Legal systems have always struggled to keep up with rapid technological change, and things are no different in the world of generative AI. There are still relatively few rulings on the new issues that the roll-out of AI-based services is raising. That makes a ground-breaking judgment from a court in Germany particularly important. It concerns the AI Overview that sits at the top of the Google’s search results. The Decoder summarizes the court’s ruling:
The Regional Court of Munich hit Google with a temporary injunction barring the company from spreading false claims about two Munich-based publishers through its AI-generated search overviews (case no. 26 O 869/26). The court classified Google as a direct infringer because the “AI overview” is its own content, not just a list of search results.
Google’s AI overviews had falsely tied two publishing companies to scams, subscription traps, and shady business practices for certain search queries. According to the court, the AI mixed up information about other, genuinely sketchy companies with the plaintiffs and drew connections that didn’t appear in any of the linked sources. The publishers sent Google a cease-and-desist letter, but Google didn’t respond appropriately.
The legal innovation here is that the local German court held Google liable for the content of its AI Overview. Unlike traditional search results, which simply point to external sources of information, Google’s AI Overview made statements that were original, the court said:
Google’s AI overviews work nothing like traditional search results, the court argues. The AI rewrites and judges results “in its own words and according to its own structure,” the ruling says. In the case at hand, for example, it opened with confident claims like “Yes, [company] is known for dubious business practices,” then built its own structure with a summary, red flags for the alleged scam, and tips for users.
The court also found that the AI overview made claims “that are not even made in the search results.” None of the linked sources drew any connection between the plaintiffs and the shady companies the AI mentioned. The court called these “the defendant’s own statements.”
Google argued that people using its search engine could check the results, but the court dismissed the idea that this was the responsibility of the users. Leaving aside the fact that research from the Pew Research Center last year found that “Google users are less likely to click on links when an AI summary appears in the results,” there is also the difficulty of checking statements that have been made up (as in this case), which therefore come with no reference links. The court also dealt with the issue of free speech protection for AI-generated content:
An AI’s opinion is “not the expression of an acquired conviction of the persons expressing it, but the result of an algorithm,” the court wrote.
Offering AI-powered research is “above all an expression of Google’s business activities” and “at most a secondary expression of an interest in being able to freely express one’s opinion and beliefs.”
In a statement given to The Decoder, Google said “We invest deeply in the quality of AI Overviews to ensure that the overwhelming majority of responses provide accurate information, and they are designed to reflect the information that exists on the web.”
Since there is no way to ensure that AI responses are 100% correct, this judgment is a big problem for Google, not least because the company plans to place AI Overviews at the heart of its new AI-saturated search engine, as Techdirt reported recently. Not surprisingly, Google has announced that it will appeal against the ruling, which comes from a local German court. If a higher court upholds the judgment, one solution would be for Google to remove AI Overviews in Germany. That would be messy, but doable. But it’s not clear how other AI companies such as chatbots could do the same, since the AI-generated response generally forms the basis of the whole service. Some might choose to discontinue their operations completely in any jurisdiction that adopts a similar position to the Munich court. That would make the roll-out of international services more difficult.
In a post on his blog, the security guru Bruce Schneier points out that if the ruling stands and is adopted elsewhere, it could have important implications not just for things like Google’s AI Overviews and chatbots, but also for the increasingly popular AI agents:
More generally, liability concerns could mean that many current use cases for agents won’t be commercially viable. Companies may not be able to profitably operate AI lawyers, doctors and media influencers if they are held responsible for what they say and do.
Schneier says that he is “OK with this outcome”:
There’s nothing in the law that requires us to accommodate AI systems if they are fundamentally untrustworthy, just as we don’t need to accommodate untrustworthy human systems. Any company that won’t stand by the statements its agents make—whether human or AI—doesn’t deserve users’ time or money.
Clearly this question of AI and agentic liability requires urgent legal clarification. The German decision should at least help to concentrate people’s minds on the topic.
Google didn’t invent full-text search of the Internet – that honor belongs to early pioneers such as WebCrawler, Lycos and AltaVista. But for the last 25 years or so, Google has been synonymous with online searching, providing the quickest and most effective way to find things online (although its results may be getting worse.) More recently, it has been adding to its search engine more features based on generative AI, first with its AI Overviews in 2024, and then a year later with its AI Mode in Search. Now it has announced the latest stage in that evolution with what it calls “A new era for AI Search”:
It’s more intuitive than ever, dynamically expanding to give you space to describe exactly what you need. Designed to anticipate your intent, it also helps you formulate your question with AI-powered suggestions that go beyond autocomplete. And you can search across modalities, using text, images, files, videos or Chrome tabs as inputs.
This new incarnation effectively turns search into a chatbot:
You can easily ask a follow-up question right from an AI Overview, and flow into a conversational back and forth with AI Mode. Your context stays with you, and as you explore more deeply, the links and supporting articles get even more relevant. This seamless experience is live today across desktop and mobile, worldwide.
As the the screenshot of the new interface above shows, the traditional search result links that are currently placed under the AI Overview have now been confined to a small panel on the right-hand side of the screen, which shows a cut-down version of today’s list. Users are encouraged to ask follow-up questions from the AI search chatbot, rather than exploring the links themselves.
What this is likely to mean in practice is that even fewer people will follow links to sites, something that was already happening last year; instead, they will engage with Google’s chatbot to gather information indirectly. This is terrible news for access to knowledge because it frames the Google AI search engine as the fount of all knowledge – one that will do all the hard work of finding information and combining it into an easily digested answer that can be interrogated further. It can do that because it has already ingested billions of Web pages and other information sources as part of the Large Language Model (LLM) training process. But search engine users will no longer know what some of those sources are unless they painstakingly click on the links in the new panel.
Most people will not bother, because the AI-generated results will be good enough – or at least will appear to be good enough. Unless visitors to the site take the trouble to follow the links to the sources they won’t really know how reliable those results are. For example, it is possible that the sources are wrong, or misleading; moreover, Google’s LLM may itself introduce new errors and distortions. There is also the question of how Google will insert ads into this AI-generated information, and to what extent advertisers will be able to buy preferential treatment in results.
This new mediated approach is clearly terrible news for Wikipedia – an issue already discussed on Walled Culture earlier this year – and for creators. Google will use the information found in their works, but will not actively encourage people to visit the originals. For many people, summaries will be good enough, and they will never discover the greater riches of the sites and creations that Google’s LLM is based on. Worse still, the original creators such as Wikipedia may not even be mentioned in answers that involve aggregating information from a large number of sources.
