French regulators are requiring Alphabet-owned Google to fairly compensate publishers and news agencies for displaying article snippets, photos and videos in Google News search results, reports Bloomberg. The accusation is that Google’s behavior constitutes “an abuse of a dominant position, as well as an abuse of economic dependence.” Specifically, Google created unfair trading conditions, circumvented the law and discriminated against publishers.

In a recent ruling by Autorité de la concurrence (the Authority), Google has three months to conduct good faith negotiations with publishers and news agencies on the “remuneration for the resumption of their protected content.” Any payment to the publishers and news agencies must be retroactive to October 24, 2019.

“The Authority considers that Google is likely to have abused its dominant position in the general search services market by imposing unfair trading conditions on publishers and news agencies,” said Autorité de la concurrence in its April 9, 2020 ruling.

“The Competition Authority today orders emergency measures in the framework of the provisional measures procedure. The Authority considered that Google’s practices on the occasion of the entry into force of the law on neighboring rights were likely to constitute an abuse of a dominant position, and brought serious and immediate damage to the press sector,” the Authority added.

The Authority estimates that Google’s market share of France’s general search services market is close to 90%. This makes it difficult for other players to compete. The Authority also said that, because of Google’s dominance in the search engine market, there are strong barriers to entry and expansion into the market. Google has an unfair advantage, and it must, therefore, pay to play.

“Google’s practices caused a serious and immediate damage to the press sector, while the economic situation of publishers and press agencies is also fragile, and the law was on the contrary aimed at improving the conditions of remuneration they derive content produced by journalists,” the Authority said.

“…the Authority notes the existence of a serious and immediate attack on the press sector, resulting from the behavior of Google, which, in a context of major crisis in the sector, deprives publishers and press agencies of a resource considered by the legislator as vital for the sustainability of their activities, and this at the crucial moment of the entry into force of the law. Consequently, the Authority has issued several injunctions as a matter of urgency,” said the Authority.

During the negotiation period, the Authority announced the following emergency measures:

• Google must conduct good faith negotiations within three months to discuss the display of content, appropriate compensation and recovery of compensation that should have been paid previously.
• Google must maintain the display of text extracts, photographs and videos chosen by the publisher or news agency.
• Google is required to send monthly reports to the Authority regarding its procedures for implementing the proposed agreement.
• The protective measures will remain in place until the Authority accepts the forthcoming agreement between Google and publishers and news agencies.

Google has agreed to comply with the Authority’s order and says it is already in talks with publishers, reports Bloomberg.

“Since the European copyright law came into force in France last year, we have been engaging with publishers to increase our support and investment in news,” Richard Gingras of Google said in a statement.

Insider Take:

This is only one of many “hand slaps” Google has received from regulatory authorities in Europe and the United States. One notable case came a year ago when the European Commission fined Google 1.49 billion euros (approximately $1.7 billion) for violating the European Union’s antitrust rules. This sum is peanuts to Google (and Alphabet). For 2019, Google reported total revenue of $39.3 billion, a 22% increase year over year, and net income of $8.95 billion. Whatever arrangement Google works out with French publishers and news agencies is unlikely to make a dent in Google’s own wallet. We’d like to think that Google is acting in good faith, but the tech giant can afford not to when fines and penalties are not sizable enough to be meaningful.