The announcement on October 1 that Google will be paying $1 billion (over three years) to news publishers to create curated news content for Google News is a welcome sign that Google is finally starting to wake up and smell the coffee. Coming on top of its announcement in June that it would begin to license some content from news creators, the most recent move is an indication of a crack in Google’s usual strategy, which is to double down on existing positions backed by its deep pockets and an army of lawyers and lobbyists, combined with threats of abandoning a given market or service to put pressure on publishers to back off, or on the public to get their governments to back off.
Google’s “never give an inch” approach has been most evident in its fight with news creators over its practice of using news snippets (without permission or licensing) to attract viewers to news topics on its service. As it demonstrated in Spain and Germany a few years ago when authorities in those countries attempted to legislate revenue sharing arrangements between platforms and news publishers, Google has enormous if not monopoly power. At that time, Google simply shut down Google News in Spain, and in Germany removed from its news platform any news provider that did not agree to voluntarily give Google access to content without payment. Google’s retaliatory measures made it more difficult for consumers to access news content, impacting views on the publisher’s sites, and soon brought them to heel. France is the latest EU state to take on Google, as I wrote about back in April (“Holding Google to Account: France Takes A Stand”), using competition law to require it to enter into meaningful negotiations with publishers. So far it appears that those negotiations are going nowhere.
Australia is also trying to get its arms around the Google dominance problem with regard to news content and diversion of advertising revenues, rolling out a proposed News Media Bargaining Code to be administered by Australia’s competition authority, the Australian Competition and Consumer Commission (ACCC). In response, Google has mounted a scare campaign threatening that Australians could lose free search and privacy protections, as a way of getting consumers to pressure the government to back down. This has not gone down well “Down Under”, with strong reaction to what are being described as bullying tactics by Google.
Google’s trench warfare approach to negotiations and legal challenges was best illustrated by its unwillingness to comply with an injunction issued by the Supreme Court of British Columbia (BC) requiring it to delist from global search results listings for a rogue company that had wilfully violated the intellectual property of another Canadian company. Google appealed that decision all the way to the Supreme Court of Canada (Google v Equustek) and lost. Google then tried an end run on Canada’s Supreme Court by seeking to get the order invalidated in the United States (even though it was never intended to be made applicable in the US) and having succeeded in that ploy, it returned to the BC Court to get the original order withdrawn on the basis that the Canadian decision required it to violate US law. In fact there is no US law requiring Google to carry any given search listing, and the BC Court declined to vary its decision. I have documented Google’s legal shenanigans in several posts (here, here, here and here).
Another aspect of Google’s modus operandi that is relevant to the news content issue is its penchant for what is sometimes called “permissionless innovation”. This means helping yourself to “OPC” (other people’s content) without asking or paying and, if caught, trying to sort it out later. It is a variation on the old adage of “asking for forgiveness after rather than permission beforehand” except that Google’s variation on this is “claim fair use after rather than seeking permission (or licensing) beforehand”.
This is the tactic that it has used in its ongoing legal dispute with Oracle where Google has freely admitted that it helped itself to Oracle’s Java API (Application Program Interface) software code after it decided that it didn’t like Oracle’s licensing terms; it is now using every trick in the book to claim fair use. Google’s initial gambit that its use was “transformative and minimalist” was thrown out by the Federal Appeals Court. Now, in its Supreme Court appeal, Google is digging for other justifications such as the “merger doctrine”, i.e. Oracle’s code is so fundamental to the operation of the internet that it could not not use it. The fact that it (a) could have licensed it from Oracle and (b) there were other alternatives, such as developing its own code which Google opted not to do because to poach Oracle’s work was easier and quicker, does not strengthen Google’s case.
Google’s use of other people’s work in the area of news content is similar. Take it, and argue that this is actually good for the content provider, and when that doesn’t work, threaten to shut down listings. Anything to avoid paying someone else for the content they have created. Now, it appears, that is about to change.
