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News Corp opposes Google’s EC settlement offer

MUMBAI: In a letter to European Commissioner for Competition Joaquín Almunia, News Corp CEO Robert Thomson opposed search engine and media major Google’s settlement offer with the European Commission, alleging the internet giant is “willing to exploit its dominant market position to stifle competition.”

Google has been the target of a European Commission investigation since November 2010, when complainants, including Microsoft, accused the company of promoting its own services at their expense.

The settlement will allow Google to avoid a fine of up to $5 billion. The company will have to display rivals’ links more prominently. Google reached the settlement in February, but might have to come up with additional concessions to rivals. Earlier this month, the commission had rejected Google’s third proposed settlement after receiving new information from the company’s competitors.

Thomson said that News Corp also opposed the proposed five-year term of a settlement, noting that ‘five years is an eternity in internet time.’

Citing Google’s ‘egregious aggregation’ of content, Thomson said that, along with serious commercial damage, there is a ‘profound social cost’ to Google’s actions. “The internet should be a canvas for freedom of expression and for high quality content of enduring value. Undermining the basic business model of professional content creators will lead to a less informed, more vexatious level of dialogue in our society.”

“Your decision to reconsider Google’s settlement offer comes at a crucial moment in the history of the free flow of information and of a healthy media in Europe and beyond,” Thomson wrote.

“There is no doubt that the case is one of profound significance for many media companies in Europe but also for the people of Europe, whose ability to access information, independently and meaningfully, is put at risk by the overwhelming power of Google. The company has evolved from a wonderfully feisty, creative Silicon Valley start-up to a vast, powerful, often unaccountable bureaucracy, which is sometimes contemptuous of intellectual property and routinely configures its search results in a manner that is far from objective.

“News Corp has significant interests in Europe, including ‘The Times’, ‘The Sun’ and ‘The Wall Street Journal Europe’, and a network of local-language business newswires, as well as the HarperCollins book publishing business. We are not a small company, and we do use Google products and partner with the company on various projects (it would be impossible not to, given the scale and influence of Google) but our cherished content is vulnerable to exploitation. Benefitting significantly from the efforts and investments of others, Google must do more to ensure that rights are respected and that its powerful search platform is not abused to eliminate competition.

He added that sudden changes are made to the ranking and display of Google search results, which inevitably maximise income for Google but punish small companies that have become dependent on Google for their livelihood.

“Meanwhile, in recent months, Google has developed a ‘certification’ process for Android-related products which allows it to delay or deny content companies and other businesses access to the mobile operating system, while giving itself the freedom to develop competing products. This development reflects the exponential evolution of Google from a company that is ‘open’ to one that is selectively closed and willing to exploit its dominant market position to stifle competition.”

The letter blames the closure of newspapers partly on Google. He wrote that virtually every newspaper in Europe is in the midst of upheaval, and some will surely not exist five years from now, in part because of their own flawed strategy and lack of leadership, but also because the value of serious content has been commodified by Google.

“Data aggregators attempt to sell audiences at a steep discount to the original source, for example, access to 75 per cent of ‘The Wall Street Journal’ demographic at 25 per cent of the price, thus undermining the business model of the content creator. This process is at a relatively early stage and needs constant monitoring to ensure that abuses are halted and that there is a fair return for newspapers, publishers and other investors in original content.

“Clearly this habitual appropriation of content and audiences does serious commercial damage, but there is also a profound social cost. The internet should be a canvas for freedom of expression and for high-quality content of enduring value. Undermining the basic business model of professional content creators will lead to a less informed, more vexatious level of dialogue in our society. There will be no shortage of opinions; in fact, opinions will proliferate, but they will be based on ever flimsier foundations. The quality of discourse will inevitably deteriorate and the intemperate trends we are already seeing in much of Europe will proliferate.”