Axel Springer is at Google’s throat again. The German news-publishing giant (for which I worked in my days at Politico) has a long history of battling Google over the issue of so-called ancillary copyright fees—payments for carrying snippets of text and thumbnail images in search results. But now it’s waging war on another front: advertising technology.
Together with more than two dozen other European media groups, Springer yesterday launched a $2.3 billion lawsuit against Google in the district court of Amsterdam, which is a major European destination for antitrust damages claims. The publishing houses claim that Google has abused its dominant position in the adtech market, causing them significant losses in ad revenue and forcing them to pay excessive fees for using its adtech services.
What exactly is Google supposed to have done wrong? In the words of the claimants’ lawyers, the company has acted as “broker, auctioneer and sales agent at the same time,” representing all sides in the ad-buying process—and preferencing itself the whole way. “If we compare ad auctions to a stock exchange, Google would represent both sellers and buyers, while also owning the exchange itself, thus creating a clear conflict of interest,” they explain.
Google’s response to the suit is that it’s “speculative and opportunistic,” which is quite rich, given that Google had to pay a $268 million French antitrust fine less than three years ago over the same issue. Around the same time, the European Commission started sniffing around the firm’s playing-all-sides adtech model, and last June it formally charged Google for illegally abusing its position (if you’d like to see some neat diagrams of how Google’s strategy works, check out the Commission’s formal statement of objections). If it loses the case, Google would have to break up its ad business, which accounts for the vast majority of its revenue.
Oh, and the U.K. competition authorities are also investigating Google, and U.K. journalists and publishers are also suing Google, over the same issue again. So yeah, “speculative” indeed.
In my opinion, this suit is a far worthier crusade than Springer and its peers’ largely successful quest to wring fees out of Google and Facebook for what amounts to carrying links to articles. The immediate logic of that mechanism was always questionable—after all, news publishers already benefit from having traffic sent their way—and it is a big reason why Meta has recently pulled back from news, causing severe damage to the industry. (It’s worth noting that Springer has carried over similar logic to its recent deal with OpenAI, in which the AI giant pays Springer to train its models on articles from the likes of Politico and Business Insider. This time it may make more sense, given that the AI is ultimately designed to answer questions, rather than to send traffic to the source of the training material.)
But the underlying logic of ancillary copyright was always to get revenge on Google for stealing value from the publishers, particularly as it took over the online advertising industry. In that sense, this new lawsuit is a much fairer fight.
More news below.
David Meyer
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NEWSWORTHY
Tesla faces class action. A California judge has granted nearly 6,000 Black Tesla workers the right to collectively sue the company over alleged racial discrimination and harassment at its facilities in the state. According to Reuters, Tesla will be able to contest the tentative decision tomorrow, though it’s unlikely the judge will change his mind.
SEC probes OpenAI. The U.S. Securities and Exchange Commission is investigating OpenAI over its potential misleading of investors, the Wall Street Journal reports. It seems the probe is related to the company’s leadership fiasco last November, in which OpenAI’s board fired CEO Sam Altman for unspecified failures to be “consistently candid in his communications”—he then returned and the board was heavily overhauled. Per the Journal, the SEC is now looking at Altman’s internal communications.
Apple AI opacity. Apple workers backed a shareholder proposal to have the company be more transparent about whether it was using AI ethically. But, as Reuters reports, the measure was decisively defeated at yesterday’s annual meeting. CEO Tim Cook said at the meeting that Apple would reveal more about its generative AI plans later this year, boasting: “Every Mac that is powered by Apple silicon is an extraordinarily capable AI machine. In fact, there's no better computer for AI on the market today.”
ON OUR FEED
“We are very disappointed with this decision, as we want to engage constructively with policymakers.”
—Amazon responds to the banning of its lobbyists from the European Parliament, whose lawmakers are furious about Amazon’s unwillingness to engage with them over issues such as warehouse working conditions. Only one company has ever suffered the same punishment before: Monsanto, seven years ago, after it refused to engage with lawmakers over allegations of regulatory interference during the glyphosate cancer scandal.
IN CASE YOU MISSED IT
Exclusive: 29-year-old self-made millionaire Lucy Guo follows up her unicorn Scale AI with a $40 million Series A for new creator economy venture, Passes, by Rachyl Jones
Marc Benioff unleashed a 30-minute tirade about AI’s problems and ‘stolen’ data that made investors forget about Salesforce’s weak sales forecast, by Kylie Robison
Digital news outlets file lawsuit against OpenAI nearly identical to New York Times’ case, by the Associated Press
Universal Music Group and TikTok went to war over the use of music—now, their deadlock is getting worse and artists and creators are taking a hit, by Prarthana Prakash
Why Elon Musk and Kara Swisher aren’t speaking, according to the veteran journalist’s new memoir, by Paolo Confino
BEFORE YOU GO
Dodgy doorbell cameras. Consumer Reports has a great investigation out (coauthored by former Fortune journalist Stacey Higginbotham) into the willingness of Amazon, Walmart, Shein, and other online retailers to sell dangerously insecure doorbell cameras from Chinese manufacturers. Many aren’t even legal to distribute in the U.S. Experts say the retailers should be doing a lot more to vet the stuff that gets sold on their platforms.
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