Google Hopes To Buy EU Publisher Goodwill With $150M Digital News Initiative

In London today Google has announced a new $150 million Digital News Initiative (DNI). It’s officially intended to help European traditional media companies “increase revenue, traffic and audience engagement.” Participating publishers include The Guardian, Financial Times, Die Zeit, El Pais, Les Echos, NRC Media and La Stampa.

This is very similar to past digital publishing initiatives that Google announced in the UK and France. In the latter case Google created a €60 million “Digital Publishing Innovation Fund” to avoid what amounted to a “link tax,” then proposed to help support French newspapers back in 2013.

Many commentators regard the new DNI as a payoff or payout to European newspaper publishers who have been among the most vocal critics of Google and have lobbied in some cases very aggressively for antitrust penalties as well as new copyright laws (e.g., Germany, Spain) that seek to directly extract content licensing fees from the company.

The alleged quid pro quo here is that the $150 million DNI fund will help mollify critics that are angry at Google and blame it for the decline of their traditional businesses. Although the publishers contend that negotiations began well before the recent European Commission antitrust “Statement of Objections” was filed, it’s difficult not to see the DNI as some sort of effort to appease publishers in that context.

The DNI appears exclusively focused on European publishers. It’s not clear if a similar initiative will be undertaken or extended to the US market. My guess is no, given that there isn’t a similar climate of urgency in the US.

Beyond Google, there’s considerable anger and frustration in Europe over what is seen as dominance of the digital market by US-based companies, including Amazon, Apple and Facebook. However Google has been the main focal point and recipient of much of that anger and indignation.

While many officials in Europe believe that Google has been abusing its market position, there are a set of complicated motives and politics operating behind the scenes that make the matter more than simply about open markets and competition.

It will be interesting to see whether the DNI changes the tone of EU publishers’ rhetoric about Google and whether it does anything to temper any proposed remedies or penalties that might arise under the antitrust action.