Business

Why Google's lobbying in California skyrocketed this year

Published

1 year ago

December 19, 2023

Why Google's lobbying in California skyrocketed this year

The 30-second video ad struck an ominous tone, urging Californians to tell their lawmakers to vote against legislation that would force Google, Facebook and other large platforms to pay news publishers.

“It’s a dangerous precedent that will drive up costs for small businesses and make it easier for politicians to raise taxes in the future,” the narrator says in the ad, which ran in June. “With inflation running high, we can’t afford another Sacramento tax increase.”

The ad stated that it was “paid for” by the California Taxpayers Assn., a nonprofit advocacy group, but it really was bankrolled by Google.

Between April and June, the search giant paid the association $1.2 million for advertising, filings to the California secretary of State show. The association confirmed that Google funded the ad campaign against the bill.

Tech companies strongly opposed Assembly Bill 886, known as the California Journalism Preservation Act.

The money appears to have been well spent. Lawmakers put the legislation on hold until 2024.

Google’s payment to the taxpayers group made up most of the record $1.5 million the company spent lobbying California lawmakers and regulators from January to September. During the same period last year, Google spent $187,434. The company spends an average of about $257,000 per year lobbying in California, according to a review of such expenditures from 2005 to 2022.

The massive surge reflects the growing efforts by tech companies to influence California lawmakers as they debate how to protect young people and journalists and other workers from the threats posed by social media sites, artificial intelligence and other emerging technology.

Bob Shrum, a longtime Democratic consultant and director of the Center for the Political Future at the University of Southern California, said political ads are one way companies try to sway lawmakers, but the strategy is not always effective.

Shrum, who listened to the California Taxpayers Assn. ad, said viewers might walk away with the impression that the price of their internet service will go up.

“They skirt the line of being factual,” he said. “At the same time, the ad is anything but a rounded, accurate portrait of what the controversy is all about.”

Google’s spending on lobbying in California outpaced that of Facebook parent company Meta, Amazon, Apple, and other multibillion-dollar companies, data from the California secretary of State show. The search giant’s lobbying spending lagged behind AT&T, Waymo (Google’s self-driving car unit) and McDonald’s, as well as major energy companies like Chevron.

Google’s lobbying efforts went beyond advertising. On June 28, California Gov. Gavin Newsom and two of his top staff members met with Google leaders at the company’s San Francisco office, according to filings to the secretary of State’s office.

A Google representative said the meeting was about the overall legislative landscape; Newsom’s office said it was related to an executive order about artificial intelligence that he went on to sign in September.

State Sen. Ben Allen (D-Santa Monica) also met with Google, the filings showed. Allen’s office said the senator and a legislative director who works on environmental policy toured the tech giant’s Mountain View campus in April to learn about sustainability and waste reduction.

“We regularly engage with lawmakers and regulators on a range of issues, including economic growth, small business support, cybersecurity and protecting online information, among other issues,” Bailey Tomson, a spokesperson for Google, said in a statement.

The company lobbied on a variety of bills during the last legislative session, including measures barring law enforcement demands for Google location data, protecting child safety on social media and regulating artificial intelligence.

One of the company’s biggest priorities: fighting a bill that would require tech giants to negotiate payment to news organizations for stories displayed on their platforms. The online platforms would pay a “journalism usage fee” to certain publishers.

Organizations that support the bill said it would help preserve democracy by funding local news outlets, which are grappling with drastic cuts and layoffs as they compete with tech companies for advertising dollars. Tech companies should pay publishers because they profit from their news content, helping to keep people engaged on their platforms, news advocacy groups such as the California News Publishers Assn. and News/Media Alliance say. (The Los Angeles Times is a member of both organizations and supports the proposed legislation.)

Meta spokesperson Andy Stone said in May that the bill would mostly benefit large publishers. The legislation “fails to recognize that publishers and broadcasters put their content on our platform themselves and that substantial consolidation in California’s local news industry came over 15 years ago, well before Facebook was widely used,” Stone tweeted.

Meta threatened to remove news from its platforms Facebook and Instagram if the California bill becomes law, a move the social media giant used in other countries that passed similar legislation. In 2021, Meta temporarily blocked news in Australia but reversed the decision after reaching a deal with the Australian government. In August, Meta blocked news in Canada.

