Google has been fined $593 million (€500,000,000) by France’s Competition Authority for failing to negotiate in good faith with publishers and news agencies. In an April 9, 2020 ruling, the Authority required Alphabet-owned Google to fairly compensate publishers and news agencies for displaying article snippets, photos and videos in Google News search results. Google’s unapproved and unpaid use of publisher and news agency content is a violation of a new European Union copyright directive.
The Authority ruled that Google’s actions were an abuse of their dominant market position and economic dependence, and they gave Google three months to negotiate an equitable agreement. The Authority ordered Google to present an offer of remuneration to publishers or be potentially fined up to €900,000 per day. CNBC reports that this is the largest fine the Authority has ever imposed for failing to comply with a ruling.
Emergency measures effective in April
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’s side
At that time, Google agreed to comply with the Authority’s order and said it was already in talks with publishers, said 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.
A spokesperson for Google told CNBC that it was very disappointed in the Authority’s ruling.
“We have acted I good faith throughout the entire process. The fine ignores our efforts to reach an agreement, and the reality of how news works on our platforms,” the spokesperson said. “To date, Google is the only company to announce agreements on neighboring rights. We are also about to finalize an agreement with AFP that includes a global licensing agreement, as well as the remuneration of their neighboring rights for their press publications.”
Media Post reports that Google has reached agreements with some French publishers including Le Monde and Le Figaro.
Insider Take
A $591 million dollar, or €500,000,000 fine might be a huge deal to some companies, but it is merely a slap on the wrist for Alphabet-owned Google. In the first quarter of 2021, Alphabet reported total revenue of $55.3 billion. Net income for the quarter ended March 31, 2021 was $17.9 billion, or $26.29 diluted earnings per share. The $593 million fine equates to about 3.31% of Google’s earnings from the first quarter and an infinitesimal percentage of the company’s total assets of $327.1 billion, as of March 31, 2021.
We think the fine might nudge Google in the right direction, but it won’t hurt them much financially. We can only hope that Google recognizes it is violating European copyright laws by using content without permission and that it makes things right in France, as well as other European countries who could come after Google next.
