Google agrees to pay French publishers

Publishers around the world will raise a toast, in champagne naturally, to the French. In what might be a landmark event for internet news organisations, Google has agreed to set up an $82 million fund in response to a grievance from French publishers.

French news organisations, as well as publishers in Italy and Germany, wanted Google to pay a fee to display news content in its search results. Google, ever mindful of the power of its capricious search engines, threatened to stop indexing European news sites if it was charged for content.

The French government backed the publishers and seem to have arrived at a happy compromise after "intense negotiations" between Google Executive Chairman Eric Schmidt and French President Francois Hollande. Hollande, already earning a reputation as a president prepared to take on the big corporations, had threatened to tax Google’s revenues if they used French media content. The "t" word is famously abhorrent to Google, which may have hastened their willingness to negotiate.

The deal will give publishers access to advertising revenues raised on Google platforms "Our search engine generates billions of clicks each month, and our advertising solutions — in which we have invested billions of dollars — help them make money from that traffic," Schmidt said.

The extra advertising revenues may keep traditional media in business while they adjust to the harsh realities of the digital age. The Digital Publishing Innovation Fund set up by Google will also help publishers who want to complete the transformation to digital publishing, offering financial support to new projects.

German and Italian publishers could use the precedent to push for their own deals. Whether the UK government would have the will to act on behalf of their media industry must be open to doubt as the coalition has tended to retreat from any confrontation with Google (or Amazon or Starbucks or any corporation) to date.

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