Google creates €60m French media fund

Google has created a €60 million (US$81 million) fund designed to settle disputes with French publishers over lost revenues, providing an alternative to a proposed “link tax” that would have charged the company for posting French news content in its search results.

France is one of several European countries, along with Germany and Belgium, that has been in conflicts with Google. News publishers have argued that the company should be paying copyright fees for indexing news content because the search links result in lost advertising revenue and subscribers when readers don’t click through to publishers’ own websites. The “link tax” – which would make Google pay to republish news snippets – was floated late last year as a solution unless Google struck a deal.

Those issues are now resolved, under a two-fold initiative Google announced on Friday in an official blog post with French President Francois Hollande.

The first component of the plan is a €60 million digital publishing innovation fund aimed at pushing French publishers into the digital age, “to help support transformative digital publishing initiatives for French readers,” said Google Executive Chairman Eric Schmidt in the blog post.

The resolution of the link tax specifically was mediated by the French government on behalf of the publishers, according to a source with knowledge of the negotiations.

The second part of the plan is designed to improve Google’s partnership with French publishers to increase their online revenues using Google’s ad services.

“A healthy news industry is important for Google and our partners, and it is essential to a free society,” said Schmidt.

“This exciting announcement builds on the commitments we made in 2011 to increase our investment in France – including our Cultural Institute in Paris to help preserve amazing cultural treasures such as the Dead Sea Scrolls,” he added.

There is not yet a firm timeline on when the innovation fund will go into effect or how it will specifically be implemented, as the company is still working out those details.

The partnership aspect of the plan, however, suggests that Google and French publishers will be sharing certain technologies in an effort to avoid future copyright disputes. In that sense, the initiative is similar to a settlement Google reached with Belgian news publishers in December.

Under that agreement, both parties will promote each others’ services while Google pays the legal fees. The Belgian groups sued Google in 2006 for allegedly violating their copyrights.