It would be churlish of me to criticize Google’s apparent change of heart because the shift in attitude is something to be welcomed. However, one cannot but wonder what brought about this sudden conversion. Surely it was not that Sundar Pichai suddenly woke up one day remembering his old grand-dad reading the newspaper every day at breakfast, and having a sudden outpouring of sympathy for the plight of print media. More likely it was the mounting pressure on Google coming from many quarters, Germany, Brazil (where publishers’ objections to Google’s use of their material goes back to 2012 and earlier) France, Australia, the UK, Canada (as I wrote about a couple of weeks ago, here) and elsewhere. In Canada, the Speech from the Throne (SFT) on September 23 that laid out the government’s priorities for the new Parliamentary session noted that;
“Web giants are taking Canadians’ money while imposing their own priorities. Things must change, and will change. The Government will act to ensure their revenue is shared more fairly with our creators and media…”
Google has apparently taken note and Canada is among the first wave of countries to which Google will bring its new paid content formula. (Canada, Germany, Brazil, Argentina, the U.K. and Australia were the countries named). Not all the news industry is in raptures, however. The European Publishers Council is reported to have stated that;
“By launching a product, they can dictate terms and conditions, undermine legislation designed to create conditions for a fair negotiation, while claiming they are helping to fund news production”
In Canada, the major publishers represented by the industry association News Media Canada have been pushing the government to take action enabling them to negotiate content licensing deals with major platforms, and this no doubt was largely responsible for the language in the SFT quoted above. The government may choose to approach the issue through regulation, competition law or possibly copyright legislation, but it is clear that Google has now decided to move pre-emptively. To date, however, the only two media organizations listed on the Google Canada blogsite are two small, virtually unknown pure play digital outlets, Narcity Media and Village Media. In Germany, Google has got Der Spiegel onside. In Canada, they will need to show that outlets like the Globe and Mail, Toronto Star, Postmedia, Le Soleil, La Presse and so on are on board if they are to avoid a day of reckoning. So far that hasn’t happened.
What is noteworthy, because of its absence, is any mention in Google’s announcement of US media. Google is subject to lots of scrutiny these days in the US, especially in the anti-trust area. US publishers are no more enamoured with Google’s business model than publishers in other countries, and I can only assume that the absence of any mention of the US in Google’s current plans is because negotiations are ongoing. In fact, with the exception of Der Spiegel and Stern in Germany and Folha de Sao Paolo in Brazil, there is a distinct lack of buy-in by mainstream media anywhere to Google’s initiative.
Nevertheless, what is important is that Google is starting to get the message. After seeing the sticks that several governments are brandishing, or threatening to brandish, Google has reached into its deep pockets and pulled out a $330 million per year carrot. Will it be enough to stem the tide, or is it too little too late? Whatever the outcome, I think it is fair to say that Google just blinked. This doesn’t happen very often and may be a welcome sign that things in the digital world are starting to change for content creators.
© Hugh Stephens 2020. All Rights Reserved.
Hugh – thank you for this – most helpful. One question: does CUSMA in your view constrain Canada’s policy options when dealing with Google and others? Dan Ciuriak in his writings for CD Howe thinks it does – or at least that putting in any provisions on how we deal with the big platform companies is premature given the changing technology. I did disagree with extending copyright to life + 70 years – I can’t see any economic reason for doing this though from US point of view it further enriches the media giants like Disney. A US demand that our negotiators did not feel strongly about? David
David, I think there are ways of dealing with the big web platforms that will not be offside CUSMA. It has to be done carefully to be of general application. Our policy makers are surely up to the task of identifying the right policy tools.
Extending the term of copyright protection in Canada will benefit Canadian creators as well as creators in other jurisdictions, including the US, and put Canada on an equal footing with most of the developed world (US, UK, EU, Australia etc) that have a life plus 70 term. This will also extend that additional benefit to Canadian creators in the EU market where the Europeans apply reciprocal treatment. In the US, Canadian creators got longer protection than Canada offered to US copyright holders. which hardly seems fair. The extension in Canada when it comes into effect will apply to everyone, not just US copyright holders. I think it was an easy concession for Canadian negotiators because it brought Canada into line with most of its trading partners, the sort of harmonization they were seeking. Despite claims to the contrary, no evidence has been produced that this will lead to an outflow of royalties from Canada. It is probably a wash.