Similarly, the new Google search is the publishing industry’s worst nightmare. Not only is Google drawing on material they have published, but it is pushing links to those sources into the background. It seems inevitable that the Web traffic to publishers will fall yet further, making already struggling business models based on advertising even more precarious. That will have knock-on consequences for the funding of many sites – particularly newspapers and magazines – and for the commissioning of work from journalists and other creative professionals. Users won’t even need to visit Google Search much in order to keep up-to-date with topics of interest thanks to Google Search’s new agentic capabilities that will do the work for them in advance:
With information agents, you can stay updated on whatever matters most to you. Your agent will intelligently look across everything on the web, like blogs, news sites and social posts, plus our freshest data, such as real-time info on finance, shopping and sports, to monitor for changes related to your specific question.
In this case, not only will people not visit sites, but the latter will be constantly bombarded by various AI bots seeking information on behalf of users – increasing site running costs, and making sites less usable by humans. Another key announcement from Google will lead to a further flood of agentic activities that will pose new challenges to businesses:
We’re also expanding agentic booking capabilities in Search to a wide range of new tasks, including local experiences and services. Just share your specific criteria — like finding a private karaoke room for six on a Friday night that serves food late — and Search brings together the latest pricing and availability with direct links to finish booking through the provider of your choice. And for select categories like home repair, beauty or pet care, you can ask Google to call businesses on your behalf.
What emerges from Google’s latest announcements is less of a search engine, and more of an immersive virtual environment that is designed to keep people engaging with Google’s services, asking them for information, advice and even delegating actions to them. There is no doubt that many users will find these new features attractive, not least because they can use “conversational voice features” in Gmail, Docs and elsewhere. These are the digital assistants that have been promised for many years, able to understand spoken commands, provide information verbally, and carry out complex operations on behalf of users without the need for any complex training. For many people, that will be a boon, and they will doubtless migrate from the traditional search page, which will still be the default – at least for now – to the latest AI-infused version.
But these impressive technical features come at a high price, even leaving aside issues such as the environmental impact of the huge server farms they require. With the latest incarnation of its search engine, Google is making the World Wide Web as we have known it for over 30 years invisible, and therefore increasingly irrelevant to most people, who will be happy to let Google become their universal user interface to everything. And yet Google still depends on the Internet to supply all the information it is analyzing and repackaging. It risks killing the very thing that sustains it.
There’s another, more subtle issue. The new Google search features make finding information and carrying out actions very easy in many ways. Leaving aside the problem that this will require people to trust what is in effect a huge black box, where the internal workings cannot be examined, with all the loss of control this implies, there is another danger. People who use Google’s powerful new AI search services to offload many of their day-to-day actions may gradually lose the ability to understand the world and to act within it without that constant help. Such a dependence may be great for Google and its advertisers, but it surely cannot be a good thing for the future of society.
Just a few weeks ago, we pointed out that the purpose of a trust & safety team is not, as Elon Musk falsely claims, to “censor” users, but rather to make sure they’re safe on the site. We were highlighting this in the context of Elon’s site disguising posted links in a manner that made it easier for scammers to trick people into thinking they were going to a reputable site, when they were not.
It looks like things have gotten even worse on that front. As Matt Binder pointed out at Mashable, ExTwitter has been experimenting with forcing the word “twitter” to change to “x” throughout the app. This is because, since Musk’s hasty change of names, which it was clear the company was unable to prepare for, the word “twitter” still remains all over the app. So, it seems like Musk was getting fed up of being reminded of the old app (you know, the one that actually worked most of the time and didn’t fall over every few days).
Scarily, this auto-change appears to happen even in the display of links in the iOS app, leading to crazy situations where people post domains with ‘twitter” in them, and ExTwitter makes them appear like they’re saying “x.”
But, this creates… a pretty massive security problem as the article describes:
Let’s say someone owns the domain name “NetfliTwitter.com.” Why would they own that domain name? Because if X is automatically changing anything that includes “Twitter.com” to “X.com,” then that means posting “NetfliTwitter.com” on X would make it appear in posts as “Netflix.com,” the popular movie streaming service. And if a user clicked the linked “Netflix.com” text that appears in that post, it would really take them to “NetfliTwitter.com.” Because while X is changing the text that the user wrote, the URL it links and directs to remains the same as the user posted.
This is a dream scenario for someone looking to steal passwords through phishing campaigns.
Luckily, two of the most popular domains that include a prominent “x” that could be used in this manner for phishing have been grabbed by good samaritans (not ExTwitter, of course) to prevent them from being abused:
The example I just provided isn’t a hypothetical either. Some users on X noticed this very problem and found that it could quickly be utilized by scammers, hackers, and other bad actors. X user @yuyu0127_ quickly registered the domain name “NetfliTwitter.com” in order to prevent it from being weaponized and put up a warning page on the URL about the potential issues in X’s changes.
“This domain has been acquired to prevent its use for malicious purposes,” reads the headline text on “NetfliTwitter.com.”
Another domain name “seTwitter.com” was also registered due to its potential to be exploited as X would then change how the URL is viewed on the platform to “sex.com.” The X user, @amasato_mochi, who registered that domain name, also put up a warning page in order to put a spotlight on the issue.
“Please be very careful not to access suspicious URLs,” reads seTwitter.com. “I will hold onto this domain for a year to prevent any harm.”
But still, this is a hugely problematic “feature,” and the kind of thing that a good trust & safety team would have recognized before the product ever rolled off the line and was handed to everyone to abuse.
One key job of trust & safety is to red-team new features to think about how they might be abused and to prevent such abuses before they happen. But when you fire all the experienced trust & safety folks, you’re going to continue to make these kinds of mistakes that make users way less safe, leading to significantly decreased trust.
I know that some people, including Elon Musk recently, have claimed that “trust & safety” is some sort of “euphemism for censorship.”
That is not true, and has never been true. The role of trust & safety has always been about building trust in the platform and making sure that users feel safe on the platform. This goes way, way beyond “ensuring compliance with the laws that already exist.”
Let’s give just one example that might highlight why you shouldn’t fire or drive out your entire trust & safety team and falsely claim that they were only there to “censor” political speech.
Just as a purely hypothetical example, let’s say that your CEO decides on a whim that showing the destination of URLs to news articles is aesthetically unpleasing when people post them. He then orders the remaining team to remove the URLs and headlines. After that fails miserably, he modifies it to make it a little clearer where the links are going to. Sort of.
But, because there’s no real trust & safety team, and whoever is left is told only to focus on “compliance with the laws that already exist,” you have no one to red team how all of this might be abused.
