Google finally agrees to pay publishers for content

Google has struck a series of deals, worth a total of $1 billion, with over 200 publishers in Germany, Brazil, Argentina, Canada, the U.K. and Australia to license their content for a News Showcase it is rolling out. The Showcase represents a major alteration to how Google News functions by giving publishers some control over how their content is presented. It will include new features such as bullet points of key issues, timelines, and links to related articles. This new news aggregating system is being rolled out in Germany and Brazil on Wednesday, and will expand to other countries in the coming months.

The move by Google is an attempt to adapt to a new regulatory environment as an increasing numbers of jurisdictions put pressure on the tech giant to share its revenues with publishers whose content its displays.

Until now Google, and other Big Tech companies, have resisted such measures. Proposed new laws in Australia to enforce revenue sharing with publishers has prompted furious resistance from the Big Tech companies, which estimate that such policies will cost them $500 million a year. Google has warned that the move threatens free search services in the country, while Facebook has threatened to ban all Australian users from sharing news in a bid to avoid the law.

In 2014, Google shut down its news service in Spain in response to a law which required online aggregators to pay to link to news articles.

However, Google now appears to be calculating that the cost of regulatory action or lost markets is greater than the cost of investing in new news services. Behind the latest move by Google to fund local news providers are new regulations being introduced by the European Union, one of the biggest single markets in the world which US tech companies enjoy free access to.

In March last year, the EU passed a law requiring Google to pay publishers to license any content less than two years old that the search engine shows in its newsfeed. Attempts by Google to circumvent this by showing headlines only was not received well by French government, whose competition watchdog ordered it to enter into negotiations with publishers in April this year.

But EU publishers remain suspicious. They argue that the move by Google is an attempt to undermine the new EU law, and refuse to play ball unless Google commits to upholding it.

But there is no doubt that the ground is shifting, with Facebook also taking similar measures. In October last year the social media giant signed deals with various media companies including Buzzfeed, The New York Times, and The Wall Street Journal to license their headlines for display on Facebook.

At the heart of the growing global push to force Big Tech to license publishers’ content is the argument that is unfair for these companies to build trillion dollar enterprises off the back of displaying content generated by publishers, while refusing to pay for that content. Equally, as worries about fake news proliferate, many across the political spectrum are keen to prop up established news companies, which have been devastated by falling ad revenue even as online advertising has exploded.

As in so many other sectors, Big Tech is becoming a victim of its own success as legislators and regulators pay increasing attention to the vast wealth and influence being accumulated.