Google's deal with the French press: a major event for the future of news | INA Global

Google's deal with the French press: a major event for the future of news

Article  by  Nikos SMYRNAIOS  •  Published 14.03.2013  •  Updated 18.03.2013
French press publishers and Google are both competitors and partners.

Summary

The agreement between Google and French press publishers signed with great ceremony by François Hollande and Eric Schmidt at the Élysée Palace on 1 February is a major event for the future of online news. The agreement comprises two parts: the creation of a support fund for news sites and the setting up of a strong business partnership. To put it plainly, Google is committed to directly funding some publishers and to offering them favourable conditions for selling their advertising space via its advertising sales divisions. The total amount that French publishers should enjoy is sixty million euros over three years. Prior to that, in December 2012, Google and French-speaking press publishers in Belgium reached a compromise regarding a dispute that had continued between them since 2006. The American company accepted to pay all legal costs incurred by the publishers and to pay them compensation, estimated to be five million euros.
 
These agreements in France and in Belgium create a new source of income for news websites at a time when they really need it. But, at the same time, they are making the publishers more dependent on this Californian multinational. How then should we interpret this agreement? 

The infomediation function of news

The online news sector, taken to mean the production and distribution of news via the internet, brings in companies – both upstream and downstream - whose job is to produce the physical and logical infrastructure of the network. These companies such as Google, Apple, Amazon and Facebook have gradually turned themselves into unavoidable crossing points, located between producers and content publishers on the one hand and the public on the other. They take over the selection, organisation, prioritisation and distribution of online news and help bring together fragmented demand and a diverse offer. This function is referred to as infomediation. In so doing, each party tries to obtain the best position in the battle to compete for the added value produced within the sector.
 
The technology-oriented companies have in common that they do not produce original cultural and media products for the general public. In other words, they are not subject to the special restrictions connected with managing the creative breeding ground of the culture and media industries: journalists, directors, writers, photographers, artists, etc.; but their platforms, portals, algorithms and associated services can only operate if they are supplied with quality content. This explains the ambiguous nature of the relations that these technology companies set up with publishers, upon which they try to impose technical standards and the sharing of financial resources, while endeavouring to seduce them. 
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Recognition of mutual dependence

The agreement of 1 February is interesting in several ways. First, it marks a significant strategic softening of the position held by the Californian company that had always refused to pay content producers and publishers, with the notable exception of a few press agencies, including AFP
 The agreement can be seen as the conclusion of a long process of reciprocal adjustment – not without conflict – between the content industries and those providing the internet infrastructure. 
This can be seen as the conclusion of a long process of reciprocal adjustment - not without conflict – between the content industries and those providing the internet infrastructure, of which Google is one of the most important. A time, ten years ago, when this company launched its news service without consulting the publishers, placing them before a fait accompli, now appears far off. By signing this agreement, the representatives of Google finally recognise that their company is in co-opetition with press publishers: a relationship that is part competitive, part cooperative, but characterised by mutual dependence.
 
For a long time Google placed emphasis on the - undeniable - fact that publishers of news sites need it to access a large part of their audience. Indeed, in the United States and in Europe between 30 % and 50 % of readers of large news portals go via its services. By way of this agreement of 1 February, the American company now recognises that it also depends on the publishers because they provide positive externalities, in the form of “approved” content, thereby increasing the usefulness of its services. Better still, given the global competition that web giants are involved in, the creation of special partnerships with content publishers constitutes a considerable competitive advantage.
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A highly imbalanced bargaining position

The terms of the agreement also establish the bargaining relationship, which in this case is considerably tipped towards Google. The American company wanted to protect itself against the increasing number of demands for money, which are bound to come. Its position as search engine, as a central hub for the internet, ensures huge profits (around 10 billion dollars in 2012), but it is also the target of increasingly frequent attacks from the cultural industries that feel they have been cheated. So, like press publishers, French music publishers are sharpening their legal arguments with the aim of possibly requesting payment.
 
