Google offers to not put News Showcase in search results in Germany as antitrust investigation progresses – Techdoxx

Deepak Gupta January 12, 2022
Updated 2022/01/12 at 2:42 PM

In the latest regulatory issue for Big Tech in Europe, Google is trying to resolve a German antitrust investigation into its news licensing product by offering not to expand the display of News Showcase’s “story boards” in general search results.

The German Federal Cartel Office (FCO) announced today that the company has proposed a number of measures in response to its antitrust concerns – which also include taking steps to put clear blue water between News Showcase contracts and ongoing negotiations with publishers related to copyright licensing obligations around so-called neighboring rights. for news.

Under EU and German law, Google must pay copyright fees to news publishers to display snippets of their content – ​​following a 2019 EU copyright reform that was transposed into German law in May 2019. 2021.

Unilateral attempts by German lawmakers – about a decade ago – to force Google to pay licensing fees to local publishers to display snippets of their content on Google News were easily thwarted by the tech giant switching to an opt-in model for the aggregator. in the market .

Ultimately, it took a pan-EU directive — combined with local antitrust intervention — to force Google’s hand on this issue, so it can’t simply change the way it operates to circumvent payments.

While the tech giant’s compliance with EU copyright law remains a work in progress, to say the least. (Its activity in the region on this front has already attracted a fine of more than half a billion dollars in France, for example, where Google’s approach to news licensing also remains under regulatory scrutiny.)

Germany is also looking into Google’s negotiations with local news publishers — as well as, starting today, extracting operational concessions on how News Showcase operates.

The FCO said it is concerned that if Google integrates News Showcase into overall search results, as Google has previously said it intends to do, it will result in the company preferring its own services or “preventing services offered by competing third parties.”

Other concerns center on whether News Showcase’s contractual terms “excessively disadvantage” participating publishers — including making it “disproportionately difficult for them to enforce their general ancillary copyright when participating in Google News Showcase.”

The regulator also said it is reviewing Google’s conditions for access to Google’s News Showcase service – to examine whether non-discriminatory access is guaranteed for publishers.

It’s probably no accident that the FCO last week confirmed its ability to apply special measures to Google’s business, under powers to take on digital giants that were passed by local lawmakers early last year. This shortens the time frame for regulatory action and reduces the space Google has to try to circumvent any FCO requests.

Similar copyright reforms focused on Big Tech are also underway in the UK. While ex ante rules for gatekeeping giants are on their way to being adopted at EU level (aka Digital Markets Act). Therefore, the operating leash for Big Tech in Europe should only shorten.

In addition to offering not to expand the display of licensed content for general search results in Germany, the FCO said today that Google “has already changed some of the practices under review and stated its willingness to address any remaining ambiguities and concerns by modifying the Showcase contracts and provision. of clarification”.

“In particular, Showcase contracts must be clearly separated from ongoing negotiations on other ancillary copyright payments between Google and publishers or their collecting societies,” he added.

The tech giant announced the global News Showcase product in October 2020 – when it said it would pay participating publishers $1 billion collectively to license their news content to appear on so-called “story boards” (see below for examples of Google Product Marketing) in all Google products.

Screenshot: Natasha Lomas/Ploonge

At the time, Google was facing increasing legal requirements in several jurisdictions regarding remuneration for displaying news content (Australia created its own legislative model targeting Google and Facebook to pay for news reuse in August 2020, for example).

So the News Showcase move has always felt like a blunt attempt by Google to limit an impending revenue hit while leveraging its market power to generate as many upsides as possible for its monetizing Internet content business. adverts.

The trade deals struck for News Showcase gave Google the chance to offer a carrot on licensing payments and play publishers against each other — pressuring them to agree to its terms and lower legally-mandated licensing fees.

Initially, Google said that content licensed under News Showcase would appear in story boards in the Google News app on mobile devices. It went on to expand where content from participating publishers appeared to include its desktop news aggregator product and a personalized mobile content feed called Google Discover.

Evidently, it hoped to be able to further expand where in all of its online real estate licensed content appears – including adding News Showcase to search results.

However, in Europe, where Google’s search engine remains dominant, its plan quickly got it into regulatory trouble over competition concerns.

As its name suggests, the News Showcase product offers the prospect of increased visibility for participating publishers, presenting their content to Google users across multiple touchpoints, including giving mobile users the ability to follow publishers so that more of your content is targeted at feeds. So there is a strong incentive for publishers to strike deals with Google – giving it the upper hand over content licensing negotiations.

For example, publishers may feel incentivized to strike deals with Google for News Showcase in order not to miss the prospect of extra traffic being sent to them (especially if competitors have already struck deals) – putting commercial pressure on them to agree to broad terms. license fees that may waive or reduce copyright-based licensing fees.

The problem for Google is that European competition regulators were not fooled by its attempt to use a proprietary news display product and commercial terms to tarnish copyright compliance by combining News Showcase trades and contacts with legally binding licensing fees. required – and instead listened to complaints from publishers that Google is not playing fair. (The FCO investigation, for example, was opened after a complaint filed by collection society Corint Media.)

Issuing a heavy sanction last summer, the French competition watchdog said Google had tried to unilaterally impose its global news licensing product in negotiations with publishers — pushing for the legal neighbor right to be incorporated as “an ancillary component without financial evaluation.” separated”.

Its investigation continues — but it has already given Google a $592 million fine for violating a previous order.

Germany has yet to issue any sanctions, but with the FCO brimming with new powers to fight abusive digital giants, the threat is clearly there. Hence Google’s enthusiastic offer of tweaks to how the News Showcase product operates in Germany (the FCO only started probing the T&Cs last summer).

Google’s dominance in Europe in the general search market means that the company has faced a number of anti-rust measures in recent years – both on a European and national level. But it’s fair to say that EU Member States’ competition watchdogs were the quickest to respond to news publishers’ concerns.

Germany was one of the first markets to receive the News Showcase, which likely fueled the FCO’s relatively quick scrutiny of the product. While France has been quicker to transpose EU copyright reform into national law – and its competition watchdog has focused intensely on Google’s compliance with the neighboring law requirement and the details of how it negotiated fees with news publishers about reusing their content.

In December, the French regulator announced that Google had made a series of commitments around the good faith negotiation – which it proposed to apply for a period of five years.

France’s watchdog is consulting Google’s proposal until the end of this month – after which it will make a decision on whether to accept them or require additional measures.

The German FCO is now also looking locally at Google’s operational offerings around News Showcase.

In a statement, President Andreas Mundt said: “Google has proposed measures to address our competition concerns related to the Google News Showcase. The company no longer plans to include Showcase content in overall search results. The conditions of participation in the Google News Showcase are not intended to prevent publishers from applying their general ancillary copyrights. Access to Google News Showcase is based on objective criteria. We rely on the assessment of affected market players to ensure that the measures proposed by Google are effective. Given the wide range of interests that publishers may have, we are conducting broader industry consultations.”

He further noted that the regulator is keeping an eye on how Google negotiates with publishers over copyright fees, adding: “In parallel with the Google News Showcase process, we are closely monitoring negotiations on ancillary copyright fees.”

In yet another recent regulatory intervention triggered by complaints from publishers (and adtech), Google’s plan to discontinue support for third-party tracking cookies and switch to a set of new ad-targeting technologies (aka Privacy Sandbox) is in the works. under close supervision by the UK competition watchdog – and that process has also led Google to propose a series of compromises in order to go ahead.

Separately, last summer, France’s competition watchdog levied a $268 million fine on Google for preferring its adtech — leading to yet another behavioral offering from the tech giant, in this case a set of interoperability compromises.

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