(CN) — Google must negotiate paying French media groups to display their news content on its platforms, a Paris appeals court ruled in a major decision Thursday.
The American tech giant had sought a reversal after France's Competition Authority, an independent administrative body that polices anti-competitive practices, ruled in April that Google should pay to host news content, videos and photos from French publishers.
But the Paris Court of Appeal found the negotiation command lawful; the opinion is not available in English.
“A very important decision,” said Isabelle de Silva, the Competition Authority president, on Twitter. “Competition applies to everyone, including in the digital world.”
Ahead of Thursday's ruling, Google said it was nearing an agreement with French media over paying for news content. Google is facing similar demands for payments elsewhere, such as in Australia.
“Our priority remains to reach an agreement with the French publishers and press agencies,” the company said, according to news services. “We appealed to get legal clarity on some parts of the order, and we will now review the decision of the Paris Court of Appeal.”
Faced with growing criticism worldwide over how it displays news content without paying for it, Google last week announced plans to spend $1 billion over three years to develop partnerships with news publishers around the world and let them showcase their content.
Google runs the world's dominant search engine. In January, Alphabet, Google's parent company, became the fourth technology company after Apple, Amazon and Microsoft to reach a value of more than $1 trillion.
Worldwide, a shrinking news industry is struggling to remain profitable as advertising and traditional sales revenues dwindle. At the same time, Google and other tech companies are under fire for profiting from news content they do not create.
The case against Google in France is seen as a pivotal test in Europe. In 2019, France became the first European Union nation to ratify and introduce a new EU “neighboring rights” law, a principle contained in a wide-ranging Copyright Directive adopted by the European Parliament in 2019.
The neighboring rights principle is meant to help newspapers, magazines, publishers and news agencies get paid when their content is recycled online by social media platforms and search engines, such as Google does with its Google News portal. It is a form of copyright protection.
The terms and conditions for use of news content is the subject of the negotiations in Europe. French news publishers are seeking millions of dollars in remuneration. Other European publishers are expected to seek similar payments.
After the EU directive was adopted quickly by the French parliament in 2019, the French news service Agence France-Presse and two organizations representing newspapers and magazines demanded payments from Google. They filed a complaint with the Competition Authority alleging Google was not negotiating in good faith to settle the dispute.
In fighting the law, Google argued that media outlets benefit from having their content displayed and their websites visited by millions of Google users, which in turns drives advertising for news websites.
“Google Search and Google News help news publishers by sending large amounts of traffic for free to their sites,” Matt Brittin, the head of Google in Europe, said in a news release last week. “In Europe alone, people click on the news content Google links to more than eight billion times a month — that means we drive 3,000 clicks per second to publishers’ own websites.”
Brittin added that Google doesn't make much money from its news sites and noted that it doesn't run ads on Google News.
Google also insists it is helping the news industry in a number of other ways through its products, programs and funding. It says it is working closely with news publishers by tackling misinformation, investing in journalism projects, increasing digital revenues and coming up with new technologies.
“Quality journalism is more important than ever,” Brittin said. “That's why Google is helping people find news, helping fund journalism, and helping support the diverse range of news publishers with products and technology as they adapt to a digital world.”
Previously, the tech giant has said it will only show search results for articles, pictures and videos if media outlets let Google use them for free. If not, the company has said it will only display a headline and a link to news content.
But Google is apparently willing to pay for news content now.
On Wednesday, it issued a joint news release with French news publishers announcing a deal on paying for news was imminent.
“Google accepts the principle of remuneration,” Pierre Louette, the chief executive officer for the Les Echos and Le Parisien newspapers, said in the news release. Louette is heading up negotiations for L’Alliance de la Presse d’Information Générale, a media group representing nearly 300 national and regional newspapers. Google said it was working on similar deals with AFP and an organization representing magazine publishers.
Still, the legal skirmish between Google, publishers and regulators is far from over. The Competition Authority is examining whether Google is abusing its dominant market position and a ruling on that matter is expected early next year.
The Competition Authority said Google’s practices “were likely to constitute an abuse of a dominant position” and causing “serious and immediate harm to the press sector.”
Courthouse News reporter Cain Burdeau is based in the European Union.