A First Step on Continent for Google on Use of Content

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PARIS -- Publishers in France say they have struck an innovative agreement with Google on the use of their content online. Their counterparts elsewhere in Europe, however, say the French gave in too easily to the Internet giant.

The deal was signed this month by President François Hollande of France and Eric E. Schmidt, the executive chairman of Google, who called it a breakthrough in the tense relationship between publishers and Google, and as a possible model for other countries to follow.

Under the deal, Google agreed to set up a fund, worth €60 million, or $80 million, over three years, to help publishers develop their digital units. The two sides also pledged to deepen business ties, using Google's online tools, in an effort to generate more online revenue for the publishers, who have struggled to counteract dwindling print revenue.

But the French group, representing newspaper and magazine publishers with an online presence, as well as a variety of other news-oriented Web sites, yielded on its most important demand: that Google and other search engines and "aggregators" of news should start paying for links to their content.

Google, which insists that its links provide a service to publishers by directing traffic to their sites, had fiercely resisted any change in the principle of free linking.

The agreement dismayed members of the European Publishers Council, a lobbying group in Brussels, which has been pushing for a fundamental change in the relationship between publishers and Google. The group criticized the French publishers for breaking ranks and striking a separate business agreement that has no statutory standing.

The deal "does not address the continuing problem of unauthorized reuse and monetization of content, and so does not provide the online press with the financial certainty or mechanisms for legal redress which it needs to build sustainable business models and ensure its continued investment in high-quality content," Angela Mills Wade, executive director of the publishers council, said in a statement.

German publishers were also scornful, with Anja Pasquay, a spokeswoman for the German Newspaper Publishers' Association, saying: "Obviously the French position isn't one that we would favor. This is not the solution for Germany."

Germany has been in the forefront of the push to get Google to share with online news publishers some of the billions of euros that the company earns from the sale of advertising. A proposed law, endorsed by the government of Chancellor Angela Merkel and working its way through the federal legislature, would grant a new form of copyright to digital publishers. If enacted, it could allow publishers to charge search engines or aggregators for displaying even snippets of news articles alongside links to other Web sites.

Mr. Hollande had vowed to introduce similar legislation this winter if Google and the publishers did not come to terms. It appears that Google, which had threatened to stop indexing French Web sites' content if it had to pay for links, has sidelined the threat of legislation, at least for now; the agreement will be reviewed after three years, Mr. Hollande has said.

Under the deal, Google says it will help the publishers use several of its digital advertising services, including AdSense, AdMob and Ad Exchange, more effectively.

Publishers are already free to use these services, and it was not immediately clear how they would be able to generate more revenue from them; this part of the accord remains confidential, both sides say, because they are still negotiating the fine print.

"This agreement can help accelerate the move toward greater advertising revenues in the digital world," said Marc Schwartz of Mazars, a consulting firm, who is serving as an independent mediator in the talks. "I'm not saying we have done everything, but it's a first step in the right direction."

More has been said about the planned innovation fund. Publishers will submit proposals to the fund, which will select ideas to finance and develop, with the involvement of Google engineers.

"The idea is that it would inject innovation into the sector in France," said Simon Morrison, copyright policy manager at Google.

So far, French publishers have struggled to generate revenue from advertising or any other sources online. Neither side has disclosed estimates of how much new money the deal could yield for them.

Annual digital sales total a mere €70 million at the 160 news sites in the ad hoc group that was formed to negotiate with Google, according to Nathalie Collin, general director of the company that publishes the news magazine Le Nouvel Observateur. While Google does not disclose its annual revenue in France, analysts estimate it at about €1.5 billion.

Ms. Collin, who represented the publishers in the talks, acknowledged the criticism of the deal, saying it was "a compromise." But she said it was better to put something in place quickly, rather than fighting Google for years in the hope of implementing legislation that might or might not help.

"For us it was very important to have some recognition of the value of our content, and this gives us that," she said. "Some people say this will make us Google-dependent. Thinking that you can work on the Web without being Google-dependent is not realistic. We are Google-dependent anyway."

Only weeks before the French agreement, Google settled a legal battle that had gone on more than six years with publishers in Belgium, reaching a deal under which both sides promised to promote each other's services -- though, as with the French accord, neither side said how much revenue this might raise.

Publishers elsewhere in Europe say this is not enough. In several other European countries, including Italy, Austria and Switzerland, they have started to explore the possibility of legislation along the lines of the German proposal.

The European Publishers Council said in its statement that it was "supporting its members in Germany and elsewhere who are holding fast and demanding laws in their countries that would allow publishers to charge aggregators and search engines for reproducing publishers' content."

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This article originally appeared in The New York Times.


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