely undermining our efforts toward a long-term solution.”
Glaser noted that Mehta, which threatened last year to remove news articles from Facebook and Instagram users in California if the bill passed, was not involved in the deal.
Meanwhile, State Senate President Pro Tempore Mike McGuire highlighted his “concerns that the proposal underfunds newspapers and local media and does not adequately address the inequities facing our industry.”
A press release announcing the partnership by Wicks listed Google parent Alphabet and OpenAI as participants, though the scope of OpenAI’s involvement was not immediately clear.
Meta and OpenAI did not immediately respond to requests for comment.
“This public-private partnership builds on our long history of working with home state journalism and local news ecosystems while fostering a national center of excellence on AI policy,” Kent Walker, Alphabet’s president of global affairs, said in a statement.
Google has actively lobbied against state laws aimed at ensuring compensation for publishers, at one point going so far as to block some California news links within its search engine.
The company made $307 billion from digital advertising last year alone. Earlier this month, a federal court ruled that Google is a “monopoly” that illegally dominates the online search market.
The News Media Alliance, a nonprofit group that represents more than 2,200 publishers, including The Washington Post, said the agreement “reinforces the need for federal legislation and court remedies to address this broken market.”
“Google is a monopoly that makes huge profits from scraping and repackaging quality news content, depriving publishers of the opportunity to monetize their content and reinvest in journalists,” News Media Alliance CEO Daniel Coffey said in a statement.
