Opposition to California Journalism Preservation Act of 2023

4 July 2023

An Open Letter to California Senate Judiciary Committee

Dear Chairman Umberg, Vice Chairman Wilk, and members of the Committee:

On behalf of the Internet Society^[1], we write to express our strong concern that the California Journalism Preservation Act (CJPA) would cause significant damage to the open nature of the Internet by fragmenting people and businesses in the United States from their ability to use basic functions of the Internet meant for everyone. Doing so will give people and businesses in California less access to the Internet than other jurisdictions, reinforce the market power of big players, and hinder California’s leadership as a hub for digital innovation. It could also significantly hinder security and privacy for millions of people and businesses across the United States.

Journalism is critical to the distribution of information online and the function of democratic societies. However, the challenges of traditional and digital media companies to adapt their business models alongside the evolution of Internet are not new. While considering ways to support journalism is important, it is irresponsible to do so at the cost of splintering people and businesses away from an open, globally connected, secure, and trustworthy Internet. It is also dangerous to do so in a way that could discourage businesses from using the strongest Internet security technologies in order to comply with the Act.

Trying to save journalism by harming the foundation of an open and secure Internet will not only deprive people and businesses in California and across the United States from the full benefits of the greatest communications resource of all time. It would also create massive barriers to entry, growth, and innovation in California’s tech sector, and solidify the dominance of large players while undercutting existing journalism financial support opportunities and initiatives. Furthermore, CJPA’s lack of clarity on whether its compensation scheme applies to private messaging services could also significantly hinder security and privacy online by preventing platforms from using strong encryption to track the usage of news links online.

CJPA Leads to Internet Fragmentation

The Internet Society’s key concern with CJPA is that it centralizes management of Internet functions by placing conditions and restrictions on how people and businesses can use and share links to news content. In doing so, it significantly undermines at least one of the five critical properties of the Internet Way of Networking (IWN)^[^2] the Internet needs to exist in the first place: decentralized management and a single distributed routing system. IWN critical properties are a description of the necessary attributes that allow independent networks to connect to one another and, all together, form the global Internet. When the IWN is under threat, so are the opportunities it offers.

Any restriction that prevents people from freely using links, or URLs, is a direct contradiction to the open, globally connected principles of the Internet. Despite the bill’s provision to try prevent covered platforms from engaging in retaliatory content or website blocking, it is highly likely that platforms will find ways to block access to news content for people in California. They may also choose to change their business model altogether. Meta and Google chose to change their business models to avoid becoming covered entities under Canada’s Online News Act. It is likely that many businesses will follow that lead should the CJPA become law. This is but one example of how CJPA’s Internet fragmentation would lead to a future in which California would have less access to the global Internet than everyone else in the world.

The harm CJPA would inflict on the IWN, and hence splinter people and businesses across the country away from an open, globally connected Internet, would directly contradict the United States’ leadership to resist fragmentation. This includes its promise as part of its Declaration for the Future of the Internet^[^3], as well as in a recent G7 Ministerial Declaration commitment to “the protection and promotion of one global, unfragmented Internet” and opposition to “any intention and action toward Internet fragmentation”^[4]. In doing so, CJPA will reinforce the market power of large players, hinder California’s digital economy, and deprive people and businesses across the United States from full access to a truly global resource that is both crucial to our daily lives and relevant to our evolving needs online.

Impact of CJPA on People, Businesses, and Innovation Online

Canada’s Online News Act, which is similar in principle to the CJPA’s aim to save journalism by forcing platforms to compensate news providers for linking to their content online, provides an early but important case study of the tangible impact of Internet fragmentation on people, businesses, and the digital economy.

The Internet Society’s Internet impact assessment on the Online News Act^[5] warned of how the Act would undermine its own goal of supporting journalism by solidifying the market power of big players, restricting people and businesses in Canada from innovation online, and preventing the free flow of information online. Within the same month the Online News Act became law:

Google^[6] and Meta^[7] confirmed they would end services in which they make news sharing available to Canadians, and wind down existing deals with publishers and other initiatives that provide financial support to journalism support initiatives^[8].
Two media industry giants, NordStar Capital LP and Postmedia Network Canada Corp, announced they are in talks of a merger.^[9]
Bell Canada Enterprises Inc. cut 1,300 positions, including six per cent of its media arm.

