Will Google cut a deal with California news media to fund journalism?

SACRAMENTO —  California news publishers and Big Tech companies appear to be inching toward compromise on a controversial bill that would require Google and huge social media platforms to pay news outlets for the articles they distribute.

After stalling last year, Assembly Bill 886 cleared a critical hurdle Tuesday when it passed the state Senate Judiciary Committee. Several lawmakers described the legislation as a work in progress aimed at solving a critical problem: The news business is shrinking as technology changes the way people consume information.

“I do believe the marketplace is the best mechanism to regulate industry,” Sen. Tom Umberg (D-Orange), the committee chairman, said during a hearing on the bill.

However, he said, the demise of journalism harms democracy: “Thus, we have an obligation to find a way to support reasonable, credible journalism.”

The legislation, known as the “California Journalism Preservation Act,” would require digital platforms to pay news outlets a fee when they sell advertising alongside news content. It calls for creating a fund that the tech firms pay into, with the money being distributed to news outlets based on the number of journalists they employ. Publishers would have to use 70% of the money they receive to pay journalists in California.

Umberg noted that the bill does not specify an amount for the fund. He said it would be “a very elegant solution” for the parties involved to agree on what amount that should be.

Sen. Henry Stern (D-Calabasas) described talks as being “closer and closer to the place where we could actually land some kind of deal.”

In Canada, Google is paying $74 million annually into a fund for the news industry under a law similar to the one proposed in California.

Jaffer Zaidi, Google’s vice president of global news partnerships, testified against the California proposal during a hearing in which news executives from across the state lined up to express support for the bill, while tech industry lobbyists lined up in opposition. The bill is sponsored by the California News Publishers Assn., of which the Los Angeles Times is a member.

“The bill would … break the fundamental and foundational principles of the open internet, forcing platforms to pay publishers for sending valuable free traffic to them,” Zaidi said.

“It puts the full burden of support on one or two companies, while shielding many other large platforms who also link to news from California publishers.”

He said Google had shared a proposal for a different way to support journalism “through targeted programs” that would be funded by more companies than just the very largest platforms. The current version of the bill would apply only to Google and Meta, the parent company of Instagram and Facebook.

“We hope this can serve as a basis for a workable path forward together,” Zaidi said. “We remain committed to being here and constructively working towards an outcome.”

The bill’s author, Assemblymember Buffy Wicks (D-Oakland), said she is “aggressively trying to engage” with companies that oppose the bill in the hopes that the sparring sides can reach an agreement that will allow the news industry to thrive.

“At the end of the day, I want the best solution to the problem,” Wicks said.

She closed the hearing by talking about the role journalism has played in exposing problems that lawmakers wind up addressing in the Capitol, such as crafting new laws to extend the statute of limitations for sexual abuse lawsuits after The Times’ investigation revealed a pattern of allegations against former USC gynecologist George Tyndall.

The bill now advances to the Senate Appropriations Committee. It will go to Gov. Gavin Newsom if it clears both houses of the Legislature by Aug. 31.