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Jun 18, 2020

Google attacked by publishers group for refusing to pay for news

Norman Levine discusses Alphabet

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Alphabet Inc.’s Google has used its dominance to strong-arm news organizations into giving up their content without adequate compensation, a trade group for publishers said in a report to the Justice Department, which is investigating the internet giant for potential antitrust violations.

Google relies heavily on news content to draw traffic and fuel its advertising business, yet it has so much power as an online platform that news organizations can’t realistically negotiate content licences with the company, the News Media Alliance said in the paper made public Thursday. That’s unlike Facebook Inc. and Apple Inc., which pay publishers.

“There remains little bargaining power with Google and, as a result, news publishers must consent to these practically unlimited uses by Google without compensation,” said Danielle Coffey, the general counsel for the News Media Alliance, in a statement.

The report is the second in-depth analysis to be sent to the Justice Department outlining how Google may be violating antitrust laws. Last month, the Washington-based policy organization Public Knowledge issued a paper describing how Google’s control over the digital advertising market is harming publishers, which are effectively locked into Google’s technology for selling ad space on their sites.

Earlier: Google Antitrust Road Map Goes to DOJ With U.S. Suit Looming

While the previous paper focused on Google’s effect on publishers’ advertising sales, Thursday’s paper examines the internet company’s effect on news revenue. Both add fuel to complaints that Google is using its dominance to thwart competition.

The Justice Department and a nationwide group of state attorneys general have been investigating the company for nearly a year and are preparing to file lawsuits in what would be the most significant monopolization case since the U.S. sued Microsoft Corp. in 1998.

The News Media Alliance plans to send the paper to the states and the House Judiciary Committee’s antitrust panel, which is conducting its own investigation of Google and other big tech companies, said a person familiar with the matter.

The alliance’s chairman is Toni Bush, the global head of government affairs for News Corp., publisher of the Wall Street Journal and a frequent critic of what it alleges is Google’s mistreatment of newspapers.

The publishers take special aim at a technology Google created in 2015 called Accelerated Mobile Pages, or AMP, aimed at decreasing the load time for websites on mobile devices. The AMP-formatted articles are hosted on Google’s servers rather than the publishers’. That allows Google to form a direct relationship with readers and to collect data that would be valuable to publishers, according to the paper.

The paper says publishers effectively had no choice but to adopt the format because, in doing so, it helped improve their contents’ ranking in Google search results.

Google has denied that use of AMP affects search rankings, but has noted that its carousel of top news stories on mobile does require the format, both to render content quickly and to embed it.

“This lightens the burden on publishers to pay for or run expensive content distribution networks,” it told the House antitrust panel last year. Google also said it created a feature that allows publishers to have their content displayed under their own URL on supported web browsers.

And while Google has asserted that the accelerated page-loading system was not a ranking factor for Google Search, it also has stated that “speed is a ranking factor for Google Search.”

The News Media Alliance is calling on Congress to pass legislation that would allow publishers to collectively negotiate with Google and other platforms without violating antitrust laws.

“In short, through the exercise of its monopoly-like power and the threat of lower search rankings, Google dictated non-negotiable terms of service or otherwise corralled the news industry into less-than-fair terms for use of its content,” the paper says.

The News Media Alliance said some newspapers with paywalls found that the AMP format hurt their ability to convert readers into subscribers. One major newspaper studied subscriber conversion rates for mobile traffic to its regular website compared with the AMP format. It found that the number of subscribers per million users was 39% lower for AMP traffic, according to the report.

While publishers’ complaints about Google’s use of their content go back years, a 2007 court decision found Google’s use of thumbnail photographs constituted fair use under copyright laws. The News Media Alliance paper argues that, since that decision, Google is no longer just a search engine that points users to original websites but instead is a destination and publisher in itself -- and one that has used its power to go beyond fair-use protections.

“A court taking a hard, fresh look at Google would likely find that many of its current uses of newspaper content exceed what fair use permits – and thus, that Google has no legal right to use this content absent a license,” the paper says.

©2020 Bloomberg L.P.