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Google News wars are here again: Schmidt vs France on ‘news tax’

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France has set Google(s goog) a year’s-end deadline for agreeing to voluntarily pay news publishers — or  it may legislate that it must pay a levy for the privilege.

Google chairman Eric Schmidt met French president François Hollande on Monday at the Elysée, which, in a statement, says:

“(Hollande) stressed that dialogue and negotiation between partners seemed, to him, the best way – but, if necessary, a law could intervene on this issue, as with the current project in Germany. The development of the digital economy calls for an adaptation in taxation in order to better understand the value of sharing and funding the creation of content.”

A unified policy from Europe’s two big axes, France and Germany, against Google’s view — that it crawls news stories but publishes only excerpts – could be a big problem for Mountain View.

Eric Schmidt meets France's president, culture minister and other ministers
Eric Schmidt meets France’s president, culture minister and other ministers

In August, Germany’s Bundestag passed Leistungsschutzrecht, a copyright law amendment devised by the country’s coalition government that will give news publishers a year-long exclusive right to publish their material online, requiring others obtain a license to excerpt.

Such legislation is likely devised from a position defending troubled industries, rather than genuinely safeguarding Fair Use-style rights. But that doesn’t mean Google won’t have to deploy its policy arsenal in defense again all the same.

Google wrote to several French ministers earlier this month with a threat of its own — if the levy is implemented, “as a consequence, (we) would be required to no longer reference French sites.” Google warned that France’s proposal would “threaten its very existence” and harm the content market, AFP reported.

Eric Schmidt arrives at the Élysée

This all sounds familiar…

Google’s most notable European news worries came in Belgium, where in 2007 a court ruled that Google did not have the right to run story excerpts from members of the Copiepresse trade group. Google duly pulled the newspaper sites’ out of Google News — ironically, much to their chagrin. Later, they struck an agreement — undetailed — through which Google restored the content in mid-2011.

Now the issue looks like re-opening again…

  • France: Hollande is in a good position to make headway, emboldened both by the European Commission’s competition scrutiny of Google’s indexing algorithm and by its French-led inquiry that has ordered Google to re-separate its recently united privacy policies.
  • Germany: The extent to which Google is really encapsulated by Leistungsschutzrecht is not fully clear, but a test could be on the horizon.
  • Brazil: 154 newspapers comprising 90 percent of the market are withholding their content from Google News, and say they have barely lost any traffic.

Not everyone takes the same stance. UK newspapers, supported by the country’s copyright court, also now require commercial aggregators pay a license for re-use, but their definition of “commercial” encompasses only paid clipping services, not free services like Google News. That means Google can limbo under the law by choosing not to commercialize its service.

That is not necessarily a productive situation. Together with its stock defense (“we drive four billion clicks to news publishers”), this “we don’t profit from your content” argument may be one which Google deploys in negotiation. But that won’t necessarily trump the equal refrain from many a worried publisher: “Neither do we!”

9 Responses to “Google News wars are here again: Schmidt vs France on ‘news tax’”

  1. Dr Kamil Tarar

    Google despite being a global company has the most unethical corporate and social responsibility values. Google evades taxes on the plea that it is a virtual company whereas it has servers located all over the world. It generates revenue from advertisments from local clients globally and targets those ads to viewers using Google and its subsidery services like Youtube locally where the sponsors mostly are located.
    In Pakistan I have also challenged Google in Supreme Court of Pakistan on the plea that it has no legal agreement with Government of Pakistan or the internet regulator – Pakistan Telecommunication Authoritry. Google is generating revenue from local corporate sector like banks, multinational companies and Telecom companies etc but it does not pay a single penny to the tax authorities in Pakistan. Google has also launched a local portal in local national language -Urdu by the name “Google Pakistan” and is in violation of national intellectual propert rights without being registered in Pakistan.
    So not only it evades taxes in EU countries like France etc but even does not spare developing countries like Pakistan.
    It gives me shivers to imagine what it would be doing to countries all over the world.
    My question is why a company like Google has so trecheroius and wicked financial manipulation system and fails to comply with international best practices of business.
    Simply developing the search indexing algorithm and launching inovating services is not enough to mark it as a true innovative leader in today’s world.
    By- Dr Kamil Tarar
    Email: [email protected]
    Cell 0092 345 9228832
    Islamabad- Pakistan

  2. If an operator gains money from al ocal market, MUST pay taxes in the local market!
    If this priciple is not accepted, it’s not fair and not legitimate!
    In USA if you set up a company and are able to make profit, you have to pay taxes in the american state….why this principle should not work in Europe?
    Look at Expedia and the abusive, illegitimate and illegal web site Tripadvisor…they publish unchecked information ( nobody in this universe is capable to distinguich the real genuine reviews, from fake positive’ and fake negative’ ones ) in order to make profit from the local tursim market, without paying a single cent of taxes!
    When money is involved…sorry , but internet is not more a Jungle !!! :-)

    • EntrepreNerd

      It costs Google Billions and Billions of dollars to maintain the servers that push over 4 Billion views to these media sites. So the idea here is that they should use their incredible technology to help send Billions of views to these sites, pay for the global infrastructure costs that are required to make this possible, and than on top of that pay the bills for these media companies so they do not have to bother to upgrade their failing business model. Yeah, that makes sense.

    • You are an idiot. You should surrender your right to use the Internet if you go around submitting retarded comments like these.

      If Google published its search algorithm on any public platform (on a blog, a code repository online, etc.), it would indeed be fair use for others to publish excerpts of it. Last I checked, Google’s search algorithm is not published anywhere. However, the content of the newspapers are indeed published on the public Internet.

      • If you are a publicist for Goog you’re gonna lose your gig, along with your temper that you let slip.

        Global opinion is catching up with the lewd acts of encapsulating the crux of an article into a url. Steal a headline, a thumbnail, and a short paragraph, and pretend it’s a link. Oh, and pretend its for the public good as well.

        The EU is on to you, and I think most other people get it too.

    • Exactly! There is a great chance that Google is the top source of visitors for most online news sites. This is a classic case of biting the hand that feeds you. Google should call their bluff and simply stop indexing their content.