Google’s brazen blackmail strategy against Spanish publishers is both disgraceful and dangerous

Google SpainBy Simon Davies

One of Europe’s most important information rights and competition stories of the past five years has almost invisibly unfolded this week in Spain. It’s a tale dominated by corporate bullying, retribution and hypocrisy – and its impact is likely to resonate across the world.

The thirty-second background is that Google has just shut down its news aggregation service for Spain (the service branded as Google News). This action was ostensibly in response to a new law in Spain that will require such services to pay a small fee to publishers for displaying their content on search pages.

To arbitrarily shut down an entire nation’s gateway to news is surely a further gross abuse, allowing the company to effectively blackmail its way to a non-democratic negotiated position in the company’s favour.

Google then claimed it doesn’t make any money from its news service and therefore has no intention of abiding by a law that requires it to pay even a token amount for content. Having closed down the service, Spanish publishers are now facing a crisis because Google has an almost total monopoly on news search..

First, I should deal with the claim that Google News is a profitless enterprise and that the company has both a business and a moral foundation to shut it down. It’s worth taking a minute to drill down into this claim.

This argument doesn’t stack up. Google has an aggregated business model intentionally designed to create revenue synergy – the whole being greater than the sum of the parts. Google News is inextricably linked to all other elements of the revenue model because all those components are integrated (importantly, this model has been ruled unlawful by EU regulators). It is thus institutionally impossible now for the company to claim that any single service is “unprofitable”.

In any event, even as far back as 2008, Marissa Meyer – then a senior executive at Google – revealed that Google News was “a $100 million search referral machine” for the company’s other services. Google’s economic argument for shutting down its news aggregator is thus wholly unstable.

But there are even more important considerations. Google has an almost total monopoly on news search queries in Europe – and particularly in Spain. With that power, surely, comes responsibility. The company is already under investigation by EU antitrust authorities over the issue of abuse of its dominant position in search. To arbitrarily shut down an entire nation’s gateway to news is surely a further gross abuse, allowing the company to effectively blackmail its way to a non-democratic negotiated position in the company’s favour. In short, Google’s action this week holds a gun to the heads of publishers and legislators.

It is, however, the hypocrisy of this move that is likely to inflame many people. Google has spent the last few months taking the “high ground” over its opposition to the recent Right to be Forgotten decision of the European Court of Justice. Faced with a requirement to respect the privacy of users by removing search access to some inaccurate or outdated pages, the company engaged a PR war, arguing that access to recorded history was paramount and that it would go down fighting for the right of people to have free and unrestricted access to such content.

The cleverly spun angle taken by some news organisations is that the Spanish publishers are greedy and hypocritical. They want everything. The reality is that Google, as a monopoly, should never have even considered the nuclear option of shutting down the news aggregator. If the publishers are clamouring for its return it is only because their livelihood depends on the service.

All of which should prompt musing about whether the company’s lobbying outlay (legal challenges, a vastly expensive RTBF roadshow etc) aimed at convincing people of the importance of access to information outside the law, exceeded the cost of ensuring that Spanish citizens actually receive such information within the law. No, a more likely scenario is that Google’s move is political and strategic rather than moral.

Google’s actions are unacceptable.  As with privacy, data protection and the Right to be Forgotten, the company has once again shown little respect for the law. Perhaps most importantly, Google is in such a position of economic power that it now constitutes a genuine threat to democracy. Google appears to be perfectly willing to harm free press in order to assert its business model.

There’s an emerging view that Google’s call for freedom of expression have become cynical and hypocritical.  What has happened in Spain should be a political warning that resonates not only in Madrid and Brussels, but also in other jurisdictions across the world.