Hello and happy Thursday. With 67 days until the election, I want to focus my attention today on Sacramento, which I am now calling “Googleville” because the company appears to have a disturbing amount of influence over state government.

Not to be confused with Whoville, where everyone was happy. We're not supposed to be happy.

I'm talking about the now-defunct Protect Journalism Act (AB 886), whose name is almost laughable when you consider how bad it was for the journalism and journalists it was meant to protect. But the secret deal to repeal it was great for Google, Meta, Amazon, and the big techs here. So there you have it.

Here's a number for you to remember: $42 million.

The founders of Google Sergey Brin earnsYes, every hour.

Let's get started, but hold your breath, it stinks.

The bill was negotiated behind closed doors

You may have heard recently about a proposed new public-private partnership between Google and states that is said to help protect the crumbling news industry from total ruin, and is touted as a promising alternative to two now-defunct bills that were under consideration in state legislatures.

Auckland Councillor Buffy Wicks AB886This allows companies like Google to pay newsrooms the revenue they make from placing ads next to their articles.

Sen. Steve Glaser (D-Orinda) was running. SB1327The bill further disliked tech companies by taxing Amazon, Meta and Google on the data they collect from consumers and creating a “data extraction mitigation fee” to be paid to news publishers, which Glaser said could bring $1 billion a year in revenue to the news industry.

Instead, after secret negotiations (led by Wicks with the help of former Senate Majority Leader Bob Hertzberg and involving the California Newspaper Publishers Association, of which this Newspaper is a member) with no public involvement (no hearings, no records, no transparency, and certainly no media coverage), a solution was reached that excited no one except Google.

There is no formal enforcement mechanism in place anyway, so it's essentially a handshake agreement.

That doesn't include money that you owe us, which will be formally incorporated into the budget starting at $30 million next year. Why are we asking the public to donate? More on that later.

But first, the official statement:

“This agreement will leverage the significant resources of the tech industry, ensure the survival of news organizations across California and strengthen local journalism without imposing new taxes on Californians,” Governor Gavin Newsom said in a statement whose disingenuousness made me sick.

“Not only will this agreement provide funding to support hundreds of new journalists, it will help rebuild a strong, dynamic California press for years to come and strengthen journalism's vital role in our democracy.”

Let me translate that: This deal does not provide anything close to the funding that is due or meaningful, and it will lead to further devastation of California's once vibrant press, setting journalism's vital role in our democracy on a downward slide until it is replaced by cheaper, less prying artificial intelligence.

But Newsom will likely be done with his term by then, and he's never shown any particular deference to California's press corps, so does it really matter?

So how did it happen?

To be fair, Newsom didn't seal the deal, but his public silence on the bill helped push the nonlegislative solution through to the final stage for three reasons.

• Newsom doesn't want to take on big tech, which means he didn't want either of these bills on his desk, which would have forced him to choose between signing them or being big tech's guy.
• With his term over and no other office in sight, Newsom has no plans to take on big tech companies.
• Newsom should be keeping a low profile and not upsetting Kamala Harris, but he doesn't want to take on big tech companies.

Wicks ended up starting negotiations on the third wheel. As Glazer said on X (formerly Twitter), she ended up “2% solution” “We're not going to pull independent news out of its death spiral.”

The introduction of the Glaser bill in the Senate and the Wicks bill in the House of Representatives put pressure on Google as well as Amazon and Meta. Both bills were untenable, but they had the support of some members of Congress (including several Republicans) and could have been passed by their sponsors' chambers or even the full Congress.

That momentum was both intimidating and influential: California could follow the lead of Canada and Australia, not only helping California journalists but setting a legal precedent that other states could follow.

In response, Google has threatened to do the same thing it did in Canada. Remove news from the platformSources familiar with the negotiations said the publisher's audience in California could shrink.

When reached for comment, Google pointed us to a blog post from April when the company was experimenting with link removal. At the time, Jaffer Zaidi, vice president of Global News Partnerships, wrote: Written “If passed, the CJPA could mean big changes to the services we can provide to Californians and the traffic we can provide to California publishers.”

There was also talk that the law could become embroiled in “years of litigation” if the bill passes, Wicks said.

So it was a good old game of chicken. With two weeks left in the Congressional session, tensions were beginning to grow on both sides. Who would change course first?

The answer is Wix.

“I really thought this was the best deal we could get,” she told me. “People might not be happy with the outcome of where it lands, but it would be a resource in the hands of the public.”

Ms. Wicks has been working on this case for two years, I have discussed the matter with her on a number of occasions, and I am sure she had good intentions.

As she told me, I don't believe politics is “the art of the possible.”

Because once you compromise where you can, you give up fighting for what's right.

What next?

Again, it's a handshake deal, with Google's funding dependent in part on state contributions, which must be approved by the Legislature each year.

So this is just a hope and a prayer for a little bit of profit. No memorandums have been signed. Who knows what will happen?

But Google plans to put $15 million into the journalism fund next year, plus $5 million toward artificial intelligence projects and $10 million directly to digital news media.

Over the next four years, Google will put $10 million into the fund and make $10 million in direct donations (it has already donated some of those funds), all to be administered through a new nonprofit housed at UC Berkeley.

That adds up to $250 million, or about six hours of income for Brin, and of course that only includes Google; other companies are exempt.

With all this in mind, I have three concerns about this deal.

• There is a lack of transparency. Legislative deals, especially those that impact our democracy, should not be done behind closed doors.
• This sets a bad precedent that governments need to pay to support journalism, rather than asking those who benefit from it to pay their fair share.
• This sets a bad precedent that Google and other tech companies are more powerful than governments.

Larger pond

So, is all lost?

The Senate was not satisfied with Wicks' agreement, and Senate President Pro Tempore Mike McGuire said in a statement that the Senate “will continue to work with all parties involved.”

Even industry insiders are divided. The CNPA, which sponsored Wicks' bill, supports the deal, calling it “the first step in what we hope will be a comprehensive program to sustain local news in the long term.”

The Western Media Union, which represents union journalists including at the Times, is vehemently opposed.

But one thing is clear: Google has shown just how powerful it is. Any action against these tech giants will likely come from the US government.

Sens. Amy Klobuchar (D-MN) and John Kennedy (R-LA) have been pushing legislation to compensate news publishers for years. Of course, the bill wouldn't get very far in the Republican-controlled House of Representatives. But that could change in November.

and This month's landmark ruling, A federal judge has decided “Google engaged in illegal conduct in its online search business to maintain its monopoly. This is the most significant ruling in previous antitrust cases.” Standard Oil or AT&T.

The Department of Justice may seek to break up the company, but Google will of course appeal, and the matter is far from resolved.

Still, “this victory against Google is a historic win for the American people,” Attorney General Merrick Garland said in a statement. “No company, no matter how large or powerful, is immune from the law.”

At least in California, that's a bit higher than the senators.

What else to read

Must Read: Democratic states far from the presidential battlegrounds could decide the course of Congress
Power Player: Zuckerberg's New Washington Game
LA Times SpecialColumn: Harris vs. Newsom fight is over, winner is clear, and governor's not happy

Stay golden,
Anita Chhabria

P.S.: Donald Trump has released a new collection of digital trading cards, priced at just $99 each. You can even pay with cryptocurrency. Awesome.

Check it out here, if you dare.

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