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The news licensing program is slightly more than a year old and is already under pressure to do more to support news publishers

Google News Showcase has signed up more than 1,000 publishers since its launch in 2020,1 but Google is already under pressure to do more to support the publishing industry.

Google licenses and displays stories within curated News Showcase panels, which can be accessed via the Google News and Google Discover apps on iOS and Android as well as in a special tab at news.google.com.

While the platform addresses much of the news industry’s criticism that Google freely profits from publishers’ content, there are signs that both the industry and regulators want more from the search giant.

How Does News Showcase Work?

Plans for Google News Showcase were unveiled in July 2020,2 with the program launching in October that year with $1 billion in funding. After its initial rollout in Germany and Brazil, Google News Showcase has since expanded to 12 other countries — including markets such as India, Japan, Canada, the UK and Australia.

Details of Google’s deals with participating publishers remain scarce, however, owing to contracts’ strict confidentiality clause. The company itself has said only that it uses a “consistent” formula to negotiate its three-year contracts.3

What we do know is that under these contracts publishers receive monthly payments in return for creating and curating branded News Showcase panels, which also provide limited access to premium content.4 This model is unlike Google News’ existing Headlines feature, in which Google uses algorithms to tailor news results around an individual user.

Google News Showcase is not a pay-for-links model, meaning there are no ad costs associated with the creation of the story panels.

New News Showcase Features

The search giant announced in February 2022 the launch of a new feature to increase the visibility of local publishers’ Google News Showcase panels.

Specifically, these local panels would now be included in the “Your local news” section of news.google.com as well as the local section of the Google News app’s “For You” feed.5

This development comes on the back of last year’s efforts to improve the relevant search results rankings of “authoritative local news sources” so they can compete with national publications.6

Google committed in November 2021 to introducing a local stories carousel that could replace its Top Stories carousel where relevant.7

Google also announced in February 2022 that it had given publishers the ability to monitor reader engagement with News Showcase content in “real time”, delivering on a promise made in February 2021, when it said that publishers would “be able to learn even more with News Showcase metrics on Search Console” in the near future.8

Google has also added new features to the production backend of the News Showcase platform, details of which also remain extremely light on the ground. The company has allowed editorial teams to modify panel images even after a story has been published.

Publisher Traction

The platform’s ongoing development is paying off, with participating publishers understood to have created tens of thousands of panels since the program’s launch and that these have been viewed by millions of Google News and Discover users.

Indeed, Google says that News Showcase delivers “more than 10 million visits per month” to publishers’ sites.9

The company has described the program as a “new news experience”, one that is meant to support the development of a sustainable news industry.

The decision to launch News Showcase came with a pledge that this news experience would provide readers with more context around important stories while also helping fund an industry that has struggled to adapt to the rise of digital media.

Pointing the finger

For years, readers have struggled to see the value in paying for their news stories.

And, as some publishers began restricting access to the content through various methods,10 others were willing to provide free content in order to win over readers that did not want to pay. It is a quandary that has plagued the industry for the better part of two decades.

Indeed, publishers have long accused Google and Facebook of profiting from the news industry’s misfortunes, claiming that the internet giants have capitalized on high-value stories without giving anything back.11 Both companies have rejected such claims, arguing they drive billions of clicks every month to news publishers.

A shift in the regulatory environment, however, has forced both onto the backfoot.

Rise of Regulatory Scrutiny

In February 2021, Australia became the latest territory to pass legislation requiring the media giants to pay to link to news articles, following similar directives adopted by the European Union in 2019.12

Australia’s mandatory News Media and Digital Platforms Mandatory Bargaining Code enables eligible Australian news publishers to negotiate with Google and Facebook over a digital news license. Publishers can negotiate either on their own or together and can seek arbitration if an agreement over costs cannot be reached.13

The ability to band together is a boon for smaller publishers. For many, simply having their content appear in Google News is a major victory, affording them new ways to expand audience reach. For most, however, this syndication will lead eventually to an over-dependence on search-generated revenue.

Australian publisher Junkee Media, for example, said in its parliamentary submission on the bargaining code that both search and social media accounted for around 75% of its web traffic.14

Australia’s adoption of a new media code came after the European Parliament overhauled its copyright legislation in April 2019, thereby allowing publishers to charge for the reproduction of their news content.

