Google Resolves France Media Spat With €60m Fund

Google has agreed to set up a €60m (£52m) fund to help French news organisations develop their online presence, in a deal designed to avoid legislation that could have seen Google obliged to pay to include links in its Google News service.

The arrangement was announced on Friday evening at the Elysée palace in Paris after a meeting between Google chairman Eric Schmidt and French president François Hollande.

Advertising

Aside from the fund, Google said it will also work with French news media to “help increase their online revenues using our advertising technology”, including AdSense and AdMob, Schmidt said in a blog post on Friday. Details of the advertising deal remained confidential, according to negotiators.

French news organisations will be able to apply to Google’s Digital Publishing Innovation Fund for funding for specific projects that could “support transformative digital publishing initiatives for French readers”, Schmidt stated. The fund is expected to cover a period of three to five years.

News media organisations in countries including France, Belgium, Germany and Italy have challenged Google’s use of their content (in particuar the use of “snippets”) in services such as Google News, and have pushed for legislation that would extend copyright to cover headlines and news excerpts. In response Google threatened to stop indexing these organisations’ news content, cutting off a major source of Internet traffic.

The deal follows three months of negotiations under the observation of government-appointed mediator Marc Schwartz. Hollande had originally set a deadline of the end of 2012 for an arrangement to be reached, but extended this by a month.

Monetisation

“This is the first time press content has been monetised aside from newspaper sales or advertising space sales,” Philippe Jannet, a consultant and former head of Le Monde Interactif, told AFP. “This offers a third means of support for the press.”

Google reached a similar deal in Belgium in December but continues to face conflict with press organisations in countries including Germany, Italy, Portugal and Switzerland.

The German government is currently pursuing legislation that could force online news aggregators such as Google to ask permission to publish links and excerpts, spurring a publicity campaign by Google that argues such a law could end easy access to information on the web.

On Sunday the German association of newspaper publishers (BDZV) rejected a settlement with Google on the model of the French deal, arguing that France’s arrangement only refers to Google, leaving media organisations no way of approaching other web-based aggregators.

“The threat of a legal solution is thus missing – the publishers can in the future only hope for success via negotiation,” a BDZV spokeswoman told German news agency DAPD on Sunday.

Tax issues

Google faces a number of other challenging issues with European governments, including disputes over the small amount of tax it pays relative to its advertising income. In France, for instance, the company is estimated to have taken in between 1.25bn and 1.4bn euros, while paying 5 million euros of tax.

The search engine also faces a European Commission investigation of its business practices that could result in up to $4bn in fines. Google last week submitted proposals to the EC aimed at resolving the investigation, which the EC said on Friday it was “analysing”.

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