Users of the social media platform X (formerly Twitter) have often been left puzzled when they click on a post with an external link but arrive at an entirely unexpected website from the one displayed in the post.
A Twitter ad spotted below by a security researcher shows forbes.com as its destination but instead takes you to a Telegram account purportedly promoting crypto scams.
As Bleeping Computer describes (and originally called out by Will Dormann), a “verified” (lol) account posts something as an ad with a link that looks like it’s going to a reputable source (in this case, Forbes):
The fact that it was boosted as an ad suggests why it has over a million views and only 191 likes. Mucho organic. But, if you click on it, it takes you to some sketchy Telegram crypto scam.
How does that happen? Well, as Bleeping Computer notes, the link actually takes you to another site “joinchannelnow” (not sharing the TLD). This site then checks your user-agent and determines where to send you. If it thinks you’re a human, it sends you to the crypto shit on Telegram. If it thinks you’re a bot from Twitter trying to figure out the ultimate destination to display it… it sends you to a random Forbes article.
And, of course, this makes it all very, very ripe for scamming, whether phishing or otherwise. Much trust. Very safety.
Of course, since this is all entirely hypothetical, I’m just using it as an example of the kind of thing that a trust & safety team would likely red team and explore how such a system might be abused, and demonstrating how that role handles a hell of a lot of other things that have nothing to do with “political censorship.”
After all, we’re talking about a site where the “new owner” insisted he had to buy the place in order to stomp out scams. Given that, it would be absolutely ridiculous to fire all your trust & safety people. It would also be ridiculous to claim that they were just there for censorship, and you’re only enforcing the laws now… while then enabling scammers to take advantage of gullible people by (1) making it easy to let any old scam account get “verified,” (2) allowing them to post shit links to scam groups, and (3) enabling them to trick your system into telling people the link is to a more reputable site.
I mean, that would never happen, right? Not if you understood how trust & safety works. Especially when you have a (hypothetically) genius, visionary CEO who really is knocking down those censorship walls, and surely knows exactly what he’s doing.
And, really, if it did happen, I guess you’d deserve Lifehacker telling its users “the best way to stay safe on X is to stop using X.” But, of course, it wouldn’t happen. Because anyone with more than a few working brain cells would easily know that you need to actually have a trust & safety team that paid attention to this stuff. Right?
Look, I know some folks get annoyed that I write as much about Elon Musk and exTwitter as I do, but he’s really been the most fascinating case study in sheer wrongness regarding the running of a modern internet company and it’s just endlessly fascinating. And, really, if he just stopped doing stupid things, I could get to the very long list of other stuff I’d like to write about, but day after day after day, he just comes out with something new and stupid.
It’s uncanny.
Anyway, the latest, as first reported by Kylie Robison at Fortune, is that Elon wants to remove headlines and snippets from news articles posted to exTwitter. When an Elon stan tweeted about Robison’s article, Musk confirmed it and said it was coming from him “directly” and it will be done to “greatly improve esthetics.” From Robison’s article:
The change means that anyone sharing a link on X—from individual users to publishers—would need to manually add their own text alongside the links they share on the service; otherwise the tweet will display only an image with no context other than an overlay of the URL. While clicking on the image will still lead to the full article on the publisher’s website, the change could have major implications for publishers who rely on social media to drive traffic to their sites as well as for advertisers.
According to a source with knowledge of the matter, the change is being pushed directly by X owner Elon Musk. The primary objective appears to be to reduce the height of tweets, thus allowing more posts to fit within the portion of the timeline that appears on screen. Musk also believes the change will help curb clickbait, the source said.
“It’s something Elon wants. They were running it by advertisers, who didn’t like it, but it’s happening,” the source said, adding that Musk thinks articles occupy excessive space on the timeline.
On exTwitter people were passing around images of the change, going from the first screenshot on the left (how this currently works) to the example on the right, showing a giant image that will link to the article entirely without context.
How are people even going to know to click on those images when they just look like regular images? This is truly ridiculous.
Musk also claimed that journalists should publish directly on exTwitter rather than elsewhere, suggesting he thinks he can take on platforms like Substack:
Of course, a few years back, Twitter bought a Substack competitor called Revue, but Elon shut that down because nothing good from the old company can survive. Elon has to reinvent it in the dumbest way possible.
On top of that, Musk has obviously had his battles with media organizations. We covered his stupid battle with NPR that caused the organization to leave Twitter, even once Musk rescinded his petty changes to NPR’s account. And, of course, just recently there were the reports of how he was slowing down access to certain news sites. So perhaps this is just another attack on the media.
That said, there’s one other possibility that I haven’t seen anyone discuss. Just a few weeks ago, AFP sued exTwitter for failing to pay them under France’s extremely dumb snippet tax law. This is a French law that is similar in many ways to Australia’s and Canada’s link tax, except it’s more explicitly about snippets rather than links.
Of course, as we pointed out at the time, exTwitter should win that lawsuit, as the only way that snippets show up on Twitter is if the media org set up their Twitter Cards to work that way. The Twitter cards feature is how news sites would tell Twitter what to show when links are included, but this new change sounds like Musk will be massively limiting what data can be included through those cards.
So, it seems entirely possible that once Elon learned France was trying to make him pay for the snippets that show up via Twitter Cards, he just told the team to get rid of the snippets to get out of paying.
Of course, the reality is that this just (yet again) makes the product way worse, especially for news, which is a major reason that people use the platform. As with the ‘remove block’ idea, pretty much everyone seems to be telling Elon this is a dumb idea, but those seem to be the decisions he revels in the most.
Elon Musk’s commitment to free speech and the free exchange of ideas has always been been a joke. Despite his repeated claims to being a “free speech absolutist,” and promising that his critics and rivals alike would be encouraged to remain on exTwitter, he has consistently shown that he has a ridiculously thin skin, and a quick trigger response to try to remove, suppress, or silence those he dislikes.
Basically, Musk has made it clear that he views content moderation as a tool to get back at whoever displeases him. The latest, as first revealed by the Washington Post, is that exTwitter is using the t.co shortcode links that Twitter control (and which it routes all links on the platform through) to throttle any links to certain sites, including the NY Times and Reuters, as well as social media operations he’s scared of, including Instagram, Facebook, Substack and Bluesky.
The company formerly known as Twitter has begun slowing the speed with which users can access links to the New York Times, Facebook and other news organizations and online competitors, a move that appears targeted at companies that have drawn the ire of owner Elon Musk.
It’s a weird kind of throttling, first noticed by someone on Hacker News, noting that if you clicked on any of the disfavored URLs, you’d get a 5 second throttle delay. As that user explained:
Twitter won’t ban domains they don’t like but will waste your time if you visit them.
