The Google Fund: a conflict of interest and distortion of competition
The French Association for the Independent Online Press (Spiil), of which Mediapart is a founding member, issues this strong denunciation of the terms of the creation and the operation of the so-called Google Fund, which was launched last week. It is the result of a compromise reached earlier this year between the US search engine giant and a section of French press publishers over Google’s use of article contents. In this statement, the Spill, which played no part in the deal, details why the Fund’s organization is fundamentally flawed by conflicts of interest and is contrary to the very principles of competition rules.
Paris, September 19th 2013.
The French Association for the Independent Online Press, Le Syndicat de la presse indépendante en ligne (Spiil), has learnt via press reports of the launch on September 19th 2013 of the special Google Fund to finance the development of internet projects by French press publishers, and the rules that will regulate its use.
The Spiil has on numerous occasions expressed its reservations and questions about the existence of the Fund and about the agreement concerning it that was signed between Google and the Association of the French Political and General News Press, the AIPG. Despite demands from the Spiil that the details of this agreement be made public, they remain undisclosed to this day despite the fact that the deal was signed within the walls of the French presidential office and under the auspices of President François Hollande.
The Spiil, whose founding members are all officially recognised as constituting part of the Political and General News Press (IPG), also challenges the monopoly claimed by a private association of print press publishers as being the representative of the IPG, and this without any form of consultation with other parties.
As a question of principle, the Spiil rejects the Google Fund’s dedication to financing exclusively those websites that come under the category of the political and general news press, as officially defined by the French commission that regulates the special economic regime for publications and press agencies, the CPPAP. Most of those websites that are managed by press organizations publish political and general news contents but also other contents that are not in this category.
Nowhere on the website dedicated to the Google Fund, www.finp.fr , is there any mention - either in the rules governing its application, the criteria applied for selecting beneficiaries or the model for an applicant’s demand for aid - is there any stated requirement that a project to be financed by the Fund must be of a political and general news nature.
It should also be noted that those websites recognised as providers of political and general news hold no monopoly over digital innovation. The situation is all the more unfortunate given that the French government, for reasons that the Spiil respects but does not approve, is at the same time centring its Strategic Fund for the Development of the Press (FSDP) on those publications that come under the official category of the political and general news press.
The result is the threat of distorted competition among the whole of the press industry (whichever the method of publication and whatever the branch of the press), and which is aggravated by the following:
- The administrators of the Google Fund will have access to dossiers that detail the editorial and commercial strategies of competing companies, along with their economic models, their pricing policies, their monetization performance regarding readership and databases. Confidentiality rules, even if strictly applied, do not concretely prevent the Fund’s administrators from accessing strategic commercial information concerning their competitors, which is contrary to the very principles of competition rules.
- The criteria for eligibility to, and the functioning of, the Fund allow for a margin of interpretation, for exceptions to the rules and ultimately discretionary decisions that in no way guarantee equality among applicants. The criteria for what constitutes an “innovating” project are vague. There is also the paradoxical situation that only those publishers of websites that come under the category of political and general news have the possibility of receiving funding for projects that are not in this category. There is also a variable rate of funding (with a “maximum” ceiling rate of 60%) while the limit set on the maximum value of the funding, at 2 million euros per project, can be “exceptionally” modified.
- While it is stated that “projects financed by the Fund have no requirement to use Google products”, there is nothing that offers the guarantee that the intended use, or not, of Google products will have no influence on the judgment of whether a project is “innovating”. Thus, joining the risks of arrangements on the horizontal organizational level, come others of a vertical kind. These dangers are all the greater given that the creation of the Google Fund includes a secret commercial agreement between the Google company and the publishers belonging to the Association of the French Political and General News Press, the AIPG. The restrictive composition of the AIPG, and the absence of any limit to the sum of subsidies paid to any one publisher, allows for a heightened concentration of private aid allocated to just a few major publishing companies and which are already the principal beneficiaries of public aid for the press industry.
- The composition of the Fund’s board of directors represents a generalized conflict of interest because of the fact that it is dominated by those who will be the Fund’s principal beneficiaries. Added to this is the fact that the managing director of the Fund, until now an employee of a press organization which is a member of the Association of the French Political and General News Press, is also the only representative of the press to sit on the National Digital Council (CNNum) which has responsibility for advising the government on key economic issues concerning our industry.
- Furthermore, the Spiil strongly protests the fact that no detail is provided about the decisions made by the Fund’s board of directors – regarding their form, timetable or motivation – nor is any detail given about the mechanisms in place to evaluate the use of the allocated funds with regard to a project’s initial objectives
In face of this clear danger of a distortion of competition, the Spiil is studying every means of recourse open to it, both at a national and a European level.
The Spiil is not a member of the Association of the French Political and General News Press, the AIPG, and took no part in the process of reflection and decision making concerning the organization and functioning of the Google Fund.
For press enquiries, contact:
Maurice Botbol , chairman of the Spiil
Phone (Paris): 01 44 88 26 16
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