German publishers are not just fighting Google. They are fighting the link and thus the essence of the internet.
Half the major publishers in Germany have started a process of arbitration — which, no doubt, will lead to suits — to demand that Google pay them for quoting from and thus linking to their content. And now we know how much they think they deserve: 11% of Google’s revenue related to their snippets. From their government filing, they want a cut of “gross sales, including foreign sales” that come “directly and indirectly from making excerpts from online newspapers and magazines public.” [All these links are in German.]
Their demands are as absurd as they are cynical and dangerous. First, of course, Google is sending the publishers plenty of value as well. That is, Google is sending the publishers us: readers, customers, the public these news organizations allegedly want to serve. So what are we, chopped liver? I’ll be posting an essay soon that argues that one reason media have a problem building new digital business models is that we still think value is intrinsic only in content; we have no marketplace and metrics for valuing the creation of an audience for it (now that those functions are unbundled). If the publishers really want a fair exchange of value, then they should also be paying Google for the links — the readers — it sends their way. But, of course, that would create a moral hazard and corrupt search; that Google does not charge for placement in search and Google News is precisely what set it apart from predecessors and built a valuable and trusted service.
Google is never going to pay for the right to quote and link to content. That would ruin not only its business but also the infrastructure of knowledge online. If we can find only the knowledge that pays to be found, then the net turns into … oh, I don’t know, a newsstand?
The publishers aren’t stupid. They realize these facts. That’s what makes their action so cynical. They are trying to blackmail net companies in hopes of getting some payoff from them. They’re not just going after Google but also Microsoft and Yahoo — though, interestingly, if a company has only a search engine, the publishers would charge them only a third of their tariff. That is to say, they want to go after the big net companies because they are big targets.
Earlier this month, I spoke at a Google Big Tent event in Berlin (Google paid my travel expenses; I do not accept other payment from Google) where a conservative member of parliament, Dorothee Bär, had the admirable guts to criticize these mostly conservative publishers for their efforts, telling them that she opposed passage of the law that is allowing this nonsense — a Leistungschutzrecht or ancillary copyright — and also warning them that a failing business model is no excuse to run to government begging for regulation. You’d think conservatives would agree about that. But that, again, is what makes the publishers’ campaign so cynical.
Note, by the way, that Google does not place advertising on Google News. Are the publishers seeking 11% of 0? Note as well that there is data to say that longer samples of content could end up sending *more* traffic to creators (more on that, too, in a later post). These are facts that will need to be discussed in any suits.
Add all this to other attacks on Google by German media and politics against Google: the Verpixelungsrecht — right to be pixelated — in Google Street View and calls by German politicians to break up Google. Add to that as well the recent European court decision upholding a right to be forgotten and requiring Google to take down links to content that subjects don’t like.
And I worry about the net. I worry about Europe and especially Germany about their efforts to protect the past. I’ll likely write more about that as well later.
But, of course, these warriors do not speak for all of Germany or all of Europe. The instigators of the war include Axel Springer, Burda, WAZ, the Müncher Merkur, and others. But other major publishers — Spiegel Online, Handelsblatt.com, FAZ.net, Stern.de, Sueddeutsche.de and [cough] the new German edition of Huffington Post — have not joined the war. And there are politicians such as Bär and outgoing vice president of the European Commission Neelie Kroes who have the courage to defend the future. Here is Kroes the other day responding to strikes across Europe protesting the arrival of Über:
The debate about taxi apps is really a debate about the wider sharing economy. That debate forces us to think about the disruptive effects of digital technology and the need for entrepreneurs in our society. . . .
Whether it is about cabs, accommodation, music, flights, the news or whatever. The fact is that digital technology is changing many aspects of our lives. We cannot address these challenges by ignoring them, by going on strike, or by trying to ban these innovations out of existence. . . .
I believe it is a fundamental truth that Europe needs more entrepreneurs: people who will shake and wake us and create jobs and growth in the process.
We also need services that are designed around consumers. The old way of creating services and regulations around producers doesn’t work anymore. They must have a voice, but if you design systems around producers it means more rules and laws (that people say they don’t want) and those laws become quickly out of date, and privilege the groups that were the best political lobbyists when the law was written.
That is old-fashioned compared to a system that helps all of us as consumers, and encourages entrepreneurs. We need both those elements in our economy; otherwise we will be outpaced to our East and our West. We’ll be known as the place that used to be the future, but instead has become the world’s tourism playground and nursing home. I don’t want Europe to have that future. . . .
More generally, the job of the law is not to lie to you and tell you that everything will always be comfortable or that tomorrow will be the same as today. It won’t. Not only that, it will be worse for you and your children if we pretend we don’t have to change. If we don’t think together about how to benefit from these changes and these new technologies, we will all suffer. . . .