Debate about AB 886 has continued since the legislative session wrapped in September. On Dec. 5, the California Senate Judiciary Committee held a four-hour hearing about the importance of journalism in the digital age. Chris Argentieri, president and chief operating officer of the L.A. Times, and Matt Pearce, a Times reporter and chair of Media Guild of the West, testified in support of the legislation.

California Assemblymember Buffy Wicks at the Capitol in Sacramento

At the hearing, Google Vice President of News Richard Gingras said the search engine helps drive traffic to digital publications and noted that the company also supports journalism in other ways, such as the Google News Initiative, which provides funding, resources and training.

“A link tax as proven elsewhere would be counterproductive, making it more difficult for users to find diverse sources of news, reducing the opportunity for news publishers to build new audiences and making it harder for Google to direct users to helpful content,” Gingras told lawmakers.

The insinuation that payments to news organizations in California would be a new tax has been a pivotal part of video ads against the Journalism Preservation Act. Political ads against AB 886, including the one aired by the California Taxpayers Assn., ran in June and July, when the bill faced a critical deadline in the Senate Judiciary Committee, data from Meta’s ad library show.

Advocacy group News/Media Alliance, which supports AB 886, pushed back against the ads’ claim that lawmakers are trying to impose a tax on tech companies.

“They distort reality, and they do a good job of it, because Google is a massive company with endless resources to be able to spend on creating messaging that’s false,” said Danielle Coffey, president and chief operating operator of the organization.

The California News Publishers Assn. and News/Media Alliance spent $161,519 on lobbying in California from January to September — far less than tech companies spent.

David Kline, a spokesperson for the California Taxpayers Assn., said ads are just one tool lobbyists use if legislation is moving quickly and they need to get the word out to a lot of people. The association’s ad against AB 886 has racked up 2.1 million views on Google-owned YouTube.

“It’s a giant state, where advertising is your only realistic option for doing that, and just by the nature of it, advertising is expensive,” he said. The taxpayers group wasn’t representing only Google but also other members that had concerns about the bill, he added.

Google and Meta are members of the Computer & Communications Industry Assn., which also ran ads against AB 886. From January to September, the trade group spent $1.3 million on lobbying, filings to the secretary of State’s office show.

Matt Schruers, president of the association, said the majority of the spending was related to political advertising.

Lawmakers’ decision to put the bill on hold until next year “is an acknowledgment of the fact that there are serious issues with the proposal and concerns that have yet to be resolved,” Schruers said.

Assemblymember Buffy Wicks (D-Oakland), who sponsored the bill, said political ads are a common strategy in Sacramento, especially by billion-dollar companies. Lawmakers put the bill on hold because it’s important that they get it done “right” rather than quickly, she said.

The extra time also allows lawmakers to see how similar legislation plays out in Canada, she said. Google, after threatening to block news in Canada, struck a deal with the Canadian government in November to pay news businesses $73.5 million annually to comply with a new law that requires tech platforms to pay publishers.

Wicks refuted the idea that the bill would impose a new tax, noting that there’s a different legislative process for tax increases, and it would require more votes.

“When you put out disingenuous ads like that, I assume some members got calls, but I think most members are savvy enough to know it’s just simply not a tax,” she said.

News advocacy groups also used advertising to increase support for the bill, but compared to tech industry spending, it’s “ a drop in the bucket,” Coffey said.

Ads from such groups that ran in October and November on Facebook included the face of Sen. Tom Umberg (D-Orange), the chair of the Senate Judiciary Committee.

“Sen. Tom Umberg has the opportunity to be the hero our democracy needs,” one ad by the California News Publishers Assn. says.

Umberg said he doesn’t spend a lot of time on social media and doesn’t recall seeing the ads. He said the legislation is complex, and he has concerns about how the bill would be enforced, along with its impact on minority groups and local publications, which is why lawmakers put it on hold.

He remains optimistic, though, that the bill will reach the finish line next year, and tech platforms will have “some of their skin in the game.”

“It is my view that there’s going to be a piece of legislation that’s going to get to the governor’s desk that is going to address the issue of the symbiotic relationship between social media and credible journalism,” Umberg said.

Business

The Stock Market’s Boomerang Month Has Put Investors in a Bind

Published

8 hours ago

May 13, 2025

Press Room

The Stock Market’s Boomerang Month Has Put Investors in a Bind

The stock market is now higher than before President Trump’s broad and steep tariffs sent share prices into a tailspin. The 10-year government bond yield is now largely in line with where it started the year. On Tuesday, a widely watched measure of inflation nudged lower.

