The French Competition Authority (FCA) has slapped Google with a record €500 million ($589 million) fine for failing to comply with an April 2020 order to bargain reasonably with news publishers over the use and payment of their articles and other information (via CNBC).
With the passage of the European Union’s controversial Copyright Directive, which was adopted by France in 2019 and generally tries to shift power toward content producers rather than platforms that reshare their work, news publishers gained the ability to request payment for the use of their content on third-party platforms. Article 11 of the directive, dubbed the “Link Tax,” allows publishers to charge for fragments of articles and other information that are linked in places like Google News.
Google experimented with blank content previews and no search descriptions in the run-up to the directive’s passage as a type of veiled threat of what it would be obliged to do in a post-Article 11 future. The FCA deemed this an abuse of Google’s search monopoly and ordered the business to follow the regulations and negotiate for the right to display articles. Those talks don’t appear to have gone well.
According to the FCA, Google pressured publishers to focus their deals on News Showcase, a product that doesn’t cover all of Google’s platforms where publishers’ content can appear. Second, the FCA says that the corporation is unwilling to share money from ad sales with other locations where publisher content may appear, such as the links and search descriptions that display when you pull up search results. Both issues were supposed to be addressed in the FCA’s big-picture order to negotiate “the reimbursement due to [publishers] under the Neighbouring Rights Act for the resumption of their protected content,” but Google doesn’t seem to agree.
Google told CNBC that it was about to execute an arrangement with Agence France-Presse (AFP), France’s cooperative news wire service, “that includes a global license agreement, as well as the compensation of their Neighboring Rights for their press publications,” in response to the penalties. It appears that this is more than just a case of bad timing, but Google is sticking to its guns in this statement to The Verge, stating that it doesn’t make much money from news search results in the first place:
While we are dedicated to following the Copyright Directive and the FCA’s requirements, this fine ignores the extensive efforts we have taken to achieve agreements, as well as the reality of how news is delivered on our platforms: Last year, Google’s revenue-not-profit from clicks on ads against possible news-related queries in France was less than 5 million Euros. We want to find a solution and achieve firm agreements, but this fine is disproportionately high in comparison to the amount of money we generate from news, and we will carefully consider the choice.
Google has two months to respond to the FCA’s concerns by paying publishers money for the usage of “restricted content.” If it doesn’t, it will be fined an additional €900,00 ($1 million) per day on top of its already massive sum.