For a very long time, online publishers and news agencies had no other choice but to comply with Google’s display policy without being provided with any financial remuneration. This is mainly because of Google’s monopoly in search space. It accounts for the biggest chunk of organic traffic that publishers and news websites receive every day.
The equation, however, is set to change as Google will have to start paying off each and every news publishers it uses the information from to show in its search engine result page, aka SERP.
In a recent ruling by France’s competition authority, Google is facing the prospect of paying for French content and news publishers. The new ruling by the French ‘Autorite de la Concurrence’ body, followed an earlier complaint by several unions representing French press publishers regarding Google’s practices dictates that Google will now have to pay French news agencies and publishing firms for re-using their content as a snippet.
“Google’s practices caused serious and immediate harm to the press sector, while the economic situation of publishers and news agencies is otherwise fragile, and while the law aimed on the contrary at improving the conditions of remuneration they derive from content produced by journalists,” the French watchdog reportedly said in a statement.
Google has now been ordered to start negotiations at its earliest with media groups which are now demanding payment when the search giant displays their content.
It has been reportedly said by the regulator that it requires Google to conduct negotiations in good terms with the publishers and news agencies within three months about the amount of remuneration they should receive for the re-use of their protected content.
In response to the order by the French watchdog, Google France has said that they have been closely working with the publishers to increase their support and investment when it comes to the news since the EU copyright law came into force in France last year. Google France also said that they will surely be complying with the French order after they have reviewed the ruling in full.
The Bone of Contention
Google processes 6.7 billion search queries every day. Along with the organic listing of articles & news on the result page, Google displays sponsored listing as well. The company, however, shares absolutely nil revenue from such ads with publishers. Only when a visitor clicks on a particular result in a bid to view detail news or article, a publisher gets to generate some amount from the ads running on the website – either through Google Adsense program, third-party ad networks or direct advertising deals. However, the number of these clicks as compared to the number of article snippet views is quite minuscule.
Because of ads running on the search result page, Google is able to monetise almost every single search query. On the other hand, publishers start generating revenue only when Google search visitors land on their websites. And, that’s what annoying publishers the most.
Publishers believe that Google must set up a level playing field as the Google search result page is all about showing snippets of news and articles that are owned by publishers. Hence any revenue generated from the search result page must be shared with publishers as well.
To put things in context, in the fiscal year 2019, Google made a whopping $98.11 billion in revenue from Google search and other advertisements which is in stark contrast to the $21.54 billion it made from Google Network Members’ properties advertisements. This clearly shows how the ads running on search result pages alone account for the biggest share of Google’s total advertising revenue. Indeed it’s a huge amount, and that’s why publishers believe that they are entitled for their fair share of it.
Since last year, the value of publisher content to Google has been aggressively debated. A nonprofit that represents more than 2,000 newspapers in North America known as The News Media Alliance argued that Google makes at least $4.7 billion a year from “crawling and scraping” their content. However, this claim was refuted by Google when questioned about it by media analysts, executives and columnists.
EU Copyright law
Last year in September, Google restricted its search engine visitors located in France from being able to see news snippets from European publishers on the search results page.
This essentially means that French internet users were only able to view headlines and not the first few lines or even a thumbnail image for the news content unless Google was specifically given permission from the publishers for it to show previews. This came after The European Union in March 2019 passed a controversial copyright law reform.
After a very long battle, the Europen Parliament decided to back the proposed copyright reforms. It was drafted with an aim to close all the loopholes that allowed all internet companies such as Google and Facebook to provide news from third party sources without paying a single penny.
The European initiative’s Article 11 allows publishers to charge online platforms that feature more than short excerpts of articles.
For French publishers, this change could have a potentially significant impact as traditional publishers have always heavily relied on Google search engine to drive traffic. This, in turn, facilitates publishers to earn money from advertisements as well as user subscriptions.
How effective the new copyright reform laws of Europe will be, only time will tell.
Google’s Monopoly
It’s interesting to learn that in 2014, Spain tried to implement a similar measure but it backfired as it ended up in a complete blackout for news publishers on the internet. Google completely turned off its news service in the country and online news publishers were left on the mercy of social media, referral and direct traffic, which, together, accounts for a minuscule share of the total monthly traffic for most of the news publishers worldwide.
In Germany, Google decided to feature content from only those publishers who agreed to provide it for free. The decision, however, led to a drop in organic traffic. Alex Springer which is a German publisher saw a significant drop in their traffic after it sought to block the search engine.
Now it remains to be seen what number does Google and the publishers arrive at after the negotiations. We will keep you posted.
