Google could cut funding for more US news publishers

After threatening to remove links to California media outlets due to a new bill in the state, Google may further reduce its investments in the sector. The tech giant told nonprofit newsrooms it could stop funding the Google News Initiative, which provides more than $300 million in funding to thousands of news outlets. according to a report from Axes.

Google issued the warning in response to another California bill with the aim of helping local media. If approved, the bill would charge a 7.25% tax whenever large companies like Google sell user information to advertisers. The money raised from this tax would fund tax credits for media outlets in the state.

Although this law only goes into effect in California, Google has reportedly warned media outlets that it could suspend new concessions across the country. Sources say Axes that Google is concerned about the possibility of setting a “broader precedent for other states.” Last month, Google tested removing links to California media outlets in response to the pending California Journalism Preservation Act (CJPA). This bill would make major tech platforms like Google and Meta pay to link to articles from California-based news publishers.

When contacted for comment, Google referred On the edge for a post the company made in April regarding the CPJA. At the time, Jaffer Zaidi, vice president of news partnerships at Google, wrote that the company is “pausing new investments in the California news ecosystem, including new partnerships through Google News Showcase, our product and licensing program for organizations of news, and planned expansions of the Google News Initiative.”

News publishers have long argued that big tech should pay them more for publishing links to their articles — and for good reason. A published working paper last year estimated that Google would owe publishers between $11.9 billion and $13.9 billion a year if the national law passed. Other countries that have enacted legislation designed to protect publishers, including Australia and Canada, have faced similar threats from Google. But the company finally reached an agreement to compensate the outlets in both countries.