The Google agreement with Euro Publishers, a perspective from a digital publisher in Spain

Yesterday Jeff Jarvis was among the first ones to inform about the agreement Google has reached with European media publishers that was officially confirmed by Google today and will, among other things, provide them with 150 million euro out of Google’s pocket. Once my initial shock is over, and after having talked directly with Google representatives on this issue, I am going to try to explain what has happened, and how I interpret it from the point of view of a Spanish native digital media group, as I have done before when the whole Google Tax story developed in Spain.

What is the Digital News Initiative?

In Google own words the Digital News Initiative (DNI) is “an alliance to offer support to high quality journalism in Europe through technology and innovation”, created “in collaboration with news editors across Europe”. That is, with the same traditional media companies with which they were fighting just a few weeks ago.

Three programs are established:

• Product development. I understand we are talking about Google product development that could be of use for media companies. Google says “Google and the founding editorial partners have started to explore a series of ideas for products and are expecting more proposals”.
• Innovation support. Here is where the 150 million euro in three years come. In principle Google is talking about founds for innovation by traditional media, pure digital media and even newly founded startups. Who will take that money will be decided by Google “with the help of a group of advising publishers and journalistic organizations with experience in similar grants”.
• Research and training. Helping newsrooms to develop “digital skills” and preparing research on the media sector.

What does it mean for traditional media in Spain?

Their objective has always been to get Google’s money. They first tried with the Google Tax. Since that did not work, because Google refused to pay for linking or for using “non-significant fragments” as they were called, so as to not set a precedent, they have looked for new ways to get to the same result. At the end, they have what they wanted all along, Google is giving them money and they can publicly claim victory. Furthermore, they have been in the design and creation of DNI from the start, will possibly participate in determining how the funds get distributed, and will most likely be their utmost beneficiaries.

It is not a lot of money. My calculations, assuming a 10% share for Spain, come to 15 million euro for 3 years, or 5 per year. But it is something. And the impact is not only money, but also the opportunity to influence in Google products definition. In the agreement announced a precise figure is used, I am assuming as a condition imposed by traditional media so they can present this as a win. However, what’s behind is even more important. Will Google treat the participating companies better on their search results? Will they have better commercial terms on their advertising products? There are many aspects to this agreement that are hidden, many areas in which Google has no remorse for not being neutral and that can greatly benefit traditional media.

What does it mean for Google?

It means signing a peace agreement with European traditional media. Though it is still not totally clear that all European traditional media is onboard. Axel Springer, one of the main European Google critics is still not known to be a participant. Besides, for Google paying 150 million euros in three years to appease European traditional media is peanuts. And they will have avoided the precedent of paying for links or small fragments.

This newly-found peace with media is specially useful for Google right now, as it faces deep scrutiny by the European Commission on alleged monopolistic practices on several different procedures on which European media pressure has certainly played a role. I would not go as far as to say that Google has bought the European traditional media silence or complicity, but they possibly will be less motivated to continue attacking Google both publicly from their editorial pages and privately through their lobbying efforts.

It does also de facto nullify the approved Google Tax in Spain. Traditional media have what they always wanted and will not push it again. It will stay as an approved law that is not applied (but could if something changes in the future).

Furthermore, it allows Google to work much more closely with many of the main European media groups, ensure that they use Google products and keep them away, as much as possible, from its greatest enemy in this field: Facebook.

What does it mean for pure digital media in Spain?

Not much good I am afraid. If you really look at it, we are talking about a third party who is giving 150 million euro plus all the rest so the competitive equilibrium in the European media market is altered. In the best of cases those resources will be assigned by Google alone (hoping that Google uses impartial and objective rules to do it). In the worst of cases the influence of “the editorial advising group” and the “founding editorial partners” will be thoroughly felt biasing the distribution of funds. Unfortunately it is only marginally better than a 150 million euro fund announced by the Government to help local media. As it turns out, Google is giving money and resources to the traditional media companies that so harshly have fought it so they can better compete with the pure digital groups that have been defending Google position on this issue all along.

Google insists nothing is yet on paper, and has emphasized that all types of media companies are welcome to participate. But this is only half true. Of course any media company can participate. Could you imagine the outcry if this was specifically announced as a traditional media initiative only? But in practice not all media companies will have equal treatment. Some media groups are “founding editorial partners” that have participated in the definition of the program, for whom it is really designed and who will probably have a voice in determining how it is distributed. And then there are media companies who can fill in a form and see if the are allowed in all or some aspects of the program.

To be fully transparent, 20 Minutos and El Confidencial, two Spanish media groups not aligned with AEDE (the traditional newspapers association that promoted the Google Tax) have been told about the program before it was announced and have had the opportunity to join it before it was announced. It is not clear why other pure digital groups of similar size and stature have not been included or forewarned.

Obviously we will all run to claim participation in the program. Even if it is only so we grab anything we can to somehow mitigate the loss of competitive position. In France, during the first year their similar program was in place, this was the way it was distributed by Google:

What will happen with the Pro Internet Coalition formed in Spain to fight the Google Tax?

From my point of view it is fatally wounded. Google did not even have the good sense to forewarn it’s partners off-the-record of the negotiations or the incoming announcement. Google says it has nothing to do with the Google Tax. It certainly looks like we have been useful fools that end up forgotten in a corner when they are no longer useful. Nevertheless, this probably will not matter much. The Spanish government has no interest right now to advance the actual functioning of the Google Tax. Traditional media is not interested either as they already have what they always wanted and could not get through the tax. And Google does not need help anymore to communicate it’s position on this topic. No one is pushing the other side anymore and large traditional media are now their darling alliance partners.

This article is a translation and slight adaptation of my article originally published in Spanish: El Canon AEDE ahora se llama Digital News Initiative.