PARIS, Feb 23 (Reuters) - French antitrust investigators have accused Alphabet Inc’s (GOOGL.O) Google of failing to comply with the state competition authority’s orders on how to conduct negotiations with news publishers over copyright, two sources who read the investigators’ report said.
In the 93-page report, known as a statement of objections, the investigators wrote that Google's failure to comply was of an exceptionally serious nature, the sources said.
This comes amid complaints by French news publishers that Google failed to hold talks with them in good faith to find an agreement. The same publishers were not part of the $76 million three-year deal signed between the U.S. firm and and a group of 121 publications, as Reuters reported earlier this month.
The agreement was presented as a major step forward by both Google and the publishers who signed it, but left many publications infuriated.
The French competition authority can impose fines of up to 10% of sales on firms it deems in violation of its rules. Google's annual sales amounted to about $183 billion in 2020.
The investigative report is a key element in the authority's sanction process, but it is up to the watchdog's board, led by Isabelle de Silva, to decide whether to issue a penalty.
The biggest penalty ever levied by the French antitrust authority was against iPhone maker Apple Inc last year, with a 1.1 billion-euro ($1.34 billion) fine for anti-competitive behaviour towards its distribution and retail network.
A spokeswoman for the competition authority declined to comment.
In response to a Reuters request for comment, Google said in a statement: "Our priority is to comply with the law, and to continue to negotiate with publishers in good faith, as evidenced by the agreements we have made with publishers in the past few months."
"We will now review the statement of objections, and will work closely with the French competition authority," it said.
The French report on Google’s negotiating tactics comes at a time when countries around the world are pushing U.S. internet giants such as Google and Facebook Inc (FB.O) to share more revenue with news publishers. The issue gained international attention this week when Facebook banned all news from its services in Australia over a draft law there that would mandate arbitration.
According to the two sources, the French investigators say Google did not comply with requests from the watchdog to start negotiations with the publishers within a three-month deadline, and to provide all data the watchdog felt publishers needed.
The publishers' lobby that signed the deal with Google, APIG, did not immediately reply to a request for comment. French news agency AFP, and another media lobby group, SEPM - both of which did not sign a deal with Google - did not respond to requests for comment.
Reuters reached its own global deal with Google in January on terms that have not been publicly disclosed.
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