EU fines Google; Apple Faces US Lawsuit

Google was fined $270 million by France’s anti-trust body over copyright protections for news snippets, which the tech giant allegedly disregarded. And in an almost parallel instance, arch-rival Apple has been sued by the US Department of Justice, which accused it of monopolistic smartphone practices. 

For Google, the latest crack down from France has been an ongoing saga with the country though the latest penalty comes for using news publishers’ content to train its generative AI model for Gemini (a.k.a. Bard). The Autorité de la Concurrence, which announced the fine, found fault with Google’s failure to notify publishers of using copyrighted content. 

The French regulator said Google’s actions were in contravention of earlier commitments that sought to ensure a fair payment discussion with publishers over reusing content. Readers would recall that the EU had passed a digital copyright reform in 2019 that extended copyright protections to news headlines and snippets. 

This was meant to ensure that Google News and others that crawled websites and displayed headlines on their products get into a financial agreement to do so. Google had sought to evade this law by shutting Google News in France and named its unilateral action as an abuse of a dominant market position that harmed publishers. 

Apple faces the heat over using its ecosystem to monopolize

Meanwhile, across the Atlantic, US authorities have sought to clamp down on arch-rival Apple’s “monopolistic smartphone practices” stating that consumers need not have to pay higher prices because companies violate the antitrust laws. It says Apple’s ecosystem play was evidence of anticompetitive practices including the blue and green bubble colors used by Messages to distinguish iOS from Android users. 

US Attorney General Merrick Garland said in a statement that if left unchallenged, Apple will only continue to strengthen its smartphone monopoly. Sixteen state attorneys general have pleaded themselves into the lawsuit that could well become a major legal battle between the richest company in the world and one of its largest markets.  

Google has a long history with the French

Coming back to Google’s misdemeanors, the antitrust ruling in 2019 forced it to cut deals with local publishers though two years down the line it was hit with a $592 million fine after the authority found major breaches in its negotiations with local publishers and agencies.  Of course, the tech giant labelled the fine as “disproportionate” but sought to settle it amicably with pledges to publishers and a commitment to not appeal. 

This time round, Google seems to have followed the same beaten path once again. Having signed copyright agreements with hundreds of French publishers, the company sought to use it to train its GenAI models. The latest penalty has once again resulted in Google agreeing to not contest the findings in exchange for a fast-tracked process. 

However, Sulina Connal, Google’s head for news and publishing partnerships, took to the company’s blog to claim that the fine was not proportionate to issues raised by the French antitrust authority. It goes on to say (in French) that it wants to close this chapter. “We’ve settled because it’s time to move on and, as our many agreements with publishers show, we want to focus on the larger goal of sustainable approaches to connecting people with quality content and on working constructively with French publishers,” says Connal. 

Why is Google seeking to close things amicably?

That Google is seeking to close things fast is a sign of desperation as competitors are now scrambling to make their GenAI tools smarter. Usage of content from news publishers for training its AI foundation models is something that could either halt Gemini’s progress or create major monetary challenges for Google, Microsoft and others in this field. 

The point Google is now seeking to make in response is that use of web content to enhance GenAI products is already addressed in Article 4 of the EU Copyright Directive. However, the French antitrust body says it hasn’t been determined whether an exception set out in the above directive over text and data mining actually applies in this case. 

But, the French body isn’t letting go that easily

“When it comes to declaring whether using news content to train an artificial intelligence service falls under neighboring rights and protection, this question has not been answered just yet. However, the Autorité considers that Google has breached its commitment #1 by failing to inform publishers that their content had been used to train Bard,” the statement issued by the French body says. 

The French antitrust body further notes that an incoming requirement on AI model makers to publish a training data summary that could help publishers to obtain remuneration for protected content that gets ingested into GenAI training. The body also notes that Google had failed to provide an opt out for producers till September 28, 2023 from allowing their content to train GenAI without such a decision affecting their display rankings. 

“Until this date, publishers and news agencies that wanted to opt out of this use case had to insert an instruction that blocks all content indexation from Google, including for Search, Discover and Google News services. Those services are specifically part of the negotiation for revenue related to neighboring rights. In the future, the Autorité will carefully look at the effectiveness of Google’s opt-out processes, the statement said.”

Can Indian Lawmakers sit up and take notice?

On the Apple front, the DoJ says the lawsuit focuses on iPhone’s market share in the premium smartphone segment where the company is increasing friction to those seeking to switch to the competition. This includes “contractual restrictions” and a vetting process that the App Store has in place. 

The US regulators say suppression of five categories including “super apps”, cloud streaming gaming apps, messaging apps, digital wallets, and smartwatch across platform compatibility as examples of this. Readers would be aware that some features of apps work correctly only when paired with other Apple devices. 

Instead of responding to competition by lowering smartphone prices or better monetization for developers, Apple was doing so by imposing “a series of shapeshifting rules and restrictions in its App Store guidelines and developer agreements that allows it to extract higher fees, thwart innovation, offer a less secure or downgraded user experience and throttle competitive alternatives,” the DoJ’s complaint says. 

We wonder if lawmakers and consumer protection bodies in India would get buoyed by these two instances to push the envelope against the Big Tech giants seeking to monopolise local data for their own gains. We had written a detailed post after the EU’s penalty on Apple and how Google was playing truant with Indian antitrust authorities. 

Let’s hope our lawmakers are on the ball, even if many would be busy in important matters such as getting re-elected to the Lok Sabha!