A Belgian Court Pokes A Giant Hole In Google News’ Payment-Free Business Model And Orders, Without Hearing From Google, That It Eliminate All Links To Belgian Newspapers Or Pay a €1 Million Daily Fine

Hearing two weeks after the verdict was handed down that it had lost, Google is now in full damage control mode to get reversed the ruling that said Google’s current way of conducting its news business violated Belgian copyright law.

Under Google’s news business model, the world’s largest media company sends its “automatic robot spiders” trawling the web for news stories that it then lists on its various web news sites, sometimes including the first sentence or two of the article, and it provides a hyperlink directly to the story at the original news source.

The Belgian court ruling basically said that Google violated copyright by reproducing the article summaries and that it must remove all links to all the French and Flemish (Dutch) language newspapers in the country. It also had to print the ruling on its web site. Failure to do this within two weeks of the ruling being issued (September 5) would result in a €1 million daily fine.

ftm background

Google, That So-Called Enemy of Newspapers, Introduces a New Archive Service That Lets Newspapers Make Money Without Any Referral Fee
Newspapers, besides cutting costs to the bone, are desperate to find new ways of making money And now Google, the world’s largest media company by far, has come along with a scheme to boost newspaper archive sales that both sides see as a win-win proposition.

Just How Powerful Is Google As A Benchmark For the Technology Sector? Its CFO Casually Remarks That Organic Growth Is Slowing Down And Before You Know It Stock Markets Around The World Head Seriously South
After giving a fairly bullish presentation on Google’s future financial prospects the words that came next from the company’s chief financial officer at an investor’s conference almost seemed like throwaway lines: “Clearly our growth rates are slowing,” George Reyes said. “We are going to have to find new ways to monetize the business.”

As If Google Didn’t Have Enough Problems with Taxes Taking A Big Bite Out Of Profits That Caused Its Shares Drop By 12% in One Day, and Criticism For Its Censorship Policies Appeasing the Chinese, Now It has Europeans Publishers Mad That The Search Engine Uses Their News Without Payment
Google shares got nailed this week, initially a 12% drop knocking some $20 billion off its market cap although it recovered a bit from there, because fourth quarter earnings, while very good, got hit by high taxes and Wall street didn’t like that. It’s had a tough PR week, too, not showing up at a Congressional hearing into censorship policies agreed by American companies doing business in China, and then European publishers warned they are asking the EU Commission to take a look at why the search engine doesn’t pay for the news its robots scan and sort into various categories on the Google news site.

Google’s Sales in 2004 were $3.2 billion. Time-Warner’s Sales Were 13 Times Higher. So, Which of the Two By Stock Market Capitalization is Now the World’s Largest Media Company? Hint: Think Colorful Letters
When Google’s shares hit $290 each this week (they launched at $85 in August, 2004) it propelled the search engine, Internet advertising giant into the world’s most valuable media company. And while the Wall Street bears fear that its bubble could break any time now, the bulls are predicting the shares will surpass $300 each in short order.

When It Comes to Dealing With the French, Google has “Beaucoup Problèmes”. Add One More -- the French News Agency AFP Sues In US Federal Court
Google has suffered several setbacks against its trademark advertising policies in French court decisions, including losing a recent appeals court ruling, but now AFP, the French news agency, has sued in a US court to stop the search engine from displaying its news and photographs within its news section without permission.

Google said it didn’t even know about the case or its ruling until September 19, the day the fine was to begin. It says it is removing all of the links but it has asked the court to reconsider the publication of the ruling on its Belgian site since the news media globally has by now carried the story. Apparently under the Belgian legal system it is not necessary for the accused party to be present in hearing such a case for an injunction to stop a grievance.

Many news organizations will rejoice at the Belgian court’s decision, seeing it as a great victory. They oppose the way Google News operates because the business model does not provide for any payment to the originating news site, nor does Google seek permission from the news site to pick its stories.

Google’s response has always been that if a news site wants out of the system it has merely to ask and they’re gone. News organizations say Google has that all wrong – they shouldn’t have to opt out; rather Google should ask permission to opt-in.

Now for Google to ask its current list of thousands of news sources to opt-in, and perhaps have to enter into payment negotiations with each of them, is obviously far more difficult and time-consuming than just making the assumption its ok to use someone else’s material unless they ask to opt-out.

A major reason why Google needs the Belgian ruling overturned is because the Belgian Court of First Instance considers legal arguments in a very similar manner to the European Court of First Instance. This is a precedent Google does not want to see staying on the books.

European law is all over the place on such rulings. In Germany and The Netherlands the rulings have sided with news aggregators whereas in Denmark, and now Belgium it has gone the other way. It surely cannot take too much longer before it ends up in the European Court of First Instance.

The Danish case is interesting. In 2002 the Danish Newspaper Publishers’ Association sued an aggregator called Newsbooster for copyright infringement for doing basically what Google does. The court ruled that the synopsis of stories violated copyright and that an aggregator cannot link to a newspaper’s own site for a story unless there is an existing agreement allowing that.

Fast forward to this August and Jubii, a new Danish news search engine, has hit the scene but it has done things differently – it asked various news organizations for permission to link to their news sites and all but two gave permission.

The French news agency AFP had tried for some time to opt-out of the Google search but for whatever reason Google did not activate their requests. So then AFP sued in US District Court in Washington for $17.5 million and Google then said it removed AFP from its system. Some 18 months after the case was filed it is still in the Discovery stage.

Saying that all AFP copy is gone from Google is easier said than done. While obviously most of it is gone a Google news search still turns up some complete AFP stories -- as this is written Wednesday, for instance, a brief Google search found full AFP stories as published by the Brunei Times and the Peninsula in Qatar.

But ftm could not find the AFP story about the Belgian court ruling via Google News. Instead we found it on Yahoo, with whom AFP has a financial arrangement. Interestingly, it did not contain the background information about its US court case, nor did it quote its CEO, Pierre Louette, who told news organizations the Belgian court ruling supports the opt-in. He complained that Google still does not understand that headlines, pictures and text produced from around the world have a financial value and they cost a lot of money to produce.

In other words, link or no link, use of third party material in any way should be paid for.

Margaret Borbon, the general secretary of the Belgian publishers organization, summed it up in a similar fashion. “We are asking for Google to pay and seek our authorization to use our content,” she said. To which Google’s spokesman responds that it’s only headlines, a couple of snippets of text, and a link to the originating site that drives a lot of traffic there. Basically, what’s the big deal and the case was entirely unnecessary,

Be that as it may, Google recently signed an agreement with the Associated Press to use its news in a new service to be available shortly. Whether that just means snippets or rather full text remains to be seen, but there does now seem to be some point at which Google agrees money needs to change hands.

Google Appeal Set For November 24 - September 24, 2006

Google’s appeal of the Belgian Court decision that it was in copyright violation for sourcing Belgian newspapers without permission or payment is set for November 24. The Belgian court, meanwhile, refused Google’s petition that it should not have to print the original court ruling on its news web site.

Google faces a €1 million daily fine if it does not publish the ruling and take away the Belgian links. The company says it is dismantling the links, but it is still reluctant to print the ruling.

A Google spokeman in London said, “We believe it was disproportionate and unnecessary, given the extensive publicity the case has received already, especially while its substance has yet to be debated in court.”

Meanwhile, several newspaper trade organizations including the World Association of Newspapers (WAN) has announced a pilot project for a new tool that can automatically grant republication authorizations to search engines. The groups have been very vocal in their opposition to the way Google uses the opt-out system, rather than allowing newspapers to opt-in.