Opinion

Published

Google holds its hands up in bid to win over European publishers

7 Mins

The European Union raised concerns that Google had been distorting internet search results in favour of its Google Shopping service, while an antitrust probe into its Android mobile operating system is also underway.

It now looks like the company is attempting to peter out another of its ongoing battles, with the announcement that it’s pledging €150m to European news publishers and journalism-focused startups over the next three years. Those involved include The Financial Times, the Guardian, the German Die Zeit, Spain’s El Pais and the Netherlands’ NRC Media.

Notably absent are media groups that have been critical of Google, including Rupert Murdoch’s News Corp, though Axel Springer group is also currently not taking part.

Publishers have been complaining for a while about the wide-ranging impact that Google’s use of their content has. The European Union is looking into whether Google has abused a 90 per cent market share in search – illegally promoting its other products and services. While this share of activity doesn’t directly affect news, it’s evidently a sensitive topic, with implications elsewhere.

The move, titled the “Digital News Initiative”, will involve a partnership with eight publishers (though Google has said others are welcome), to establish a working group to focus on the innovation fund over three years, along with product development – the key area of interest for publishers. The Guardian said that Google has promised this will aim to “increase revenue, traffic and audience engagement”.

Google’s head of strategic relationships in Europe, Carlo D’Asaro Biondo, discussed the development in a speech at the Financial Times Digital Media conference, commenting: “We are determined to play our part in ongoing dialogue and business partnership with the aim of building something more sustainable.”

It’s not the first time the US company has ruffled publishers’ feathers and made efforts to address the dispute. In 2013, Google agreed to implement a similar fund to support French media organisations, following a disagreement about its right to show headlines and text removed from their sites on Google News.

Two months of negotiations resulted in the creation of a €60m fund aiming to improve the French media organisations’ internet operations. At the time, the French government threatened to tax the revenue Google made from posting ads alongside the results, and Google then said it might stop indexing French papers’ articles. As well as creating the Digital Publishing Innovation Fund, Google agreed to allow French media access to its advertising platforms at a reduced cost – a compromise allowing it to avoid paying an ongoing licensing fee.

Ian Maude, head of internet at Enders Analysis said then that the agreement could be an indicator of future relationship-building between Google and publishers. “It appears Google has opened the door to other countries’ newspapers doing the same thing. This sets a precedent which other publishers may pursue in their own negotiations.”

Interestingly, during D’Asaro Biondo’s speech he touched on the acknowledgement that Google News had made mistakes, and the company was now seeking a less turbulent relationship with those who could feel that Google is taking their content, displaying it freely and stealing their advertisers in the process. “Google has always wanted to be a friend and partner to the news industry. I think we have to accept we have made some mistakes along the way,” D’Asaro Biondo added.

Read more on Google:

While Google News was apparently launched as a “product for the industry”, D’Asaro Biondo admitted that there was “tension all over Europe”, with publishers concerned about their “ongoing ability to fund great journalism”. It’s potential was clear, but so too was its negative impact – advertisers would transfer their budgets from newspapers to search, with readers unlikely to pay for news they read online.

The recent statement released by the EU’s competition commissioner Margrethe Vestager said that she was “concerned” that Google had given itself an “unfair advantage”, and if the investigation confirmed their concerns, would mean the company would have to “change the way it does business in Europe”. Listening to D’Asaro Biondo’s speech in London discussing the new initiative and lessons learnt from Google News, it seems, that on some fronts at least, the company is already taking steps to address this.

“The feedback has been that Google can be complicated to work with and sometimes unpredictable. We intend to change that and it’s my job to change that,” he said. To have a real, lasting effect, it would seem the part of the project working with European publishers to discuss ways to boost revenues via the use of ads, apps, paywalls and analytics, would need to have a wider rollout.

Additionally, those receiving funding from Google may well need to reassure readers that coverage of the company will remain normal.

Tony Danker, international director of Guardian News & Media, has said the publisher is intrigued by the initiative but aware of the caveats involved. “We see its real potential. But that potential depends on whether, having been conceived by Google in Europe, it is now adopted by Google in Mountain View,” he said. “The test of success is whether it leads to meaningful change to ensure journalism flourishes in the digital age.”

Images: Shutterstock

Share this story

The definitive guide on the best approach to corporate hospitality
The European VC investment trends that took place in Q1 2015
Send this to a friend