September 8, 2014

Dear Vice-President Almunia,

Your decision to reconsider Googles settlement offer comes at a crucial moment
in the history of the free flow of information and of a healthy media in Europe and
beyond. There is no doubt that the case is one of profound significance for many
media companies in Europe but also for the people of Europe, whose ability to
access information, independently and meaningfully, is put at risk by the
overwhelming power of Google. The company has evolved from a wonderfully
feisty, creative Silicon Valley startup to a vast, powerful, often unaccountable
bureaucracy, which is sometimes contemptuous of intellectual property and
routinely configures its search results in a manner that is far from objective.
News Corp has significant interests in Europe, including The Times, The Sun and
The Wall Street Journal Europe, and a network of local language business
newswires, as well as the HarperCollins book publishing business. We are not a
small company, and we do use Google products and partner with the company on
various projects (it would be impossible not to given the scale and influence of
Google) but our cherished content is vulnerable to exploitation. Benefitting
significantly from the efforts and investments of others, Google must do more to
ensure that rights are respected and that its powerful search platform is not abused
to eliminate competition.
While there are many, many honorable and thoroughly professional individuals
working at Google, we have learned not to be nave about the company. The
shining vision of Googles founders has been replaced by a cynical management,
which offers advertisers impressively precise data about users and content usage,
but has been a platform for piracy and the spread of malicious networks, all while
driving more traffic and online advertising dollars to Google. A company that
boasts about its ability to track traffic chooses to ignore the unlawful and
unsavoury content that surfaces after the simplest of searches. Google has been
remarkably successful in its ability to monetize users, but has not shown the
willingness, even though it clearly has the ability, to respect fundamental property
rights.
Sudden changes are made to the ranking and display of Google search results,
which inevitably maximise income for Google and yet punish small companies that
have become dependent on Google for their livelihood. Meanwhile, in recent
months, Google has developed a certification process for Android-related
products which allows it to delay or deny content companies and other businesses
access to the mobile operating system, while giving itself the freedom to develop
competing products. This development reflects the exponential evolution of
Google from a company that is open to one that is selectively closed and willing
to exploit its dominant market position to stifle competition.
It is worth pausing for a moment to contemplate how the world of content has
evolved, and why five years is an eternity in internet time. Virtually every
newspaper in Europe is in the midst of upheaval, and some will surely not exist
five years from now, in part because of their own flawed strategy and lack of
leadership, but also because the value of serious content has been commodified by
Google. The uniqueness of news sites has been undermined by aggregation of
content which transfers the front page to the Google home page. Readers have
been socialized into accepting this egregious aggregation as the norm. The second
phase of aggregation is that of the audience. By tracking readers and exploiting its
dominance in online advertising, Google is commodifying the audience of
specialist publishers and limiting their ability to generate advertising revenue. Data
aggregators attempt to sell audiences at a steep discount to the original source, for
example, access to 75 per cent of The Wall Street Journal demographic at 25 per
cent of the price, thus undermining the business model of the content creator. This
process is at a relatively early stage and needs constant monitoring to ensure that
abuses are halted and that there is a fair return for newspapers, publishers and other
investors in original content.
Clearly this habitual appropriation of content and audiences does serious
commercial damage, but there is also a profound social cost. The internet should be
a canvas for freedom of expression and for high quality content of enduring value.
Undermining the basic business model of professional content creators will lead to
a less informed, more vexatious level of dialogue in our society. There will be no
shortage of opinions, in fact, opinions will proliferate, but they will be based on
ever flimsier foundations. The quality of discourse will inevitably deteriorate and
the intemperate trends we are already seeing in much of Europe will proliferate.
Internet idealism is used by Google and certain other digital companies as an
injudicious justification for inappropriate business practices. Specifically on
search, there is clear evidence that Google systematically diverts users away from
relevant sites to its own related sites for commercial reasons. Googles illustrious
founders, Larry Page and Sergey Brin, sagely stated that since it is very difficult
even for experts to evaluate search engines, search engine bias is particularly
insidious. Unfortunately, Google no longer heeds that wisdom and warning (a
search for insidious quickly lead to pirate sites where the film of that name can
be viewed illegally). With video, Google routinely displays YouTube results at the
top of its search pages, even if YouTube is not the original source of that content
the reason for that bias is that YouTube gets a cut of the revenue and takes income
away from the company or person who created and posted that video.
We genuinely respect the sincere and arduous work that you have undertaken on
the case, but our close examination of the proposed remedies suggests that they
will not resolve existing problems yet alone deal with fast-developing challenges
that will inevitably become serious issues over coming years. The companys
power increases with each passing day, so to allow it five years to fashion the
future of content and to abuse its dominance in search would be a mistake of
magnitude. Google will certainly be the winner, and among the losers will be those
who create content and, undoubtedly, the people of Europe.
As you continue the investigation, we would be delighted to share with your team
our expertise and experience in search and on other matters related to the Google
case. We can provide both detail and context that would lead to a fuller
understanding of the short and long-term consequences of the Commissions
profoundly important decision.
Thank you for your serious consideration.