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Google News-ster, Books-ster, YouTube-ster, Android-ster -- Google's Disrespect for Property Part 13
Submitted by Scott Cleland on Fri, 2012-11-02 12:03
Newspaper and magazine interests in Germany, France, and Brazil are fighting back against Google News' monetization of their headlines and property without compensation by urging lawmakers to pass laws requiring royalties or revenue sharing for ancillary copyright use of their core product news, per AP and NYT reports.
This piece supports three conclusions.
By way of important background, a decade ago, Napster hollowed out the music industry's revenues by facilitating mass "free sharing" of proprietary music via 25 million peer-to-peer users pirating 80 million songs. The political justification for this mass piracy stemmed essentially from Stewart Brand's infamous notion: "information wants to be free" because the Internet makes it near free to distribute; and from Richard Stallman's notion that software should be free and his initiation of the free software movement which ultimately spawned the open source movement. To advance these political notions, digital property rights needed to be demonized as unfairly keeping information of any kind from the public who have an equality right to know and have what others know and have.
Google's Napster-ization Modus Operandi to Preserve and Extend its Monopoly
Google has zealously and repeatedly brought its mass property infringement modus operandi and Napster ethic to several industries: to media with Google News in 2002; to books with Google Books in 2004; to video programming with YouTube in 2006; and to mobile software with Android in 2007.
In each case Google willfully, proactively, publicly, and politically justified their serial copying of others property without permission as either: fair use, Schumpeterian "creative destruction;" "innovation without permission," freedom of speech, openness, and/or a selfless gift to humankind.
Bringing this back to attempts in Germany, France, and Italy to update ancillary copyright law to require Google News to pay royalties or revenue share for the use of their proprietary links, Google's latest PR narrative is that a law requiring payment for using property that makes Google money is not a normal cost of doing business but is a government "tax."
There have been a slew of proprietary challenges to Google using headlines and news snippets without payment, from Agence Presse, AP, Belgium papers, etc. When one types in "news" into Google, Google News comes up first, enabling Google to capture ~34% of the traffic from Google's billion plus search audience.
While Google News is ostensibly ranked the #4 most-popular, news site in the world, it is really a category of one -- world news leader -- because Google News is the only site that does not report its own proprietary news, but simply aggregates the best of the expensive proprietary news reporting of others without payment for their property. So Google completely dominates the 65 million person market for scanning news headlines, made possible by aggregating others' property without appropriate compensation.
By Google's last account in March 2012, Google has copied 20 million books without the authors and rights holders' permission and included them in Google's index, so users around the world can read a substantial amount of each of these books at no cost. Google has yet to pay authors anything, and has shown that it knows that it should pay because it offered to pay $125 million in the Google Book Settlement. That settlement was rejected by the Federal court for violating copyright, antitrust and class action law.
Copying and using 20 million books without permission provides Google with a unique anti-competitive advantage because no other law-abiding company would risk the copyright liability involved. Google risked it because it believed the risk/cost could be gamed, delayed, mitigated and contained, and that the business benefit was incalculable. Effectively Google is the only place in the world one can go to search the world's books. And having that most unique valuable information, enables Google to have an unmatchable advantage of understanding the semantic meaning of search requests, because it alone has the most data to build off of. The Google Books database also gives Google a similar unmatchable edge in language translation anti-competitively benefiting Google Translate.
In the Viacom vs. YouTube court decision, Judge Stanton said: "a jury could find that the defendants not only were generally aware of, but welcomed copyright infringing material being placed on their website..."
The undisputed facts of the case are: that YouTube was facilitating rapid growth of YouTube by encouraging mass uploads of copyrighted works right after the Supreme Court's unanimous Grokster decision; Google was well aware that they were adopting a risky copyright infringement strategy in acquiring YouTube and adopting their infringement strategy to leverage its first mover market position; and Viacom and Google were in active negotiations with Google-YouTube on a licensing deal for Viacom's infringed content for well over a year before they collapsed and Viacom filed DMCA takedown notices with Google-YouTube.
Google's willful copyright infringement has enabled Google to totally dominate online video distribution. Consider these eye-popping statistics. Google-YouTube now has >800 million monthly unique viewers; serves 21x more videos than its top competitor; has 8x more viewing minutes than its top competitor; is the only distributor netcasting in 60 languages; and had >trillion videos viewed in 2011 -- the equivalent of ~140 for every living person.
A YouTube Executive recently said: “There is a real desire for YouTube to be a global classroom and a global town square, not just a global living room.” Google CEO Larry Page boasted last month on Google's 3Q12 earnings call that: "Just flip a switch and get worldwide distribution, almost without doing any work… That's how we see the future. YouTube is going to be available everywhere."
Google has been sued by Apple, Microsoft, Oracle, Skyhook Wireless and others for patent and copyright infringement that enabled Google to bypass normal competitive rules and legal requirements to gain faster than legal entry into the mobile operating system business. Bloomberg just reported that the FTC staff have recommended an antitrust suit against Google for anti-competitive abuse of standards essential patents, after both the DOJ and EU objected to Google's anti-competitive behavior on standards essential patents in approving Google-Motorola.
Once again, Google has anti-competitively gained from profiting from others' property without permission, and by doing so has catapulted into the dominant market position in mobile -- that would not have been possible but for Google's mass infringement of others' intellectual property.
Google's willful infringement has enabled Google to rapidly dominate mobile ad distribution in addition to online video distribution. Consider these eye-popping statistics. There are now >500 million Android users on pace for >1 billion by 4Q13. There are 4x as many Android devices being sold than next largest competitor: Apple iOS. Google activates 1.3 million Android devices daily. Currently, Google-Android controls two thirds of the EU and U.S. mobile operating system market per ZDNet. Gartner projects the Google-Android operating system will be on more devices than any desktop or mobile operating system by 2016. And the clincher, Google controls 97% of global mobile search share.
In sum, if one connects the dots and looks at Google's systematic infringement behavior and IP public policy stance as an modus operandi to reduce its costs at the expense of its competitors and to gain a unique first-mover advantage (because no one else would take such flagrant legal risk), one can see Google's War on Property as central to the preservation and extension of its global search-related monopoly.
However, this is not just about property infringement; Google is engaged in at least a three-front world war to impose its global-no-permission-needed modus operandi and political values on the world via assumed acquiescence to Google's practices.
Forewarned is forearmed.
Google's Disrespect for Property Series
Part 1: Google TV: Dumb Content vs. Content is King
Part 2: Why Google's Motorola Patent Play Backfires
Part 3: Google 21st Century Robber Baron
Part 4: Google's "Infringenovation" Secrets
Part 5: Google's Piracy Liabilities
Part 6: Grand Theft Automated! Online Ad Economics Fuel Piracy & SOPA Opposition
Part 7: The Evidence Google's Systematic Theft is Anti-Competitive
Part 8: The Real Reasons Google Killed SOPA/PIPA
Part 9: Google's Rap Sheet
Part 10: Googleopoly IX: Google-Motorola's Patents of Mass Destruction -- Reneging on Competitively-Essential Contract Arrangements is Patently Anti-Competitive
Part 11: Four Under-Appreciated Implications for Google from Apple-Samsung Verdict
Part 12: What Made Apple's Steve Jobs So Angry with Google-Android?