More US news publishers may face funding cuts from Google

Google Threatens to Cut Funding to News Outlets in Response to California Bill

In a bold move that could have far-reaching consequences for the news industry, Google has warned nonprofit newsrooms that it may halt funding to the Google News Initiative. This initiative provides over $300 million in funding to thousands of news outlets across the country.

The tech giant issued this warning in response to a new bill in California that aims to help local news outlets. The bill would impose a 7.25 percent tax on large companies like Google whenever they sell user information to advertisers. The revenue generated from this tax would then be used to provide tax credits to news outlets in the state.

While this law would only impact California, Google has reportedly cautioned outlets that it could pause new grants nationwide. Sources indicate that Google is worried about the precedent this could set for other states. This comes after Google recently tested removing links to California news outlets in response to the pending California Journalism Preservation Act.

When asked for comment, Google referred to a post made in April about the CJPA. In the post, Jaffer Zaidi, Google’s vice president of news partnerships, stated that the company is pausing further investments in the California news ecosystem.

News publishers have long argued that big tech companies should pay them more for publishing links to their articles. A recent working paper estimated that Google could owe publishers billions of dollars per year if a nationwide law were to be passed. Similar disputes have arisen in other countries, such as Australia and Canada, but Google ultimately reached agreements to compensate outlets in those regions.

The outcome of this standoff between Google and news outlets remains uncertain, but it highlights the ongoing struggle between tech giants and traditional media organizations.