CADE further investigates Google’s use of journalistic content

On 23 April, the Administrative Council for Economic Defense (CADE) unanimously approved the proposal of the Interim President, Mr Diogo Thomson, to launch an administrative proceeding to further investigate Google’s use of journalistic content, given technological advances since the 2019 administrative inquiry.

Commissioner Camila Alves endorsed Mr Thomson’s arguments, adding that is necessary to gather data related to the economic structure underlying production and value appropriation in the market relationship under analysis. Commissioners Carlos Jacques and José Levi expressed similar views. Former President Gustavo Augusto, rapporteur of the case, also amended his opinion to reflect that of Mr Thomson’s.

Background

The case originated after CADE’s determination, which identified the need to further investigate the competitive conditions in the search market and the vertically related news market, particularly regarding Google’s use of content produced by publishers.

Following the investigation, the Office of the Superintendent General (SG) concluded that there was a lack of evidence of antitrust violation and recommended that the case be dismissed, a decision upheld after an appeal.

The session began with Rapporteur Gustavo Augusto’s opinion in favour of the dismissal of the case. However, Interim President Thomson requested a review of the case for an in-depth analysis.

In-depth analysis

In his analysis, Mr Thomson highlighted that the conduct under investigation is not limited to the 2019 enquiry — characterised by the automated collection of journalistic content available on the web, followed by its partial display on the search engine’s results page, through headlines, excerpts and images, with potential impacts on traffic routing and publishers’ monetisation.

He claimed that the conduct has evolved significantly with the incorporation of features based on generative artificial intelligence, capable of synthesising information directly within the search interface. Thus, such technological transformation considerably changes the dynamics of access, visibility, and monetisation of journalistic content in the digital environment.

The relationship between Google and publishers could take on the characteristics of structural dependence, since a significant share of news outlets’ traffic relies on search mechanisms of the company under investigation to reach its audience. Such dependence, combined with the platform’s role as an essential intermediary, could facilitate the unilateral imposition of conditions for the use of content.

From this perspective, Mr Thomson developed the hypothesis that the conduct may be a case of abuse of dominant position. He proposed a specific analytical framework to assess conducts of this nature in digital markets, emphasising elements such as the structural dependence, imposition of commercial conditions, extraction of value, and competitive harm.

In addition, the interim president emphasised that the Brazilian Competition Law allows for the classification of exploitative practices, even if they do not fit perfectly within the traditional categories of abuse of dominant position.

Commissioner Camila Alves pointed the importance of a robust analytical and empirical review, particularly on the interpretation and explanatory power of the tests contained in the case records.

She highlighted that, in cases characterised by the heterogeneity of the functionalities analysed, the rapid evolution of digital interfaces, and the presence of relevant non-monetary variables, the aggregated traffic metrics, when considered in isolation, provide an important contribution without fully capturing the possible competitive effects under examination.

Mrs Alves mentioned the desirability of the SG proceeding with a more disaggregated data collection and assessment of evidence by functionality, search type, content category, and publisher profile, including metrics such as impressions, clicks, CTR, zero-click, query reformulation, scroll, dwell time, and referral traffic, whenever possible, on a comparative basis.

Finally, Interim President Thomson incorporated into the decision Commissioner Alves’ suggestions to the SG regarding the investigative measures.

Access case no. 08700.003498/2019-03

Check Diogo Thomson’s opinion: PDF OF DIOGO’S OPINION

Check Camila Pires Alves’ opinion: PDF OF CAMILA’S OPINION