I’ve been tracking the NYT delay ever since it was added (8/4, roughly noon Pacific time), and the delay is so consistent it’s obviously deliberate.
The NY Times itself confirmed this as well. However, that report also noted that after the Washington Post story started making the rounds, the throttle suddenly started to disappear.
The slowness, known in tech parlance as “throttling,” initially affected rival social networks including Facebook, Bluesky and Instagram, as well as the newsletter site Substack and news outlets including Reuters and The New York Times, according to The Times’s analysis. The delay to load links from X was relatively minor — about 4.5 seconds — but still noticeable, according to the analysis. Several of the services that were throttled have faced the ire of X’s owner, Elon Musk.
By Tuesday afternoon, the delay to reaching the news sites appeared to have lifted, according to The Times’s analysis.
My own spot test found that the throttling appears to be gone as well.
In the end, a short time delay is certainly not a huge deal, but it does, again, show how Elon is willing to weaponize the tools at his disposal to try to hurt those he dislikes, and does so in a way that is both transparently obvious and silly, but which seems less likely to be immediately noticed.
It is, of course, also another example of how fickle Musk’s actual commitment to “free speech” is. This is not new of course, and he is free to do this if he wants to. But he shouldn’t pretend that his view of free speech is somehow more noble than old Twitter’s when his reasons for such throttling are transparently petty payback, rather than based on any coherent policy.
Whatever you thought of old Twitter’s moderation practices, they were at least actually based on policy, and not whatever personally irked Jack or the trust & safety team.
Elon Musk has decided to reenable accounts suspended for posting CSAM while at the same time allowing the most basic of CSAM scanning systems to break. And, that’s not even looking at how most of the team who was in charge of fighting CSAM on the site were either laid off or left.
And, that’s made Ex-Twitter a much riskier site in lots of ways, including for advertisers who have bailed. But also for anyone linking to the site.
Since Musk took control of Twitter, he mostly eliminated the Trust and Safety group and stopped paying the vendor that scans for CSAM. As a result, CSAM (child sexual abuse material) has apparently been circulating on Twitter recently (from what I’ve read elsewhere, the same notorious video that the feds found on Josh Duggar’s hard drive).
Musk also recently reinstated the account of someone who posted CSAM content.
As a result, we’ll be removing any content here that leads to Twitter, or, as he now calls it, X. Whether it’s an embed link or a direct link to a tweet. Don’t care what outlet is doing it. If you’re a reporter or editor, stop embedding links to Twitter in any of your content.
Note that they’re not just banning links that go directly to Twitter, but also links to news stories that link or embed Twitter content. As that final sentence notes, the subreddit is encouraging journalists to stop linking to Twitter entirely (remember, at Techdirt we banned Twitter embeds last year).
I’m not sure it’s reasonable to ban any news article that merely links to or embeds a tweet, but it’s certainly interesting to see how this subreddit, in particular, is handling the increasing liability that Twitter (er… Ex-Twitter) has become.
I had wondered if the members of that subreddit would be upset about this, but skimming the comments and it seems like they’re pretty overwhelmingly in support of the move. Again, this is, perhaps surprising, but a real indicator of just how much damage Elon has done to Ex-Twitter’s brand, let alone to “X.”
There have been some ongoing debates (going back many years) in the copyright space regarding whether or not embedding infringing content into a website could be infringing in and of itself. If you understand what’s happening technically, this seems ludicrous. An embed is basically the same thing as a link. And merely linking to infringing content is unlikely to be infringing itself. All embedding is really doing is taking a link, and showing the content from that link. If embedding were found to be infringing, then there’s an argument that linking is infringing, and (as we’re seeing with various link tax proposals) that would break a fundamental part of how the internet works.
Last year we discussed a case that was on appeal to the 9th Circuit, that asked a slightly different question: could a company providing embeddable content (in this case Instagram) be held liable for providing embedding tools that then allowed others to embed content from that website elsewhere. In this case, some photographers argued that by providing tools (i.e., a tiny snippet of code that basically says “show this content at this link”) for embedding, Instagram was unfairly distributing works without a license. Specifically, the photographers were upset that works that they uploaded to Instagram were showing up in news articles after the media orgs used Instagram’s embed tool to embed the original (non-infringing) images. The lower court had (thankfully) rejected that argument.
The 9th Circuit has now upheld that lower court ruling, protecting some important elements of the ability to offer and use embed codes. At issue in this case, really, was yet another attempt to take the already problematic Aereo copyright test, which we’ve described as the “looks like a duck” test (ignoring the technical issues, and doing a “this looks like something else that is infringing, therefore we will assume this is infringing, no matter what the underlying details show”), which argued that because embeds look like locally hosted content, we should still treat it as if it’s locally hosted content.
Thankfully, the court rejects that line of argument, and makes it clear that the important Perfect 10 copyright case, which focused on who was actually hosting the material, was not overruled by Aereo.
This copyright dispute tests the limits of our holding in Perfect 10 v. Amazon, 508 F.3d 1146 (9th Cir. 2007) in light of the Supreme Court’s subsequent decision in American Broadcasting Companies, Inc. v. Aereo, 573 U.S. 431 (2014). Plaintiffs-appellees Alexis Hunley and Matthew Scott Brauer (collectively “Hunley”) are photographers who sued defendant Instagram for copyright infringement. Hunley alleges that Instagram violates their exclusive display right by permitting third-party sites to embed the photographers’ Instagram content. See 17 U.S.C. § 106(5). The district court held that Instagram could not be liable for secondary infringement because embedding a photo does not “display a copy” of the underlying images under Perfect 10.
We agree with the district court that Perfect 10 forecloses relief in this case. Accordingly, we affirm.
I’m actually somewhat impressed that the court’s discussion of embedding remote content vs. hosting local content is… pretty clear, correct, and understandable.
When a web creator wants to include an image on a website, the web creator will write HTML instructions that direct the user’s web browser to retrieve the image from a specific location on a server and display it according to the website’s formatting requirements. When the image is located on the same server as the website, the HTML will include the file name of that image. So for example, if the National Parks Service wants to display a photo of Joshua Tree National Park located on its own server, it will write HTML instructions directing the browser to display the image file, , and the browser will retrieve and display the photo, hosted by the NPS server. By contrast, if an external website wants to include an image that is not located on its own servers, it will use HTML instructions to “embed” the image from another website’s server. To do so, the embedding website creator will use HTML instructions directing the browser to retrieve and display an image from an outside website rather than an image file. So if the embedding website wants to show the National Park Service’s Instagram post featuring Joshua Tree National Park—content that is not on the embedding website’s same server—it will direct the browser to retrieve and display content from the Instagram’s server.
