Main Highlights
- France fined Google €500 million after discovering major flaws in how it negotiated with publishers to remunerate them for reuse of their content
- The half-billion-euro fine is also notable for being significantly higher than Google had previously agreed to pay French publishers, according to Reuters
- Initially, Google attempted to avoid the neighboring news right by ceasing to display snippets of content alongside links in Google News in France
- Additional fines of up to €900,000 per day could be levied against Google if it continues to violate the watchdog’s injunctions and fails to provide all required information to publishers within a new two-month deadline
France fined Google €500 million after discovering major flaws in how it negotiated with publishers to remunerate them for reuse of their content, as required by a pan-EU reform of digital copyright law that extended neighboring rights to news snippets.
The fine is significant because it represents more than half of the $1 billion news licensing pot announced by Google last October when it stated that it would pay news publishers “to create and curate high-quality content” to appear on its platforms.
At the time, the move appeared to be aimed at reducing Google’s exposure to legal mandates to pay publishers for content reuse by pressuring them to accept commercial terms that give it broad rights to “showcase” their content. The French watchdog has now condemned and sanctioned the practice.
The half-billion-euro fine is also notable for being significantly higher than Google had previously agreed to pay French publishers, according to Reuters, which reported in February that the tech giant had inked a deal with a group of 121 publishers to pay them only $76M over three years.
The French competition authority announced today that it is sanctioning Google with €500 million ($592 million) for failing to comply with a number of injunctions related to its earlier, April 2020 decision, in which the watchdog ordered Google to negotiate in good faith with publishers to compensate them for displaying their protected content.
Watchdog’s Injunctions
Initially, Google attempted to avoid the neighboring news right by ceasing to display snippets of content alongside links in Google News in France. However, the watchdog determined that this was likely abuse of Google’s dominant position and ordered Google to stop skirting the law and negotiate with publishers to pay for the reuse in good faith.
The Autorité de la Concurrence is dissatisfied with Google’s approach. A number of publishers complained to it that the negotiations were not conducted in good faith and that Google failed to provide them with critical information needed to inform payments.
The Syndicate of Magazine Press Publishers (SEPM), the Alliance de Presse d’Information Générale (APIG), and Agence France Presse (AFP) filed complaints in August/September 2020, triggering the watchdog’s investigation and today’s announcement of a major penalty.
Additional fines of up to €900,000 per day could be levied against Google if it continues to violate the watchdog’s injunctions and fails to provide all required information to publishers within a new two-month deadline.
The Autorité stated in a press release detailing its investigation that Google sought to unilaterally impose its global news licensing product, aka ‘Showcase,’ under a partnership the tech giant calls Publisher Curated News, which is currently in negotiations with publishers, pushing for the legal neighboring right to be incorporated as “an ancillary component with no separate financial valuation.”
According to the watchdog’s investigation, publishers’ requests to separate copyright remuneration negotiations were denied. It also found that Google “unjustifiably” limited the scope of negotiations regarding the scope of income derived from the display of protected news content, with Google telling publishers that only advertising income from Google Search pages posting news content should be considered in determining the level of remuneration due.
This exclusion of income from other Google services, as well as all indirect income related to this content, was found by the authority to be in violation of copyright law and its previous compliance order.
Google also “deliberately circumscribed” the scope of the law on neighboring rights by excluding titles without a Political and General Information certificate, which the watchdog described as a “bad faith” interpretation of the intellectual property code.
It also discovered that the tech giant sought to exclude press agencies from remuneration related to their content when used by third-party publishers, citing this as another violation of its April 2020 decision and adding, “The French legislator has been very explicit on the need to include press agencies.”
In yet another finding, it stated that Google had only provided publishers with “partial” and “insufficient” information for a “transparency assessment of remuneration due,” and alleged the tech behemoth of delaying until just a few days before the injunction deadline to provide it, making it “late” as well.
The authority’s investigation focuses on compliance issues with another injunction related to an obligation of neutrality in how protected content is presented on Google’s platforms, with the watchdog writing: “Google’s strategy has thus strongly encouraged publishers to accept the contractual conditions of the Showcase service and to renounce negotiations relating to specific content. As a result, Google cannot claim that it has taken the necessary precautions to prevent its negotiations from affecting the presentation of protected content in its services.”
Another injunction sought to prevent Google from attempting to leverage its dominance by offsetting payments made to publishers for adjacent rights.
In this regard, the watchdog criticized its approach, noting that its Showcase product requires publishers to make “large extracts” and even entire articles available for display on Google’s platforms, rather than just snippets.
The authority accuses Google of “a deliberate, elaborate, and systematic strategy of non-compliance” and of continuing an already years-long “opposition strategy” to the principle of neighboring rights; and then, after they’d been baked into EU and French law, of attempting to “minimize the concrete scope of those rights.”
“The sanction of 500 million euros takes into account the exceptional gravity of the violations observed, as well as the fact that Google’s behavior has further delayed the proper application of the law on neighboring rights, which aimed to better account for the value of content from publishers and news agencies included on the platforms. “The Authority will be extremely vigilant about the correct application of its decision, as non-execution can now result in periodic penalty payments,” said the watchdog’s president, Isabelle de Silva, in a statement (which we translated from French).
The half-billion-euro fine and the warning to Google that its practices will result in daily fines if it continues to ignore the injunctions put the tech giant on notice that the details of commercial deals will not be allowed to slip through the cracks in France.
Any further attempts to shape a self-serving version of ‘compliance’ are likely to be sanctioned by the watchdog, which recently imposed a number of interoperability requirements on Google’s ad business (and slapped it with a $268M fine), also in response to publisher complaints.
Google’s Verdicts
Google expressed disappointment with the outcome of the investigation in a statement in response to the authority’s sanction, claiming to have acted in good faith throughout negotiations with publishers:
“We are extremely disappointed by this decision; we have acted in good faith throughout the entire process.” The fine disregard our efforts to reach an agreement as well as the reality of how news works on our platforms.
Google is the only company that has announced agreements on neighboring rights so far. We are also about to finalize an agreement with AFP that includes a global licensing agreement as well as compensation for their adjacent rights for their press publications.”
Google also stated that it is confident that it will be able to sign a global licensing agreement with Agence France Presse, which will include remuneration for neighboring rights for press publications from the agency.
“Our goal remains the same: we want to turn the page with a definitive agreement,” it added, adding that it would take the French Competition Authority’s “feedback into consideration and adapt our offers,” and that “we are already engaging with press publishers and agencies beyond IPG, by covering publications that are recognized by the CPPAP as ‘online press services,’ and we reiterate our offer.”
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