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April 11, 2024

Google’s fight in France and what it means for UK publishers

What can UK publishers learn from the French competition authority’s €250m fine imposed on Google.

By David Buttle

In March the French competition authority issued another ruling – and another hefty €250m (£213m) fine – in its long-running pursuit of Google. The judgement finds against both the search giant’s approach to publisher negotiations for the use of media content on its platforms, and the controls it’s giving news businesses over AI training.

Google’s decision to pay repeated fines instead of comply gives us reasons to think that UK publishers are soon going to be able to improve their terms with the Mountain View behemoth.

At the heart of the dispute between publishers and Google – both in France and globally – is search itself. Publishers claim that they are due payment for the use of their content on Google’s results pages. Their case is that it is only as a consequence of the imbalance in bargaining power that they’re unable to secure fair remuneration through negotiations.

Google’s counter-argument is that the traffic it delivers to publishers is more valuable than what it receives in return; that it’s unable to monetise news queries via ads, and that the freedom to link is a fundamental tenet of the internet and therefore there is no legal foundation for payments to be made.

Governments have been moved to intervene on behalf of – mostly domestically-owned (and politically influential) – news outlets. There are two means by which they have done so. How much publishers get paid hinges on which policy intervention has been deployed.

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Two methods of attempting to level the playing field

The first policy option is via copyright law. This is the approach taken on the continent and the current basis for payments to French publishers.

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The EU passed the Copyright Directive in 2019. This creates a new ‘ancillary’ copyright for press publishers, explicitly giving them legal basis to secure authorisation – and payment – for the use of their content by online platforms (although unhelpfully excludes the use of ‘very short extracts’, without providing a definition).

The second approach of governments is to tackle the power imbalance head-on through competition law, as we have seen in Australia and Canada. And, shortly, with the Digital Markets Unit regime here in the UK too. These interventions seek to level the playing field directly by introducing mandatory bargaining, backstopped by final offer arbitration.

So we have two different policy mechanisms seeking to facilitate publishers to get paid for the use of their content. Google’s response has been to establish a means to pay publishers which protects their core search product. Enter News Showcase.

Google News Showcase is a user-facing product. But very few people see it. It primarily exists as a neat contracting trick to facilitate payments to publishers for the use of their content whilst allowing Google to maintain the legal position that payments are not due for the use of news content in search results.

Payment disparities via Google News Showcase

Showcase is now live in 25 countries and expanding all the time. But, while Google has a single technical – and contracting – product to pay publishers, the amount paid in each country varies widely.

If payments are being made under the Copyright Directive then they’re not going to be very substantial (NB: The Showcase deals on offer in the UK at the moment broadly mirror those in the EU). Whereas, if payments are made under competition interventions and the threat of genuine negotiations for the use of content in search results, it’s a different story.

I’ll give an example. Google struck a Showcase deal with Le Monde, the venerable French national, worth a reported $1.3m (£1m) a year. To give a sense of scale and impact, Le Monde’s digital properties see around 120 million visits a month.

By contrast, in Australia Google signed a deal with Seven West Media – whose flagship news title is The West Australian, a regionally-focused daily – for AUD$21m (£15.6m) annually. The West Australian website receives around 2.5 million visits a month.

While the deals done with French publishers were under the Copyright Directive, this latest regulatory intervention is on the basis of antitrust infringements. The aim is clearly to secure deals for French publishers more like Seven West and less like Le Monde.

To achieve this the French competition authority is trying to force Google to negotiate in broadly the same way as the UK’s regime will do. That’s by mandating negotiations over search. And Google is repeatedly not playing ball. €750m (£641m) in fines over four years have now been levied.

The fact that Google is choosing to pay the fines instead of comply tells us that this is a rubicon it simply will not cross. It also tells us that this is the right regulatory mechanism to extract the most value from Google for publishers.

Given we know it would cut news entirely from its products instead of negotiate over the use of content in search, the question becomes how valuable is news to Google? And therefore, how much is it prepared to pay publishers to keep them on the platform?

Clearly, given the scale of the fines it has borne, the answer is substantially more than the amounts being paid under the EU/UK Showcase deals. So, when the new regime comes into force here in the UK, it seems highly likely that publishers will be able to force Google’s hand.

But they must do so cautiously. There is a route to a Google news blackout here – as was threatened in Australia and in Canada (and carried out in Spain) – and that’s in no-one’s interests.

Email pged@pressgazette.co.uk to point out mistakes, provide story tips or send in a letter for publication on our "Letters Page" blog

Select and enter your email address Weekly insight into the big strategic issues affecting the future of the news industry. Essential reading for media leaders every Thursday. Your morning brew of news about the world of news from Press Gazette and elsewhere in the media. Sent at around 10am UK time. Our weekly does of strategic insight about the future of news media aimed at US readers. A fortnightly update from the front-line of news and advertising. Aimed at marketers and those involved in the advertising industry.
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