It even includes an example of a full Instagram embed, which is not something you normally see in a judicial ruling.
The court does say that hyperlinking is different than embedding (though I’d argue it’s not really), but at least the court is clear that embedding content is not hosted by the website using the embed code:
As illustrated by the HTML instructions above, embedding is different from merely providing a hyperlink. Hyperlinking gives the URL address where external content is located directly to a user. To access that content, the user must click on the URL to open the linked website in its entirety. By contrast, embedding provides instructions to the browser, and the browser automatically retrieves and shows the content from the host website in the format specified by the embedding website. Embedding therefore allows users to see the content itself—not merely the address—on the embedding website without navigating away from the site. Courts have generally held that hyperlinking does not constitute direct infringement. See, e.g., Online Pol’y Grp. v. Diebold, Inc., 337 F. Supp. 2d 1195, 1202 n.12 (N.D. Cal. 2004) (“[H]yperlinking per se does not constitute direct infringement because there is no copying, [but] in some instances there may be a tenable claim of contributory infringement or vicarious liability.”); MyPlayCity, Inc. v. Conduit Ltd., 2012 WL 1107648, at *12 (S.D.N.Y. Mar. 20, 2012) (collecting cases), adhered to on reconsideration, 2012 WL 2929392 (S.D.N.Y. July 18, 2012).
From the user’s perspective, embedding is entirely passive: the embedding website directs the user’s own browser to the Instagram account and the Instagram content appears as part of the embedding website’s content. The embedding website appears to the user to have included the copyrighted material in its content. In reality, the embedding website has directed the reader’s browser to retrieve the public Instagram account and juxtapose it on the embedding website. Showing the Instagram content is almost instantaneous.
Importantly, the embedding website does not store a copy of the underlying image. Rather, embedding allows multiple websites to incorporate content stored on a single server simultaneously. The host server can control whether embedding is available to other websites and what image appears at a specific address. The host server can also delete or replace the image. For example, the National Park Service could replace the picture of Joshua Tree at with a picture of Canyonlands National Park. So long as the HTML instructions from the third-party site instruct the browser to retrieve the image located at a specific address, the browser will retrieve whatever the host server supplies at that location.
As the 9th Circuit notes, under the Perfect 10 rulings, the court has (rightly!) recognized that the Copyright Act’s “fixation” requirement means that the content in question has to actually be stored on the computer’s memory to be infringing, and embedding and other “in-line linking” don’t do that.
The court first rejects the argument that Perfect 10’s so-called “server test” only applies to search engines. As it notes, there’s no rationale for such a limitation:
Perfect 10 did not restrict the application of the Server Test to a specific type of website, such as search engines. To be sure, in Perfect 10, we considered the technical specifications of Google Image Search, including Google’s ability to index third-party websites in its search results. Perfect 10, 508 F.3d at 1155. We also noted Google’s reliance on an automated process for searching vast amounts of data: to create such a search engine, Google “automatically accesses thousands of websites . . . and indexes them within a database” and “Google’s computer program selects the advertising automatically by means of an algorithm.” Id. at 1155–56. But in articulating the Server Test, we did not rely on the unique context of a search engine. Our holding relied on the “plain language” of the Copyright Act and our own precedent describing when a copy is “fixed” in a tangible medium of expression. Id. (citing 17 U.S.C. § 101). We looked to MAI Sys. Corp. v. Peak Computer, Inc., for the conclusion that a digital image is “fixed” when it is stored in a server, hard disk, or other storage device. 991 F.2d 511, 517–18 (9th Cir. 1993). Applying this fixation requirement to the internet infrastructure, we concluded that in the embedding context, a website must store the image on its own server to directly infringe the public display right.
Then there’s the question of whether or not Aereo’s “looks like a duck” test at the Supreme Court effectively overruled the 9th Circuit’s server test. Thankfully, the 9th Circuit says it did not. The reasoning here is a bit complex (perhaps overly so), but basically the 9th Circuit says that Perfect 10 “server test” applies to the display right under copyright, whereas the Aereo test applies to the transmission of content, or the public performance right. It’s true that these are different rights, but really all this should serve to do is reinforce jus how wrong (and stupid) the Aereo ruling was. But, alas:
This difference between these two rights are significant in this case. Perfect 10 and Aereo deal with separate provisions of the Copyright Act—Perfect 10 addressed the public display right, and Aereo concerned the public performance right. In Perfect 10, we analyzed what it meant to publicly display a copy in the electronic context. See Perfect 10, 508 F.3d at 1161. By contrast, in Aereo the Court did not address what it means to transmit a copy, because the public performance right has no such requirement. See Aereo, 573 U.S. at 439–44. In other words, regardless of what Aereo said about retransmission of licensed works, Perfect 10 still forecloses liability to Hunley because it answered a predicate question: whether embedding constitutes “display” of a “copy.” Perfect 10, 508 F.3d at 1160. Aereo may have clarified who is liable for retransmitting or providing equipment to facilitate access to a display—but unless an underlying “copy” of the work is being transmitted, there is no direct infringement of the exclusive display right. Thus, Perfect 10 forecloses Hunley’s claims, even in light of Aereo.
This is correct in paying attention to who actually is making copies of the underlying work, but is still highlighting just how broken the Aereo ruling really was.
Either way, the 9th Circuit adds one more point here, which is that to violate copyright law, you have to show “volitional conduct,” and that can’t be done here:
There is an additional reason we cannot find liability for Instagram here. We held, prior to Aereo, that infringement under the Copyright Act requires proof of volitional conduct, the Copyright Act’s version of proximate cause. See Fox Broad. Co., Inc. v. Dish Network LLC, 747 F.3d 1060, 1067 (9th Cir. 2013); Kelly v. Arriba Soft Corp., 336 F.3d 811, 817 (9th Cir. 2003) (“To establish a claim of copyright infringement by reproduction, the plaintiff must show . . . copying by the defendant.”). And we are not alone, indeed, “every circuit to address this issue has adopted some version of . . . the volitional-conduct requirement.” BWP Media USA, Inc. v. T&S Software Assocs., Inc., 852 F.3d 436, 440 (5th Cir. 2017) (citing cases). The Court in Aereo did not address volitional conduct as such, although Justice Scalia did so in his dissent. See Aereo, 573 U.S. at 453 (Scalia, J., dissenting). But the Court did distinguish between those who engage in activities and may be said to “perform” and those who engage in passive activities such as “merely suppl[ying] equipment that allows others to do so.” Id. at 438–39. In any event, Perfect 10 was bound to apply our volitional-conduct analysis. When we applied our requirement that the infringer be the direct cause of the infringement, we concluded that the entity providing access to infringing content did not directly infringe, but the websites who copied and displayed the content did. Perfect 10, 508 F.3d at 1160.