The financial implications for Canada’s economy, including to the media outlets that rely on active and free distribution of their content on social platforms to drive viewers to their sites, are projected to be massive.

Given California is home to many large platforms, budding startups, and small and medium sized technology companies, the provisions in the CJPA are likely to have an even more significant impact on people, businesses, and the economy in California and the United States. This includes:

Reinforcing the market power of big players and stifling innovation: CJPA will reinforce the market power of big platforms in two ways. First, it establishes measures only big platforms can afford to comply with, provided they don’t decide to discontinue the service. Second, it will reduce competition by discouraging new players from growing lest they become subject to regulation. At the same time, CJPA will hinder California’s digital economy by encouraging businesses to consider moving operations to jurisdictions with more favorable regulatory frameworks.
Restricting the free flow of journalistic content in the United States: Platforms that want to avoid becoming a covered entity under this law may choose to stop offering news-related sharing services completely to avoid the penalty of non-compliance. People in the United States, such as students, researchers, lawyers, and ordinary citizens will be restricted from ways to discover and share news content on these services, despite its availability to people in other parts of the world.
Hindering investment in journalism: It is very likely that platforms could follow Meta and Google’s recent decisions in Canada to stop news sharing services and existing deals with publishers. CJPA will not only fail to force platforms to compensate for news links, but it will also lead to platforms stopping existing deals with publishers and funding to journalistic initiatives, and thus interrupting hundreds of thousands of dollars to news organizations, which will result in more layoffs.
Promote the spread of misinformation online: The more platforms choose to stop offering news sharing functions, the more people seeking information on these services may be exposed to content spreading misinformation that could flourish in the absence of traditional journalism.

Conclusion

The CJPA’s goal to support journalism is an important one; however, it is unworkable to do so at the cost of splintering people and businesses in California and the United States from the greatest communications resource of all time: the Internet. Canada’s Online News Act provides a disturbing glimpse of the tangible impact of harming the Internet in Canada, preventing people from access to news, reinforcing the market power of big players (both platforms and news companies), and reducing jobs and investment into a news industry already in sharp decline.

To mitigate the risks of Internet fragmentation and further harm to the journalism sector, the Internet Society calls on the California Senate Judiciary Committee to reject the current version of the CJPA and undertake a full Internet Impact Assessment to mitigate risks prior to reconsideration.

Sincerely,

Natalie J. Campbell, Senior Director, North American Government and Regulatory Affairs, Internet Society

John B. Morris, Jr., Principal, U.S. Internet Policy & Advocacy, Internet Society

Footnotes:

[1] Founded in 1992, the Internet Society is a U.S. non-profit organization headquartered in Reston, Virginia and Geneva, Switzerland for the world-wide coordination of, and collaboration on, Internet issues, standards, and applications. As a global non-governmental organization, the Internet Society believes that the Internet should be for everyone. It supports and promotes the development of the Internet as a global technical infrastructure, a resource to enrich people’s lives, and a force for good in society, with an overarching goal that the Internet be open, globally connected, secure, and trustworthy. The Internet Society’s staff is comprised of technical experts in internetworking, cybersecurity, and network operations, among other fields, as well as policy experts in a broad range of Internet-related areas.

[2] “The Internet Way of Networking: Defining the Critical Properties of the Internet.” Internet Society. September 9, 2020.

[3] “A Declaration for the Future of the Internet.” The White House. United States, April 28, 2023.

[4] “Ministerial Declaration: The G7 Digital and Tech Ministers’ Meeting.” April 30, 2023.

[5] “Internet Impact Brief: How Canada’s Online News Act Will Harm the Internet, Restricting Innovation, Security, and Growth of the Digital Economy.” Internet Society, February 14, 2023.

[6] “An Update on Canada’s Bill C-18 and Our Search and News Products.” Google Canada Blog. Google, June 29, 2023.

[7] “Changes to News Availability on Our Platforms in Canada.” Meta. June 1, 2023.

[8] “Google Set to Remove News Links in Canada.” CTV News, June 30, 2023.

[9] “Toronto Star Owner in Talks to Merge with Postmedia.” Toronto Star, July 27, 2023.