To guard itself against such actions, Google did not want formal recognition of its relationship with content producers. So, it successfully opposed the creation of a new “related right” for publishers which would result in their production being indexed by its services, an idea that has already been put forward in Germany and which was initially defended by groups of French publishers. Rather than a solution of this kind, which would potentially benefit all eligible parties, Google obtained in France an à la carte agreement, negotiated politically. This enables it, amidst a dispute with the tax administration, to normalise its relations with the main press groups, as well as with the French government.
 
At the same time, this agreement signals the break-up of the common stance taken by European publishers that supported until then the setting up of a new related right. It’s not the first time that Google has managed to divide publishers. It was by refusing to adopt the ACAP (Automated Content Access Protocol) indexing protocol, nonetheless backed by the World Association of Newspapers (WAN), the European Publishers Council (EPC) and the International Publishers Association (IPA), that it managed to de facto impose its own standard sitemaps on news sites. And it’s not only Google that is taking advantage of the difficulty publishers are having in coming up with a common strategy and in sticking to it, to impose unilateral decisions. Apple applies a pricing policy in its AppStore without consulting content providers. Last November, it decided unilaterally to raise the sale price of newspapers and magazines, which provoked protests from French publishers, but there have so far been no tangible effects. In the same vein, Facebook regularly changes its Edgerank algorithm, which has a major impact on content visibility on its platform. Once more, publishers are suffering the consequences of these decisions without having any influence on them. If the 1 February agreement marks a step forward for French press publishers in the difficult process of establishing of a common front, it also shows that this is almost impossible at European level. 
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A source of asymmetric financing?

The formula laid down by the agreement signed by the representatives of French publishers allows Google to adapt its position according to the balance of power that it is able to achieve. It is probable that the publishers in “small” countries will not be entitled to the same treatment as the members of the Association de la presse d'Information Politique et Générale (AIPG), the main player in negotiations in France. Similarly, this agreement includes a commercial section so that publishers that so wish can use Google tools to sell their advertising space more effectively. Besides the fact that this situation strengthens the hold Google has over the advertising market, this commercial section encourages publishers to count even more on advertising as a major source of finance. Indeed, sites that have taken the opposite decision such as Arrêt sur images, Mediapart, Dijonscope and Le Télescope d’Amiens will consequently not enjoy a substantial part of the intended benefits.
 
And there’s the rub. The already significant inequality in the means at the disposal of independent press publishers compared with those that are part of large communication groups is liable to worsen further. This is one of the arguments put forward by Spiil, a union grouping together pure players in online information, which asks for the details of the 1 February agreement to be made public and for the financing fund that was created to be made completely transparent.
 
This is because the agreement with Google may recreate a situation that is already known in France, namely press subsidy. Despite its adherence to these quite respectable principles, this system has been blacklisted time and time again because it is inefficient and because of the tendency to give priority to the most “influential” media companies. The last criticism to date comes from the report by the Cour de Comptes which pointed out the lack of transparency and effectiveness, and the excessively high cost of the help package given to the written press launched in 2009, following the press summit meetings.
 
Will Google, champion of the “Californian ideology”, an ill-assorted coupling of political and economic liberalism to the engineer culture, be led to replace public authorities as the pillar of the economic model of the online press in France? This is a possible scenario which, if it comes about, will create an obvious paradox. Indeed, how else does one qualify a change that would see a herald of free enterprise become the main supplier of funds for a subsidy system seen by its detractors as an impediment to innovation?
 
Translated from French by Peter Moss
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References

Marc-Olivier GOYETTE-CÔTÉ, « Le retraitement automatisé de l’information d’actualité en ligne : analyse des mécanismes socio-techniques mis en place par les infomédiaires », Communication, Vol. 29/2, 2012.
 
Nikos SMYRNAIOS, Franck REBILLARD, « Entre coopération et concurrence : Les relations entre infomédiaires et éditeurs de contenus d’actualité », Concurrences, n° 3-2011, n°37281.
 
Franck REBILLARD, Nikos SMYRNAIOS, « Les infomédiaires au cœur de la filière de l’information en ligne. Les cas de Google, Wikio et Paperblog », Réseaux n° 160-161/2010, p. 163-194.
 
Franck REBILLARD, Nikos SMYRNAIOS, « L'actualité selon Google. L'emprise du principal moteur de recherche sur l'information en ligne », Communication et langages n° 160, 2009, , p. 95-109.
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