European Angst

The European Copyright Directive allows platforms to link to and include snippets of content, while also affording new rights to news publishers with regard to the online use of extended content previews.15

Brussels’ move came after Spain tried — and failed — in 2014 to force Google to pay publishers through its own pay-to-link legislation.

While Google developed the News Showcase product to counter a groundswell of regulatory dissatisfaction over its role as a media gatekeeper, there are signs that both publishers and regulators remain unhappy with the company’s approach.

Germany’s competition watchdog, the Federal Cartel Office (FCO), announced in June 2021 that it was launching a probe targeting Google News Showcase itself.16

The FCO said it intended to look at whether Google’s integration of News Showcase into its general search function was “likely to constitute self-preferencing or an impediment to the services offered by competing third parties”.

It also said it would look at whether Google News Showcase contracts contained terms that it deemed to be “to the detriment of the participating publishers”.

In response to the investigation, Google has suggested two measures that it hopes will “dispel the Bundeskartellamt’s [FCO] competition concerns”, the regulator announced in January 2022.17

These measure include Google: 

  • Abandoning plans to include News Showcase panels in search engine results pages (SERPs).
  • Effectively establishing a Chinese Wall18 between its negotiations with publishers over News Showcase contract and their talks over copyright licensing obligations.

Google has proposed these measures after France fined it €500 million ($568 million) in July 2021 for failing, among other things, to conduct News Showcase contract negotiations in good faith.19

French watchdog Autorité de la Concurrence ruled that Google had ignored directions to hold separate negotiations over copyright licensing obligations.

Publisher discontent 

The search giant has made some major strides in signing up both local and international news providers to News Showcase, with the number of participating publications soaring from nearly 200 at the start.

These publications include the likes of Brazil’s O TEMPO, France’s Le Monde, Germany’s Der Spiegel, the Amazon-owned Wall Street Journal as well as US media heavyweight News Corp.

However, the UK’s Press Gazette ran an exposé on Google News Showcase’s contract model in late September 2021, citing a number of unnamed sources from publishers across the world.3

The sources revealed that the confidentiality clause in their contracts, which if broken would leave publications liable for millions of dollars in damages, ensured that there was a lack of transparency around publisher remuneration.

This has led to industry speculation that Australian publishers are being paid more for their content thanks to the beefed-up regulatory environment.

At the same time, a group of 30 publishers in the US — representing more than 200 publications — has reportedly filed antitrust lawsuits against both Google and Facebook.20

 

Final Thoughts

Google News Showcase is a bold attempt at overcoming mounting industry and regulatory frustration at the search giant’s success at the perceived expense of the publishing industry.

The product may only be a year old, but the search giant can’t afford for it to fail. What appears clear now is that Google’s $1 billion war chest for News Showcase looks increasingly anemic in the face of regulators’ willingness to wield hefty fines where they believe it is justified. 

More insight is needed into Google’s dealings with publishers before conclusions can be reached. But, as it stands, this lack of transparency is already a sore spot for News Showcase and is set to remain a bone of contention in the immediate future.

References

    1. Our $1 billion investment in partnerships with news publishers
    2. A new licensing program to support the news industry
    3. News Shh-owcase… The secrets behind Google’s $1bn scheme
    4. Answering your top questions about Google News Showcase
    5. Dive deeper into local news with News Showcase
    6. New tools and features to support local news
    7. Google Top Stories Carousel | State of Digital Publishing
    8. Google News Showcase launches in Australia
    9. Google News Showcase
    10. Paywalls and SEO | State of Digital Publishing
    11. https://mashable.com/archive/ap-news-corp-pay-us
    12. Final legislation | ACCC
    13. Small news publishers band together in negotiations with tech giants Google, Facebook – ABC News
    14. Junkee Media welcomes the opportunity to comment on the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Barg
    15. https://ec.europa.eu/commission/presscorner/detail/en/IP_21_1807
    16. German competition authority launches probe into Google’s news showcase | Reuters
    17. Bundeskartellamt – Homepage – Google News Showcase – Bundeskartellamt holds consultations on Google’s proposals for dispelling competition concerns
    18. How the Ethical Wall Works in Investment Banking
    19. Rémunération des droits voisins : l’Autorité sanctionne Google à hauteur de 500 millions d’euros pour le non-respect de plusieurs injonctions | Autorité de la concurrence
    20. Over 200 newspapers now involved in quiet lawsuits v. Google, Facebook – Axios
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