2 February 2021


How Google’s funding for journalism could threaten media pluralism

Big Tech has become a powerful patron to European journalism. But the millions of euros in financial support for media companies come with a catch.

by Alexander Fanta & Ingo Dachwitz

Over the past seven years, Google has spent more than 200 million euro to support European journalism. Its lavish funding has helped to boost innovation in publishing houses and Google also picks up the bill for conferences, fellowships, trainings and academic journalism research. This has made the tech giant popular among publishers.

Google’s help has come at a time when news publishers feel pain from declining revenue. The EU Commission has recognised the need for action. In December, it announced the “News” initiative for media funding and promised millions of euros in investment while further measure aim to boost media pluralism.

Meanwhile, funding from Google over the past years has supported innovation projects in news media in 30 European countries. Recipients of the Digital News Initiative (DNI) include Der Spiegel and Frankfurter Allgemeine Zeitung in Germany, Agence France-Presse and the Financial Times and the Daily Telegraph in the UK.

But Google’s support for journalism comes with a catch: its financial aid has helped to bolster incumbents in European media markets against new challengers; the digital giant has used its clout with publishers to further its political aims; journalists warn of potential self-censorship in a bid to not scare off the new patron.

These are three main conclusions from our study on the tech giant’s relationship with the media, “Google, the media patron”. The study was published by the Otto Brenner foundation with help from the German Trade Union Confederation (DGB).


An insulation against “Google taxes”


Google’s financial support for publishers goes back to 2013. Back then, the search giant faced pressure in Europe to share revenue from its online advertising business with media companies.

As the French government mulled a “Google tax” on online advertising, Google moved first. It pledged a 60-million-euro fund for publishers in a formal accord signed by Eric Schmidt, then CEO of Google with then-President Francois Hollande.

The French fund formed the template for its Europe-wide Digital News Initiative (DNI), which committed a 150-million-euro fund to support innovation projects. It ran from 2015 until 2019.

Of 645 projects we analysed, over 70 per cent of Google’s funding in Europe went to commercial media companies. Non-profit and public-service media received only 9 per cent [note from the editors: Voxeurop was among them in 2018]. Half of funded media were older than 20 years, with a vast majority of money going to Western European countries.

The DNI fund has helped media corporations to develop software for data journalism and newsroom automation, explore new formats such as virtual reality or launch new paywalls.


Google uses its largesse for lobbying


That major players were favoured is no coincidence. Decisions on DNI funding for large projects were taken by mixed board of Google figures, experts and publishing executives.

While Google funded major media companies throughout Europe, it was still locked in a tug-of-war with publishers associations over an obligation to share advertising revenues from Google News.

The EU copyright directive, which is yet to be transposed into law in most member states, is supposed to force Google to make huge payouts to publishers.

When first drafts of the copyright law circulated, the digital giant used DNI e-mail lists of publishers to lobby against these provisions. At the same time, Google provided funds to a new group called European Innovative Media Publishers that opposed the draft EU plans, to “help give small publishers a voice”, as the company told the authors.

While the company lost the battle over ancillary copyright, it has not ended its funding for established media companies. In 2019, as the DNI fund in Europe came to an end, the company announced a now global 300-million-dollar commitment within the Google News Initiative.

In contrast to its European initiative, which was not tied to Google’s commercial interest, the new initiative explicitly encourages publishers to use Google services such as “Subscribe with Google” and even pays them directly to create news formats on YouTube.

German media executives we interviewed as part of our study have voiced scepticism about using the Google service for reader subscriptions. “We try not to do anything where we became part of the product of someone else”, a manager at a legacy publisher said.


Google’s Showcase, a payoff to large publishers


While some publishers are reluctant to increase their technological reliance on Google’s services, most find it hard to resist easy money from the tech giant.

Earlier in 2020, while the pandemic caused severe advertising losses for publishers, Google announced another initiative. Google CEO Sundar Pichai pledged a billion dollars to pay publishers to “create and curate high-quality content” for a new product, Google News Showcase.

A few days ago, Google has reached an agreement with French publishers to pay for the reuse of snippets of their content. This is meant to fulfil obligations under the Copyright Directive’s neighbouring right, but Google says the agreement also covers participation in News Showcase.

The French announcement is a possible template for the future, in which Google blurs the line between voluntary “partnerships” with publishers and legal obligations from the Copyright Directive. According to industry reports, contracts for Showcase state the company has the right to “terminate the agreement if the publisher participates in a legal claim or complaint against Google”.

While US authorities have launched a major antitrust investigation against Google and the EU has launched preliminary investigations into Google’s advertising dominance, neither Google nor the majority of publishers grant full transparency about their relationship.

While it is laudable that the European Commission calls for more pluralism and diversity in the media landscape, the relationship between Google’s media funding and the tech giants growing technological stake in the distribution and monetisation of news remains largely unscrutinised.

Google is already under pressure about data protection issues in its advertising business, as well as concerns over conspiracy theories, hate and disinformation on YouTube and growing ties to the US military and intelligence community.

Never was media more needed to investigate Big Tech, rather than be its beneficiary. It is time for journalists, media scholars and regulators to put a Google Alert on “journalism and Big Tech”.