Judging from a snapshot of today’s financial markets, it would be easy to conclude that very little had happened over the last four and a half months.

As the administration has dialed down its trade offensive, delaying the worst of the tariffs announced on April 2 and promoting a long list of trade deals in the works, stocks have risen and the unnerving volatility in the government bond market — which Mr. Trump noted when he first began pausing his tariffs — has subsided.

On Tuesday, the latest reading of the Consumer Price Index showed a slower pace of inflation in April than economists had predicted, despite widespread concerns that tariffs could have sped up price increases.

The S&P 500, which came close to hitting a bear market early last month, is now up slightly since the start of the year, after a 0.7 percent gain on Tuesday.

Still, investors remained cautious, and complain that the outlook remains uncertain, with little clarity on what the final level of tariffs will be.

That leaves them in a tricky position, with many saying they have little conviction as to where the economy is headed but they cannot afford to wait on the sidelines and miss out on the possibility that tariffs will be lowered further and stocks will rise.

In the meantime, investors are still trying to parse how the tariffs that remain in place — including 30 percent tariffs on many Chinese imports — are affecting consumer spending and corporate profits

John Kerschner, a portfolio manager at Janus Henderson, said signs of tariff-fueled inflation are not likely to show up in the economic data for months.

“The market will wait with bated breath for those readings to make a determination of where we actually stand on tariff induced rising prices. Thus, market uncertainty will likely remain elevated,” Mr. Kerschner said.

The Federal Reserve is also in a wait-and-see mode, unwilling to keep lowering interest rates before the inflationary effect of the new tariffs is known. That’s because lower interest rates stimulate the economy and could add a further tailwind to inflation.

Market bets on when the Fed will next lower interest rates have gradually been pushed further out. At the start of this year, investors were anticipating that the Fed would lower interest rates at its meeting last week. Now, investors expect the first rate cut of the year to arrive at the September meeting.

Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management said the lower than expected reading in the Consumer Price Index on Tuesday “doesn’t mean tariffs aren’t impacting the economy, it just means they aren’t showing up in the data yet.”

“Wait-and-see is still the name of the game, and until that changes, the Fed will remain on the sidelines,” she added.

The longer uncertainty prevails, the more it becomes its own economic force, separate from the tariffs. Uncertainty means businesses hold off on making investment decisions and consumers pull back from spending, slowing economic growth.

Beneath the surface, that concern is still evident in the markets.

The Russell 2000 index of smaller companies, which are more at risk from a downturn in the economy, has risen from its lows, but remains 14 percent lower than its peak in November. The S&P 500 is only 4 percent below its February high.

The lowest-rated corporate debt continues to show some signs of strain.

Then there is the dollar, which has sent the most pointed signal of concern about tariffs. The dollar index, which measures the currency against a basket of its peers, has fallen 6.9 percent so far this year.

That is the dollar’s biggest slide since the end of 2022, when the Fed pivoted from raising interest rates, which had strengthened the dollar, to holding them steady.

But even now, as tariffs have de-escalated, the dollar has regained ground.

“As far as markets are concerned, there’s now a belief that the worst of the trade war has passed, and that the trend is now towards de-escalation,” noted analysts at Deutsche Bank said in a recent research note. But they also warned, “The U.S. is not out of the woods yet.”

Business

Google settles lawsuit alleging bias against Black employees

Published

10 hours ago

May 13, 2025

Press Room

Google settles lawsuit alleging bias against Black employees

Google agreed to pay $50 million to settle a lawsuit alleging the search engine giant was racially biased against Black employees.

The settlement, which was reached after mediation and certified by a U.S. District Court judge in Oakland on Friday, covers some 4,000 Google employees in California and New York.

The original lawsuit came after a state agency, now known as the California Civil Rights Department, in 2021 began investigating Google’s treatment of Black female workers.

In 2022, former Google worker April Curley filed a lawsuit in federal court in San Jose alleging that she and other Black workers experienced systemic discrimination.

Curley, who worked at Google for six years, had been hired to conduct outreach and design recruiting programs with historically Black colleges.

However, her experience at the company quickly soured, she said, alleging that she was stereotyped as an “angry” Black woman, that she and other Black women had not been allowed to present during important meetings and that she was wrongfully terminated in 2020 after challenging internal practices.