Post-Aereo, we have continued to require proof of “causation [as] an element of a direct infringement claim.” Giganews, 847 F.3d at 666. In such cases we have taken account of Aereo and concluded that our volitional conduct requirement is “consistent with the Aereo majority opinion,” and thus remains “intact” in this circuit. Id. at 667; see Bell v. Wilmott Storage Servs., LLC, 12 F.4th 1065, 1081–82 (9th Cir. 2021); Oracle Am., Inc. v. Hewlett Packard Enter. Co., 971 F.3d 1042, 1053 (9th Cir. 2020); VHT, Inc. v. Zillow Grp., Inc., 918 F.3d 723, 731 (9th Cir. 2019). Our volitional conduct requirement draws a distinction between direct and secondary infringement that would likely foreclose direct liability for third-party embedders. And without direct infringement, Hunley’s secondary liability theories all fail. See Oracle Am., Inc., 971 F.3d at 1050.
So, even if Aereo overruled Perfect 10 (which it did not), this case was a loser.
Interestingly, the 9th Circuit also seems to throw some shade on the attempt by the plaintiffs in this case to try to stretch the “looks like a duck” test to apply here, and thankfully, the 9th Circuit basically says “don’t read too much into that test.”
We are reluctant to read too much into this passage. The Court commented on user perception to point out the similarities between Aereo and traditional cable companies. These similarities mattered because the 1976 Copyright Amendments specifically targeted cable broadcasts. See Aereo, 573 U.S. at 433. But the Court did not rely on user perception alone to determine whether Aereo performed. See id. The Court has not converted user perception into a separate and independent rule of decision.
While this again suggests that the 9th Circuit realizes the Aereo ruling is problematic, it also provides more examples of why, even with Aereo in place, the test does not apply to “perception” in other contexts.
There is a weird bit at the end of the ruling, responding to the plaintiff’s (ridiculous) claims that the server test undermines the policy purpose of copyright law (it does not, it upholds it…) by suggesting that plaintiffs apply for en banc review or petition the Supreme Court to review this as well. That… very well might happen, and would (yet again) put another important factor of the open web on trial.
Hunley, Instagram, and their amici have peppered us with policy reasons to uphold or overturn the Server Test. Their concerns are serious and well argued. Hunley argues that the Server Test allows embedders to circumvent the rights of copyright holders. Amici for Hunley argue that the Server Test is a bad policy judgment because it destroys the licensing market for photographers. On the other hand, amici for Instagram argue that embedding is a necessary part of the open internet that promotes innovation. As citizens and internet users, we too are concerned with the various tensions in the law and the implications of our decisions, but we are not the policymakers.
If Hunley disagrees with our legal interpretation—either because our reading of Perfect 10 is wrong or because Perfect 10 itself was wrongly decided—Hunley can petition for en banc review to correct our mistakes. But we have no right “to judge the validity of those [] claims or to foresee the path of future technological development.” Aereo, 573 U.S. at 463 (Scalia, J., dissenting). Most obviously, Hunley can seek further review in the Supreme Court or legislative clarification in Congress.
In other words, while this is a good ruling, there’s a good chance this issue is far from settled.
The California legislature is competing with states like Florida and Texas to see who can pass laws that will be more devastating to the Internet. California’s latest entry into this Internet death-spiral is the California Journalism Protection Act (CJPA, AB 886). CJPA has passed the California Assembly and is pending in the California Senate.
The CJPA engages with a critical problem in our society: how to ensure the production of socially valuable journalism in the face of the Internet’s changes to journalists’ business models? The bill declares, and I agree, that a “free and diverse fourth estate was critical in the founding of our democracy and continues to be the lifeblood for a functioning democracy…. Quality local journalism is key to sustaining civic society, strengthening communal ties, and providing information at a deeper level that national outlets cannot match.” Given these stakes, politicians should prioritize developing good-faith and well-researched ways to facilitate and support journalism. The CJPA is none of that.
Instead, the CJPA takes an asinine, ineffective, unconstitutional, and industry-captured approach to this critical topic. The CJPA isn’t a referendum on the importance of journalism; instead, it’s a test of our legislators’ skills at problem-solving, drafting, and helping constituents. Sadly, the California Assembly failed that test.
Overview of the Bill
The CJPA would make some Big Tech services pay journalists for using snippets of their content and providing links to the journalists’ websites. This policy approach is sometimes called a “link tax,” but that’s a misnomer. Tax dollars go to the government, which can then allocate the money to (in theory) advance the public good—such as funding journalism.
The CJPA bypasses the government’s intermediation and supervision of these cash flows. Instead, it pursues a policy worse than socialism. CJPA would compel some bigger online publishers (called “covered platforms” in the bill) to transfer some of their wealth directly to other publishers—intended to be journalistic operations, but most of the dollars will go to vulture capitalists’ stockholders and MAGA-clickbait outlets like Breitbart.
In an effort to justify this compelled wealth transfer, the bill manufactures a new intellectual property right—sometimes called an “ancillary copyright for press publishers“—in snippets and links and then requires the platforms to pay royalties (euphemistically called “journalism usage fee payments”) for the “privilege” of publishing ancillary-copyrighted material. The platforms aren’t allowed to reject or hide DJPs’ content, so they must show the content to their audiences and pay royalties even if they don’t want to.
The wealth-transfer recipients are called “digital journalism providers” (DJPs). The bill contemplates that the royalty amounts will be set by an “arbitrator” who will apply baseball-style “arbitration,” i.e., the valuation expert picks one of the parties’ proposals. “Arbitrator” is another misnomer; the so-called arbitrators are just setting valuations.
DJPs must spend 70% of their royalty payouts on “news journalists and support staff,” but that money won’t necessarily fund NEW INCREMENTAL journalism. The bill explicitly permits the money to be spent on administrative overhead instead of actual journalism. With the influx of new cash, DJPs can divert their current spending on journalists and overhead into the owners’ pockets. Recall how the COVID stimulus programs directly led to massive stock buybacks that put the government’s cash into the hands of already-wealthy stockholders—same thing here. Worse, journalist operations may become dependent on the platforms’ royalties, which could dry up with little warning (e.g., a platform could drop below CJPA’s statutory threshold). We should encourage journalists to build sustainable business models. CJPA does the opposite.
