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Google under assault in Europe from new direction

Stan Ward

Stan Ward

August 31, 2015

Google is under assault again in Europe, this time primarily from print publishers aiming to survive the demise of the print industry by making forays into the digital world.  If this was American football, they would be flagged for piling-on (or possibly red-carded in the European version). Still reeling from the punches of the EC’s Margrethe Vestager, the American tech giant must be wondering from where the next attack will come from.

To an objective onlooker, this is beginning to bear the hallmarks of a vendetta against not only Google, but American enterprise in general. In a companion piece written the other day, you get a sense of the ire and frustration felt by Google to the political pasting it is receiving from all quarters.

The problem: Google’s revenues are outstripping the Continent’s old media (influential newspaper and magazine publishers) much to their dismay and chagrin, leading them to emerge as among Google’s most persistent adversaries.

Over the last five years the print media in Europe has overseen a whopping 21 percent decline in circulation, versus 8.5 percent in the US, according to knowledgeable industry sources. The discrepancy is likely due to the disparate languages which comprise the EU, along with its fragmented borders, international expansion, and because revenue enhancements are precluded.

But it is no secret that print media is a darling of politicians of all stripes, who dance to its tune. The affection politicians have for these dinosaurs (and probably with a wink and a nod to their financial support) has caused European politicians have fallen into line to oppose Google.

Their primary target is copyright law, but don’t expect the mugging to stop there. “Newspapers help set the agenda, so politicians have to listen to them,” said Julia Reda, a German politician who helped push recent digital copyright proposals through the European Parliament. Like taxing tourists rather than residents, Google presents a juicy revenue-raising prospect for politicians.

“Recently, several trade associations, including the Federation of European Publishers, have met with Friedrich Wenzel Bulst, a top European antitrust official, and other regulators to also push for stricter, Europe-wide limits on how Google and others may use publishers’ online content. Many publishers are pushing the rules as part of an expected overhaul of copyright policy from Günther Oettinger, a European commissioner with ties to Germany’s publishing industry, by the end of the year.”

The outcome could see Google forced to pay newspaper and magazine moguls whenever links to their content are shown on Google’s aggregation sites. Hence, monetizing content is the goal, with Google having the big bullseye on its back!

The print publishers have resorted to lobbying vigorously. Though the sums are difficult to determine, it has been revealed that the European Publishers Council spent more than $500,000. The effort is boosted by both written and personal appeals to European Union officials and national lawmakers and encompasses more than 20 countries. Christoph Keese, executive vice president at Axel Springer and a vocal critic of Google notes that,

This is not about protecting the legacy business. It is about ensuring there is a level playing field and making sure that international companies respect European laws.

Google is not so certain, and has launched countermeasures which include lobbying efforts and personal appeals of its own, as well as creating a $172 million fund geared to helping publishers adapt to the digital world.

In addition, Google has been successful in funneling much online traffic to newspapers via myriad links, which have generated significant revenue for them. As Google’s senior vice president for corporate development, David C. Drummond, observed to an audience of media executives in Barcelona in June,

We recognize that technology companies and news organizations are part of the same information ecosystem. We are committed to playing our part.”

Google’s largess, however well-intentioned, represents an acknowledgement that the landscape of opposition has noticeably shifted from rivals such as Microsoft to the print publishing empire, who oppose any settlement with Google that would amount to a slap on the wrist.

Never at a loss for a quip, Rupert Murdoch joined the fray against Google, calling it a “platform for piracy.” Being a pre-eminent media figure in print and electronic circles on several continents, he garners his fair share of attention and influence. His addition to the choir of traditional European print magnates may have Google singing out of the same hymn book if their lobbying is successful.

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