Black workers were hired to lower-level jobs, paid lower wages, subjected to hostile comments and denied promotions, Curley and other Black workers who joined the proposed class-action alleged in their lawsuit.
The complaint said managers disparaged Black employees for not being “Googley” enough, comments the plaintiffs said served as racist dog whistles.

Throughout the litigation, the Mountain View-based company has maintained that it did not violate any laws.

“We’ve reached an agreement that involves no admission of wrongdoing. We strongly disagree with the allegations that we treated anyone improperly and we remain committed to paying, hiring, and leveling all employees consistently,” Google spokesperson Courtenay Mencini said in a statement Tuesday.

In addition to the monetary payout, Google has agreed in the settlement to analyze pay and correct differences based on race for the next three years. The company has also committed to maintaining transparent salary ranges and methods for employees to report concerns about pay or other practices.

And through August 2026, the company will not require employees to enter into mandatory arbitration for employment-related disputes, according to the settlement agreement filed last week in federal court.

Business

Tariff Misery in Japan: Honda and Nissan Forecast Plunges in Profit

Published

1 day ago

May 13, 2025

Press Room

Tariff Misery in Japan: Honda and Nissan Forecast Plunges in Profit

President Trump’s decision to negotiate a break for China on tariffs is galling for Japan, which is reeling from auto sector levies that the White House has shown no sign of willingness to lift.

Japan, a top U.S. ally in Asia, was eager to advance trade negotiations with Washington, even as Mr. Trump imposed tariffs on automobiles, and threatened an across-the-board 24 percent tariff on Japanese goods.

While Beijing and others assembled plans for retaliatory tariffs, Japan rushed to Washington for trade negotiations, armed instead with commitments to buy more American goods and boost investments in the United States to $1 trillion.

Now in Tokyo, the sting is palpable.

On Tuesday — one day after the Trump administration agreed to temporarily nix most of its tariffs on China — two of Japan’s top automakers issued dire profit forecasts, weighed down by the effects of U.S. car tariffs.

Honda Motor said that its operating profit would fall nearly 60 percent for the fiscal year that began in April. It attributed the downgrade to a whopping $4.4 billion hit from tariffs.

Nissan Motor suspended its profit forecast for the current year, and said that it would likely swing to an operating loss in the first quarter. The automaker, which was already restructuring its global operations before the U.S. tariffs, said it would slash an additional 11,000 jobs on top of the 9,000 cuts it announced in November.

In Japan there is a sense of disbelief and indignation among business leaders and government officials that the Trump administration backed down on China tariffs, while maintaining punishing levies on allies like Japan with significantly smaller trade imbalances.

The fact that the U.S. prioritized China over many other trade partners in reaching a tariff agreement showed that “at this stage, allies like Japan are at a disadvantage,” said Kazuhiro Maeshima, a professor of American politics and diplomacy at Sophia University in Tokyo. “This can only be seen as disregard,” he said.

Earlier this month, a 25 percent U.S. tariff on vehicle imports was extended to cover auto parts as well. Those two levies are particularly painful for Japan because automobiles and car parts are by far its biggest export to the United States.

Economists estimate that the higher auto tariffs alone could put a big dent in economic growth in Japan this year. Factoring in broader disruptions from U.S. tariff policy, officials have predicted that growth could be more than halved.

That is because the auto sector is the backbone of Japanese industry. Nissan has already planned to shift some manufacturing to the United States to skirt tariffs, and if such moves are replicated by others, it could spark a broader hollowing out of industrial production in Japan.

Japan’s biggest automaker, Toyota Motor, said last week that while it aimed to protect production and jobs in Japan, U.S. tariffs would likely cost it more than $1 billion in April and May alone.

Honda’s chief executive, Toshihiro Mibe, said on Tuesday that the company plans to expand manufacturing in the United States to try to recover some of the billions of dollars of tariff losses it forecast. That includes moving some domestic production of its hybrid Civic to a factory it operates in Indiana, he said.

Japan is also negotiating with the United States regarding the proposed 24 percent “reciprocal” tariff, which the Trump administration announced last month and then delayed until early July. The next round of trade talks is expected later this month, but progress has stalled.

Japan has said lower tariffs on cars are a necessary condition of any trade deal, a position that Prime Minister Shigeru Ishiba reiterated in parliament on Monday.