Google plans to appeal a €500 million fine ($591 million) imposed by France’s Competition Authority, reports Reuters. Google was fined in July 2021 for failing to negotiate in good faith with publishers and news agencies as ordered in an April 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.
Abuse of dominant market position
In April 2020, 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 with publishers and news agencies. The Authority ordered Google to present an offer of remuneration or be potentially fined up to €900,000 (approximately $1 million) per day. That fine came to fruition in July, and it is the largest in the Authority’s history.
Google, however, disputes the antitrust watchdog’s assertions that it failed to act in good faith to comply with the new law. Reuters reports that Google is appealing the fine, though they have to pay it regardless. A Paris court of appeal will rule on whether the fine is just. It is not known how long an appeal might take.
‘Fine is disproportionate’
“We disagree with a number of legal elements and believe that the fine is disproportionate to our efforts to reach an agreement and comply with the new law,” said Sebastien Missoffe, head of Google France.
“We continue to work hard to resolve this case and put deals in place. This includes expanding offers to 1,200 publishers, clarifying aspects of our contracts, and sharing more data as requested by the French Competition Authority,” Misofffe added.
Though Google said it has been negotiating with publishers and news agencies regarding appropriate remuneration, the Authority doesn’t believe Google has gone far enough. France 24 reports that the Authority claims that Google’s behavior shows a “deliberate, elaborate and systematic lack of respect” and that the tech giant is not negotiating in good faith. Instead, Google is using their dominant market power to garner about 90% of the general search services market, giving them an unfair advantage against potential competitors. The Authority is trying to right that perceived wrong.
For some companies, a €500 million fine, or $591 million, would be huge. For Alphabet and Google, this is another hand slap, though the sting will grow stronger the longer this battle continues. In the second quarter of 2021, which ended on June 30, 2021, Alphabet reported $61.9 billion in revenue, a 62% increase year-over-year. A $591 million fine is nothing to them. For Google to really take notice, the Authority and other regulators in the European Union and the United States need to take swift, decisive action to balance the scales of equity between Google and the publishers and news agencies from whom they are benefiting.