10 Little-Known Facts about the France vs. Google dispute

Nov 1, 2012
Vote on Hacker News

We automatically control statistics about the visitors to your website

1. France vs. Google is a User Custody Battle

Online news consumption is more about user behavior than about media content. What fails to connect the user with content has more to do with an underdeveloped system in place to synthesize modern media curation. The tendency of online newsprint is to maintain the status quo, relying on outdated print business models and playing with subscription fees. Flagellating the user with advertisements and ‘free’ online media sites creates a user that isn’t willing to pay for what he/she uses and not necessarily use what he/she would most likely prefer. Nielsen conducted an international study in 2010 that revealed a shocking 80% of global consumers who are unwilling to use fee-based news sites. Findings from audience behavior research predicts that users alongside social media tools drive content and paying intent. Media sites should focus on the User not Google. Likewise, marathon experience tells you to ‘focus on the finish’ not the other runners.

2. Lex Google is the German vs. Google bill

Lex Google targets Google News for alleged abuses of editorial content distribution. France’s grievances begin with the search engine itself, which claims 93.5% of the French market share in internet searches. The French policy is ambitious in that it will debut in early 2013, and largely penalize Google via taxation. French publishers demand a link-compensation model while still relying on the lucrative and reliable search engine. In their dreams.

3. Google Ireland is officially located in Bermuda

The tax on Google’s revenue in Europe is declared in Ireland, routed to Holland, then to Bermuda, where the money is safely protected from corporate taxes. Under EU Law this is completely legal— profits made in one country can be taxed under another if the company has a subsidiary elsewhere. EU tax system promotes a unified market among the 27 countries so that paying the corporation tax is seamlessly done in the location of registration.

4. Google only owes €100 million for VAT and corporate income taxes

However, according to political pundits from Le Canard Enchainé, the Head Tax Officer estimates 1 billion euros. Google denies having received any notification of tax assessment but has officially stated that they will continue to cooperate with tax authorities.

5. Annual French advertising is €150 million vs. €1.5 billion for Google

France doesn’t seem to enjoy a healthy high-stakes business competition. Google is not so much scary but competitive to the French. TF1, the largest domestic TV network is currently the leading advertising-based medium in France.

6. Google made SERIOUS threats

French media Google ThreatsThis is not LOL funny. Free flow of information is not merely a characteristic of the internet but at its very core. I’d like to think of the internet as an unchartered globe. We’ve discovered tiny islands, and rapidly, the shoreline of massive continents. Before a legislator or politician decides to ‘regulate’ a virtual globe, they should bear in mind what practices hinder or help discovery, that is– opportunity to launch expensive and life-endangering ventures. Currently 30%-40% of online French media traffic originates from links from Google. If Google decides to ban French media sites, would that hinder or help France in its digital journalistic voyage?

7. In under 40 Minutes, France increased Asia’s attractiveness for Tech

On January 9, 2012, Eric Schmidt, the former CEO of Google who made a recent visit with Hollande this past Monday tweeted a New York Times article on China’s humble roots in technology. Patrick McGovern, the founder of the International Data Group, and investor of one of China’s most successful internet companies quipped, “When I went to China for the first time in 1978, I saw workers stringing together computer memories with sewing needles…there is another kind of innovation that results in constant improvement that we are not good at — and they are. Now innovation is accelerating, and in the future, patents on smartphones and tablets will be originated by the Chinese people.” If the best that can come out of the meeting with Eric Schmidt is billion dollar tax bargaining scheme, France is doomed for failure in tech relations.

8. French Presidents are allergic to Google

Sarkozy wanted Google to pay more taxes, too. Nicolas Sarkozy, now enjoying a retreat from the political spotlight, drafted unfruitful plans on a taxation project for Google. Jacques Chirac launched a “Quaero” internet search engine that could compete with the US. Do you use Quaero?

9. The French bill is about fairness

The French bill is about FairnessMinister of Digital Commerce, Fleur Pellerin, Prime Minister Jean-Marc Ayrault, Minister of Culture and Communication, Aurélie Flippetti, are currently drafting a bill to work alongside the press and search engines that will reach fair and negotiable remuneration indices for online content. However in achieving fairness is this just another means of administering internet justice? Echoing the words of Carlos Castilho, a Brazilian media pundit of Observatorio da Imprensa, “news is everywhere today and to surround it with walls of copyrights is like trying to dry ice.”

10. We don’t have internet IP law enforcement, yet

According to Business Insider, the Drudge Report is currently “one of the most successful and profitable digital media businesses on the planet.” The New York times, a credible news source that has a monthly subscription business model and thousands of staff and the Drudge report which runs on a modest-sized staff and an aggressive advertising business model, both accumulate between 14-17 million views per month. The Drudge report, similar to Google News, finds headlines, manipulates titles and organizes content. The success of the model is based on a symbiotic relationship between the digital media businesses that provide the content who then reap hundreds of thousands of viewers from Drudge’s effort to promote news stories. The current trend of Upworthy, Gawker, and other blogs is not to create media content but to curate it. Thus the France vs. Google debate unearths a pressing issue of digital journalism standards of advertising and intellectual property rights.

Credit:
Chyi, H. I. & Lee, A. M. (2012). Theorizing online news consumption: A structural model
linking preference, use, and paying Intent. Paper presented at the 13th International Symposium on Online Journalism, Austin, TX, April 20-21, 2012.