Google Fined €500 Million For Not Negotiating Link Tax in Good Faith in France

French regulators have fined Google €500 Million for failing to negotiate the link tax payments in good faith.

It’s almost as if pulling out of the country like everyone expected was the best solution after all.

The idea was insane in the first place and now Google is apparently paying the price for trying to go along with this anyway. The link tax is a concept that forces websites to pay a tax for the privilege of linking to content, thus sending traffic to the source. While linking has always been a symbiotic relationship, large media conglomerates decided that linking to their content is copyright infringement. As such, in several countries, they have been lobbying governments to implement a link tax. While the entire technology community had a collective “that’s not how this works. That’s not how any of this works” response, publishers were absolutely determined to move forward with this anyway, pushing conspiracy false conspiracy theories that large tech giant’s are using other people’s news articles without compensation.

In Australia, the government pushed forward their version of that law as part of a broad anti-tech and anti-internet agenda. In response, Google threatened to pull out of the country should they go ahead. It was a logical response. After all, publishers need these sites more than the sites need the publishers. The breakup seemed to be all but a sure thing with Australia refusing to back down.

Then, an astonishing about face as Google caved to the pressure. They started to ink deals with publishers to move forward with the link tax. In one particularly big move, they unveiled Google News showcase. The idea is that the search engine giant is paying publishers for the privilege of linking.

The developments has since emboldened big publishing as they pushed for the link tax in more countries. This includes Canada and the United States.

Generally, the response from observers is that this was a terrible move that is destined to backfire. For some, the thinking is that the reason why larger tech companies are going along with this is that they see this as way of destroying any possible competition. If you have to spend billions just to make an aggregator viable, then only large tech companies are able to survive. It’s not sustainable given that big publishing will continue to demand more much like how the big record labels and movie studios continuously demand more with no end in sight.

Already, we are seeing Google’s efforts beginning to backfire. French regulators are now fining Google €500 Million for not negotiating in good faith. From NPR:

France’s competition regulator fined Google 500 million euros ($592 million) on Tuesday for failing to negotiate in good faith with French publishers in a dispute over payments for their news.

The agency threatened fines of another 900,000 euros (around $1 million) per day if Google doesn’t come up with proposals within two months on how it will compensate publishers and news agencies for their content.

Google France said in a statement it was “very disappointed” by the decision, and that the fine “doesn’t reflect the efforts put in place or the reality of the use of news content on our platform.” It said it is negotiating in good faith toward a solution, and that it’s on the verge of reaching an agreement with some publishers.

“When the authority imposes injunctions on companies, they are required to apply them scrupulously, respecting their letter and their spirit. In the present case, this was unfortunately not the case,” the watchdog’s president, Isabelle de Silva, said in a statement.

“Google’s negotiations with publishers and press agencies cannot be regarded as having been conducted in good faith.”

The truth in the matter is the fact that Google themselves walked right into this fine. Had the search giant actually pulled out of the country like everyone expected in the first place, this could have been avoided altogether. Publishers would have been begging the likes of Google and Facebook to return to their country after watching their traffic plummet. It would have been the famed hand on the hot stove moment for them. Instead, Google is putting their own hand on the hot stove and they only have themselves to blame because they knew or should have known better.

At this point, there’s still time for Google to go back to the logical decision and pull out of the country. It would still be sensible for Google to say that they tried to work out a deal, but those big publishers just kept demanding more. Then, admit that it was a mistake that they could work with big publishing to find a reasonable solution before pulling out of the country. At least admit that this whole exercise in futility was a mistake and do what was the obvious solution all this time. At this point, it’s unclear if the big tech companies will do what they should have done instead of chasing this idea that this is a backdoor to permanently give themselves a monopoly. There may yet be ways of doing so, but the price of admission with this angle is far too high.

Drew Wilson on Twitter: @icecube85 and Facebook.

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