Detailed Analysis of the Bill Text
Who is a Digital Journalism Provider (DJP)?
A print publisher qualifies as a DJP if it:
“provide[s] information to an audience in the state.” Is a single reader in California an “audience”? By mandating royalty payouts despite limited ties to California, the bill ensures that many/most DJPs will not be California-based or have any interest in California-focused journalism.
“performs a public information function comparable to that traditionally served by newspapers and other periodical news publications.” What publications don’t serve that function?
“engages professionals to create, edit, produce, and distribute original content concerning local, regional, national, or international matters of public interest through activities, including conducting interviews, observing current events, analyzing documents and other information, or fact checking through multiple firsthand or secondhand news sources.” This is an attempt to define “journalists,” but what publications don’t “observe current events” or “analyze documents or other information”?
updates its content at least weekly.
has “an editorial process for error correction and clarification, including a transparent process for reporting errors or complaints to the publication.”
has:
$100k in annual revenue “from its editorial content,” or
an ISSN (good news for me; my blog ISSN is 2833-745X), or
is a non-profit organization
25%+ of content is about “topics of current local, regional, national, or international public interest.” Again, what publications don’t do this?
is not foreign-owned, terrorist-owned, etc.
If my blog qualifies as an eligible DJP, the definition of DJPs is surely over-inclusive.
Broadcasters qualify as DJPs if they:
have the specified FCC license,
engage journalists (like the factor above),
update content at least weekly, and
have error correction processes (like the factor above).
Who is a Covered Platform?
A service is a covered platform if it:
Acquires, indexes, or crawls DJP content,
“Aggregates, displays, provides, distributes, or directs users” to that content, and
Either
Has 50M+ US-based MAUs or subscribers, or
Its owner has (1) net annual sales or a market cap of $550B+ OR (2) 1B+ worldwide MAUs.
(For more details about the problems created by using MAUs/subscribers and revenues/market cap to measure size, see this article).
How is the “Journalism Usage Fee”/Ancillary Copyright Royalty Computed?
The CJPA creates a royalty pool of the “revenue generated through the sale of digital advertising impressions that are served to customers in the state through an online platform.” I didn’t understand the “impressions” reference. Publishers can charge for advertising in many ways, including ad impressions (CPM), clicks, actions, fixed fee, etc. Does the definition only include CPM-based revenue? Or all ad revenue, even if impressions aren’t used as a payment metric? There’s also the standard problem of apportioning ad revenue to “California.” Some readers’ locations won’t be determinable or will be wrong; and it may not be possible to disaggregate non-CPM payments by state.
Each platform’s royalty pool is reduced by a flat percentage, nominally to convert ad revenues from gross to net. This percentage is determined by a valuation-setting “arbitration” every 2 years (unless the parties reach an agreement). The valuation-setting process is confusing because it contemplates that all DJPs will coordinate their participation in a single “arbitration” per platform, but the bill doesn’t provide any mechanisms for that coordination. As a result, it appears that JDPs can independently band together and initiate their own customized “arbitration,” which could multiply the proceedings and possibly reach inconsistent results.
The bill tells the valuation-setter to:
Ignore any value conferred by the platform to the JDPs due to the traffic referrals, “unless the covered platform does not automatically access and extract information.” This latter exclusion is weird. For example, if a user posts a link to a third-party service, the platform could argue that this confers value to the JDP only if the platform doesn’t show an automated preview.
Note: In a typical open-market transaction, the parties always consider the value they confer on each other when setting the price. By unbalancing those considerations, the CJPA guarantees the royalties will overcompensate DJPs.
“Consider past incremental revenue contributions as a guide to the future incremental revenue contribution” by each DJP. No idea what this means.
Consider “comparable commercial agreements between parties granting access to digital content…[including] any material disparities in negotiating power between the parties to those commercial agreements.” I assume the analogous agreements will come from music licensing?
Each JDP is entitled to a percentage, called the “allocation share,” of the “net” royalty pool. It’s computed using this formula: (the number of pages linking to, containing, or displaying the JDP’s content to Californians) / (the total number of pages linking to, containing, or displaying any JDP’s content to Californians). Putting aside the problems with determining which readers are from California, this formula ignores that a single page may have content from multiple DJPs. Accordingly, the allocation share percentages cumulatively should add up to over 100% of the net royalty pool calculated by the valuation-setters. In other words, the formula ensures the unprofitability of publishing DJP content. For-profit companies typically exit unprofitable lines of business.
Elimination of Platforms’ Editorial Discretion
The CJPA has an anti-“retaliation” clause that nominally prevents platforms from reducing their financial exposure:
(a) A covered platform shall not retaliate against an eligible digital journalism provider for asserting its rights under this title by refusing to index content or changing the ranking, identification, modification, branding, or placement of the content of the eligible digital journalism provider on the covered platform.
(b) An eligible digital journalism provider that is retaliated against may bring a civil action against the covered platform.
(c) This section does not prohibit a covered platform from, and does not impose liability on a covered platform for, enforcing its terms of service against an eligible journalism provider.
This provision functions as a mandatory must-carry provision. It forces platforms to carry content they don’t want to carry and don’t think is appropriate for their audience—at peril of being sued for retaliation. In other words, any editorial decision that is adverse to any DJP creates a non-trivial risk of a lawsuit alleging that the decision was retaliatory. It doesn’t really change the calculus if the platform might ultimately prevail in the lawsuit; the costs and risks of being sued are enough to prospectively distort the platform’s decision-making.
[Note: section (c) doesn’t negate this issue at all. It simply converts a litigation battle over retaliation into a battle over whether the DJP violated the TOS. Platforms could try to eliminate the anti-retaliation provision by drafting TOS provisions broad enough to provide them with total editorial flexibility. However, courts might consider such broad drafting efforts to be bad faith non-compliance with the bill. Further, unhappy DJPs will still claim that broad TOS provisions were selectively enforced against them due to the platform’s retaliatory intent, so even tricky TOS drafting won’t eliminate the litigation risk.]
Thus, CJPA rigs the rules in favor of DJPs. The financial exposure from the anti-retaliation provision, plus the platform’s reduced ability to cater to the needs of its audience, further incentivizes platforms to drop all DJP content entirely or otherwise substantially reconfigure their offerings.
