Introduction to Google’s Experiment

In November, Google conducted an experiment in eight European countries to determine the value of news content from EU-based publishers. The test involved omitting results from these publishers for a small percentage of users. According to the survey results, the news has no meaningful monetary value for the company.

European Copyright Law and Google’s Compliance

European copyright law requires Google to pay publishers for using snippets from articles. The company’s "public experiment" was likely designed to gather data to negotiate with news outlets and potentially reduce their leverage. Google’s blog post explaining the experiment’s results states that "during our negotiations to comply with the European Copyright Directive (EUCD), we’ve seen a number of inaccurate reports that vastly overestimate the value of news content to Google."

Results of the Experiment

Google Economics Director Paul Liu said that when the company removed news content from one percent of users in Belgium, Croatia, Denmark, Greece, Italy, the Netherlands, Poland, and Spain, it saw no change in ad revenue and only a 0.8 percent drop in usage. Liu concludes that "any lost usage was from queries that generated minimal or no revenue." The experiment initially included France, but the company backed out after a court warned that it would break a previous agreement and face fines.

Google’s History of Negotiation Tactics

Google has a history of using the potential withdrawal of visibility as a negotiating stick in similar situations. The company has conducted tests in Canada, California, and Australia, where it threatened to remove its entire search engine from the country. However, in Australia, the government prevailed, and Google struck deals with Australian media companies to license content.

Conclusion

Google’s experiment was likely designed to gather data to negotiate with news outlets and potentially reduce their leverage. The company’s tactics have been successful in some cases, but not in others, such as in Australia, where the government stood firm. The outcome of Google’s negotiations with EU-based publishers remains to be seen.

Image: Interior view of a Google campus in Madrid.

TechCrunch notes that Google is walking a fine line in its negotiations with EU-based publishers. The company has already faced antitrust fines in France over news content, and Germany is ratcheting up pressure on Google’s news licensing tactics. Neither country was ultimately included in the "experiment."