Google plans to pull the news service from Europe

Google plans to withdraw its Google News service from Europe as regulators steer toward a controversial copyright law.

The EU Copyright Directive will give publishers the right to ask for money from the Alphabet, Facebook and other platforms unit. Web when fragments of their articles appear in search results or are shared by users. The law was to be finalized this week but was delayed by disagreement between member states.

According to Jennifer Bernal, Google's public policy manager for Europe, the Middle East and Africa, Google News could leave the continent in response to the directive. The Internet company has several options and a withdrawal decision would depend on a careful reading of the rules and would be taken reluctantly, she said.

"The council needs more time to think in order to take a firm stand" on the directive, said a representative of Romania, currently president of the European Council, which represents the 28 member countries.

Google said it does not earn money through its news service, so it is unlikely that the company will lose a financial blow to withdraw. But the results of the news encourage mobile users to return to its search engine, where they often launch queries generating lucrative advertising revenue. Google is also competing with competing mobile content aggregation services from Apple and Facebook.

"I do not buy the threat, they really need Europe," said Francois Godard, European media analyst at Enders Analysis, a research firm.

Google has at times underestimated the legal problems in Europe and angered regulators by delaying recognition of their jurisdiction over the commercial area of ​​Mountain View, California. He has led dozens of battles with the authorities in charge of privacy protection, including a 2014 case on the so-called right to forgetfulness that forced the company to purge sensitive details of search results . Litigation with publishers has turned into expensive antitrust investigations and an increasingly compelling claim to limit Google's ability to use content.

Legislators are still questioning the definition of small excerpts of stories and the question of whether certain words should be covered by copyright rules, according to a senior official. EU who asked not to be identified. The rules would also require Google and Facebook to actively prevent the distribution of music, videos and other copyrighted material on their platforms if the rights holders do not license them.

Despite the delay, an agreement is possible in the coming months, said two officials from the EU. In the absence of an agreement in the spring, when the European Parliament elections are held, the process would be postponed until later this year.

As with many divisional issues in European regulation, the problem is the small print. When the commission unveiled for the first time the draft rules, it proposed to let publishers waive their right to demand the payment of news aggregation services. Last year, the European Parliament introduced a provision that caused some small publishers to fear that they will not be allowed to let Google distribute their content online for free.

The impact of a withdrawal of Google News on publishers who depend on the search giant for traffic on their sites is not clear. Google closed its news service in Spain in 2014 after the country passed a law requiring Spanish publications to charge aggregators for posting news clips. Publishers must seek compensation for the reuse of text fragments, whether they want it or not.

Spanish law has led small publishers to lose about 13% of their web traffic, according to a 2017 study published by the Spanish Association of Periodical Publishers. This translates into a cost of at least 9 million euros ($ 10.2 million), according to the study.

Other publishers were initially opposed to Spanish law, but contend that the withdrawal of Google has not had much impact.

"The vast majority of Spanish publishers believe that Google's decision is insignificant," said Wout van Wijk, executive director of News Media Europe, an umbrella organization representing national publishers' associations. The Spanish CEDRO, which is negotiating licenses and collecting royalties on behalf of its members, has entered into licensing agreements with other news aggregators after the departure of Google, he said.

The EU's decision to work on a similar rule has pitted major publishers against the Internet giants, including Google, as well as some small publishers and freedom activists. ;expression.

"Limiting the freedom of publishers in this way will have detrimental consequences for us, as shown by a similar experience in Spain," said European Innovative Media Publishers in a letter to the legislator.

Google says that new European laws would require it to choose publishers to allow, choosing winners and losers. Because large publishers typically offer a wider range of popular content, smaller competitors may lose.

© 2019 Bloomberg LP

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