Limitations on JDP Royalty Spending
DJPs must spend 70% of the royalties on “news journalists and support staff.” Support staff includes “payroll, human resources, fundraising and grant support, advertising and sales, community events and partnerships, technical support, sanitation, and security.” This indicates that a DJP could spend the CJPA royalties on administrative overhead, spend a nominal amount on new “journalism,” and divert all other revenue to its capital owners. The CJPA doesn’t ensure any new investments in journalism or discourage looting of journalist organizations. Yet, I thought supporting journalism was CJPA’s raison d’être.
Why CJPA Won’t Survive Court Challenges
If passed, the CJPA will surely be subject to legal challenges, including:
Restrictions on Editorial Freedom. The CJPA mandates that the covered platforms must publish content they don’t want to publish—even anti-vax misinformation, election denialism, clickbait, shill content, and other forms of pernicious or junk content.
Florida and Texas recently imposed similar must-carry obligations in their social media censorship laws. The Florida social media censorship law specifically restricted platforms’ ability to remove journalist content. The 11th Circuit held that the provision triggered strict scrutiny because it was content-based. The court then said the journalism-protection clause failed strict scrutiny—and would have failed even lower levels of scrutiny because “the State has no substantial (or even legitimate) interest in restricting platforms’ speech… to ‘enhance the relative voice’ of… journalistic enterprises.” The court also questioned the tailoring fit. I think CJPA raises the same concerns. For more on this topic, see Ashutosh A. Bhagwat, Why Social Media Platforms Are Not Common Carriers, 2 J. Free Speech L. 127 (2022).
Note: the Florida bill required platforms to carry the journalism content for free. CJPA would require platforms to pay for the “privilege” of being forced to carry journalism content, wanted or not. CJPA’s skewed economics denigrate editorial freedom even more grossly than Florida’s law.
Copyright Preemption. The CJPA creates copyright-like protection for snippets and links. Per 17 USC 301 (the copyright preemption clause), only Congress has the power to provide copyright-like protection for works, including works that do not contain sufficient creativity to qualify as an original work of authorship. Content snippets and links individually aren’t original works of authorship, so they do not qualify for federal copyright protection at the federal or state level; while any compilation copyright is within federal copyright’s scope and therefore is also off-limits to state protection.
The CJPA governs the reproduction, distribution, and display of snippets and links, and the federal copyright law governs those activities in 17 USC 106. CJPA’s provisions thus overlap with 106’s scope, but the works are within the scope of federal copyright law. This is not permitted by federal copyright preemption.
Section 230. Most or all of the snippets/links governed by the CJPA will constitute third-party content, including search results containing third-party content and user-submitted links where the platform automatically fetches a preview from the JDP’s website. Thus, CJPA runs afoul of Section 230 in two ways. First, it treats the covered platforms as the “publishers or speakers” of those snippets and links for purposes of the allocation share. Second, the anti-retaliation claim imposes liability for removing/downgrading third-party content, which courts have repeatedly said is covered by Section 230 (in addition to the First Amendment).
DCC. I believe the Dormant Commerce Clause should always apply to state regulation of the Internet. In this case, the law repeatedly contemplates the platforms determining the location of California’s virtual borders, which will always have an error rate that cannot be eliminated. Those errors guarantee that the law reaches activity outside of California.
Takings. I’m not a takings expert, but a government-compelled wealth transfer from one private party to another sounds like the kind of thing our country’s founders would have wanted to revolt against.
Conclusion
Other countries have attempted “link taxes” like CJPA. I’m not aware of any proof that those laws have accomplished their goal of enhancing local journalism. Knowing the track record of global futility, why do the bill’s supporters think CJPA will achieve better results? Because of their blind faith that the bill will work exactly as they anticipate? Their hatred of Big Tech? Their desire to support journalism, even if it requires using illegitimate means?
Our country absolutely needs a robust and well-functioning journalism industry. Instead of making progress towards that vital goal, we’re wasting our time futzing with crap like CJPA.
Originally posted to Eric Goldman’s Technology & Marketing Law Blog, reposted here with permission, and (thankfully, for the time being) without having to pay Eric to link back to his original even though he qualifies as a “DJP” under this law.
We’ve written a few times about California’s “Journalism Protection Act” (CJPA) from state Rep. Buffy Wicks, and many times about the terrible concept of such link taxes. Unfortunately, it looks like California’s bill is moving forward, with buy-in from the big media orgs and their journalists that will get the free pay offs from such an unconstitutional link tax.
In response, Meta has now announced (as it has done elsewhere) that if California passes the CJPA it will simply stop allowing links to news media in California. From a statement posted on Twitter by Meta’s Comms boss Andy Stone:
If the Journalism Preservation Act passes, we will be forced to remove news from Facebook and Instagram rather than pay into a slush fund that primarily benefits big, out-of-state media companies under the guise of aiding California publishers. The bill 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. It is disappointing that California lawmakers appear to be prioritizing the best interests of national and international media companies over their own constituents.
Obviously, that statement is a bit self-serving, but this is the only reasonable response to this nonsense (other than to sue to have the law found unconstitutional).
Again, as we’ve detailed many times before, the impact of a tax on an activity is that you get less of that activity. Indeed, that’s often the reason given for taxing certain things. So no one should be surprised that if you tax links, companies that are going to have to pay are now going to decrease the links they allow. And, as is the case with news, where there has been little actual value to companies like Meta (which have long focused on family/friend connections over media), that if they just do a quick cost/benefit analysis of the situation, they’re likely to conclude that it’s just not worth it, and therefore ban links to news sites.
Still, I’m a bit confused by the reaction to this. As happened in Australia, people are attacking Meta over this, which shows an astounding level of entitlement. It’s literally saying (1) you have to allow yourself to be used to promote our news and send traffic to us, AND (2) you have to pay us for letting us use your platform for promotion and traffic. It’s only reasonable for a website to say “uh, no.” To then attack companies for recognizing what a terrible deal that is… is strange.
I’ve even seen some people call it “censorship” by Meta, which makes no sense at all. Here’s Buffy Wicks, the sponsor of the bill, claiming that this is Meta trying to “silence journalists.” I mean, come on.
Will Buffy Wicks let me post Techdirt articles to her website? Or to her Facebook page? No? Why is she silencing me!? Look, a private company choosing not to do the thing you’re going to force them to pay for, which is not providing much value for them, and which should be free… and then having them say “that’s not worth it,” is so far from silencing people as to call into question why anyone should take Wicks seriously on anything.
This is pretty straightforward economics: California is trying to tax something that is free and always should be free (the ability to link). They’re doing it as a favor to news orgs and as a smack down on companies they have made it clear they dislike (Google and Meta). But, if you’re going to force companies to pay for something that is free, don’t be surprised when they do the math and realize it’s not worth it.
