Editorial: Legislature must act to support local news

It may seem overly dramatic to say that democracy hangs in the balance, but it does.

The local news business has been struggling for well over a decade as search and social have siphoned audience and revenue away from traditional publishers by redistributing the content of those publishers and selling their own advertising against that content.

That’s not fair, and it’s definitely not fair use.

But somehow, it’s still up for debate.

And to that end, the state Senate Judiciary Committee is holding a hearing Tuesday on the California Journalism Preservation Act, a bill that would require Google and Facebook to reimburse news publishers for use of their content on their platforms and sites.

To some, it may sound outlandish to suggest that search and social media companies should be expected to pay for the content they distribute. Google and Facebook and their parent companies Alphabet and Meta certainly think so and they’ve deployed legions of lobbyists and lawyers to make that case.

But it’s not outlandish.

Companies like Xfinity and DirecTV don’t get to distribute premium TV for free. Why should Google and Facebook be allowed to pirate local news?

Google and Facebook contend they are platforms, not publishers, and that they send traffic to publishers. They describe demands that they should pay for news content as “link taxes.”

But that’s balderdash.

Research shows, for example, that in 2020  nearly 65% of Google searches ended without a click. That number is on the rise, and anyone who uses Google can see how that’s true. Google increasingly loads the top of a search page with summaries and other possible searches that are obviously intended to keep users in Google’s house, where Google reaps the revenue from their attention.

But don’t take our word for it.

A recent study conducted by the Brattle Group – a research and consulting firm that studies economic, financial and regulatory issues – found that Google and Meta owe local news publishers between $12 billion and $14 billion a year for the news content they deliver on their respective sites.

Two of the authors of the Brattle study summarized its findings neatly:

“Unsurprisingly, by keeping the cost of goods (in this case, news) down, Google and Meta have grown rich off the advertising revenue they reap from attracting the world’s eyeballs to their sites. Meanwhile, news deserts have become a global problem as outlets struggle with the loss of revenue.”

Other countries not only know this, but have already acted upon it.

In Australia, new legislation requires Google and Facebook to bargain with news media providers and  stipulates that if there is an impasse, both sides must make a proposal and an arbitrator will make the final decision. This legislation has resulted in Google and Facebook paying nearly $140 million to Australian news publishers, including small publishers.

Lawmakers in Canada passed their own legislation, and just last week Google agreed to pay Canadian publishers more than $70 million a year.

The precedent is clearly established.

So what does this have to do with democracy?

Credible news — a shared set of facts and commonly accepted truths — is the cornerstone of a well-informed citizenry, the foundation upon which our republic was founded. More importantly, a free press ensures that government is accountable to the people it serves.

Google and Facebook are not the free press.

They are exploiting the free press.

It’s shameful that the United States, the global champion of democracy, should allow it to be so fundamentally undermined.

California’s state Assembly did the right thing when it passed legislation for California in June to address this drastic power imbalance with an overwhelming 55-6 bipartisan vote. But the Senate Judiciary Committee, chaired by state Sen. Tom Umberg, postponed consideration of the bill until next year, promising to hold a hearing to examine the issues this fall. That hearing is Tuesday in Southern California.

Here is an opportunity for California to carry the fire and lead the way.

Written by the Southern California News Group editorial board.