Google establishes fund for news outlets as publisher-tech relationship grows frostier

Tom WickerFriday 11 December 2020

Stefan Ottlitz, Head of Product Development at German newspaper Der Spiegel, says this initiative shows Google is ‘serious about supporting quality journalism in Germany’.

The initiative comes as print sales continue to decline, and expanding readerships via online exposure has become vital to many news outlets’ survival.

The relationship between news publishers and tech platforms, meanwhile, has grown increasingly tense. In a June white paper, for example, trade association News Media Alliance raised concern about Google’s significant power as the ‘dominant online platform’ and the implications of this for news publishers.

A number of jurisdictions – including Australia and France – have taken action to force tech companies to pay publishers for news. In October, a French court upheld an earlier order from the French competition authority requiring Google to negotiate payment terms with media businesses under the ‘neighbouring rights’ enshrined by the EU’s overhaul of copyright law in 2019.

Australia proposed in July a ‘news media bargaining code’, which would require tech giants to share revenue with news publishers.

These developments could pave the way for more, potentially entangling digital giants in successive lawsuits. Costs add up, even for those with deep pockets.

‘Google is currently learning that they cannot do whatever they want’, says Ruben Hofmann, Co-Chair of the IBA Licensing Intellectual Property and International Treaties Subcommittee and a partner at German firm Heuking Kühn Lüer Wojtek. He points to the high-value fines issued against Google by the European Commission for breaches elsewhere.

‘And we need to keep in mind that US law provides for so-called punitive damages’, he adds. ‘US publishers may jump on that train.’

Not everyone is convinced that Google’s Showcase is an unambiguous win for publishers that will defuse the tension. ‘This billion-dollar number for a global media industry across three years is not that big when it comes to the value of that media’, says one industry source, who spoke on condition of anonymity.

The source is also concerned that Google ‘already defines “fair use” [of content] more liberally than we would in many cases. By agreeing to take money from them in this way, we are validating their behaviours.’

Meghann Farnsworth, Google’s Communications Manager for News, told Global Insight that the only content that appears in Showcase is what ‘publisher partners have curated. Google does not choose the content.’

While Showcase is likely to send traffic to the original publisher’s site, the return may not justify the effort behind ‘nicely curated content’ when it comes to ‘readers of Google News who tend to be pretty satisfied with just getting the headlines and the decks’, says the source.

‘There’s also a lot more data that could be useful to publishers in helping them to optimise their own businesses – and their own use of the Google engine. And Showcase isn’t really addressing that.’

Google doesn’t ‘proactively hand over’ any user data to publishers using Showcase, says Farnsworth. It provides analytics ‘around how often different features are used so publishers can understand how people are interacting with their content.’

Farnsworth adds that as part of an ‘extended access’ feature, Showcase users can register with publishers. With users reading their own pages, publishers can ‘use that information as they would on their own websites or apps.’

For Google, a one-off payment may be cheaper than the total cost of courtrooms and licensing agreements. ‘I assume this is like a first step’, says Hofmann. ‘It’s as if Google were saying: “Look, we’re prepared to talk.”’

There are clearly discussions to be had. Google has already postponed the roll-out of Showcase in Australia given the county’s proposed news media bargaining code. Mel Silva, Vice President, Google Australia & New Zealand, described the project as ‘on hold for now’ in a mid-October blog post, as the company ‘worked to understand’ the impact of the code.

Who Google chooses for payment – and who it chooses to leave out of Showcase – raises the prospect of competition-related issues down the line. Meanwhile, Hans Bousie, an entertainment and antitrust partner at the Netherlands-based firm bureau Brandeis, queries ‘what will happen if the publishers say no? Will [Google] use their content anyway?’

However, Farnsworth at Google explains that ‘the only content on News Showcase is content publishers agree to include. More generally, all publishers have the freedom and choice about whether or not to show up in search and how that will appear for them.’

Meanwhile, Eileen O’Gorman, Chair of the IBA Copyright and Entertainment Law Subcommittee and a partner at Gleeson McGrath Baldwin, is waiting to see how the French ruling requiring Google to make payments to publishers under the EU ‘neighbouring rights’ law will play out.

The authors of the EU copyright directive are trying ‘to promote a free and pluralistic press and address the negative impact of reduced revenue in the press sector. They’re trying to balance that against the new ways people find their news’, she says.

O’Gorman believes this will require the creation of new copyright collection societies – which collect and distribute royalties to their members – ‘because I don’t think Google could do it’.

She also points out that, under the EU directive, ‘the author [of content] has to be given a portion of the remuneration’. This, she says, has proven a contentious point in the film and music industries.

Each of these developments makes it clear that we are still at the start of a complicated, high-stakes negotiation between publishers and search engines like Google.