AH Google Logo White 1.0

In the Wake Of EU Antitrust Allegations Google Announces €150 Million Digital News Initiative Fund

April 28, 2015 - Written By Lucius Bossio

 

On April 15th the EU revived a five-year antitrust case against Google with a new “statement of objections”, a form of indictment used by the European Commission, which accused Google of abusing its dominant position in the internet-search market by steering consumers away from rival services and towards its own, such as Google Shopping. For reference, Google handles more than 90% of searches in Europe, compared to 67% in the US. Margrethe Vestager who is the head of the European Commission, has narrowed the scope of the allegations so that they focus on Google Shopping, with the hope that precedents set by the case will establish a broad set of fairness principles Google will have to adhere to across its entire business. Additionally, in response to pressure from Google’s competitors, she has also launched a formal investigation into whether Google forces Android device manufacturers to give its own apps preferential treatment.

All said, the relationship between Google and the European Commission is not at a high point. Due to these strained relations, and to hopefully minimize complaints in the future, Google recently announced a Digital News Initiative fund, “a partnership between Google and news publishers in Europe to support high-quality journalism through technology and innovation.” The three-year €150 million ($167 million) “innovation fund” is meant to stimulate and support innovation in digital journalism. According to Google any national or regional outlet can apply for funds, however, Google has already established partnerships with the publishers behind eight of Europe’s most popular newspapers including The Guardian and The Financial Times in the UK, Die Zeit and FAZ from Germany, Les Echos from France, La Stampa  from Italy, El Pais from Spain, and NRC Media from the Netherlands.

Google also announced a newly established European News Lab team that will work with publishers to “explore product developments aimed at increasing revenue, traffic and audience engagement.” Google’s Journalism Fellowship, which helps undergraduate and graduate students utilize technology to publish digital journalism in new and dynamic ways, will now be open to European students. Grants will also be made available to academic institutions who are investigating data-driven journalism, or what Google calls “computational journalism.”

While Google’s recent announcement indicates a willingness to work closely and synergistically with publishers this has not always been the case. According to Carlos D’Asaro Biondo, Google’s European president of strategic partnerships, “I firmly believe that Google has always wanted to be a friend and partner to the news industry, but I also accept we’ve made some mistakes along the way…we tended to work in isolation, and the feedback has been that Google can be complicated to work with, and at times unpredictable!” Some of Google’s missteps include, but are not limited to,  shutting down its news service in Spain following the introduction of a “snippet” tax, and refusing to show snippets from the titles of German publishers who were seeking an 11 percent cut of Google News revenue, which led to a significant decline in traffic.

Hopefully, this latest announcement signals the end of strained relations between Google and European publishers. However, throwing money and resources around isn’t going to make Google’s European antitrust issues magically vanish. It may help, as it demonstrates Google is willing to work more openly, closely and transparently with others. However, considering Google has been involved in antitrust investigations for five years it will take much more time and a lot more effort to placate the European Commission.