Chiseled into the stone facade of the vacant Second Empire building at 8, rue de Londres here is the name of the French national railroad, a former occupant. Most recently, the site housed another conservative pillar of the French corporate establishment, the insurer AXA. The proud new owner is a company with a very different image in France, more bomb-thrower than bourgeois: Google.
Google, the Internet giant, acquired the building, around the corner from the Saint-Lazare train station, for an estimated 150 million euros (US$210 million) and Google employees are expected to move from their current nondescript Paris office by the end of the year.
The investment is part of a campaign by Google to win hearts and minds across Europe as it confronts legal, regulatory and political challenges on issues including privacy, copyright disputes, antitrust actions and taxation. The company is spending hundreds of millions of euros to try to demonstrate that it is a responsible corporate citizen and a valuable contributor to the local economy, not the willful opportunist it is often portrayed as in France.
Google executives said that their strategy had been formulated late in 2009, when they realized that their problems in Europe were more serious than in any other part of the world, with the exception of China, and could no longer be brushed aside with recitations of the company’s slogan: “Don’t be evil.”
“We were hearing from people in government, the media, in our industry: ‘You need to be more of a part of the culture writ large,”’ said David Drummond, the chief legal officer at Google. “We took these criticisms to heart, and we’ve been working to defuse these issues.”
“We’re really trying to work with folks in Europe to establish ourselves as more of a local player that is investing in jobs, in facilities, our physical presence, and all the ancillary things that come with that,” he added.
Drummond said he had adopted the role of Google’s “chief diplomat” in Europe, meeting regularly with politicians, business leaders and regulators. Other top executives, including Eric Schmidt, the former chief executive and current executive chairman, and Larry Page, the cofounder and current chief executive, have jetted to Europe to make speeches and to dispense chunks of the company’s US$36 billion in cash reserves.
Many of the investments seem to be tailored to align with issues of particular concern to local policy makers and populations. In Ireland, for example, where the bursting of a huge real estate bubble has left the economy in tatters, Google recently acquired, for 100 million euros, the tallest office building in Dublin, buying it from the government agency that is managing bad loans held by Irish banks.
UNDER INVESTIGATION
In Germany, where Google is under criminal investigation over whether its Street View mapping service broke laws on data protection, the company plans to open an Institute for the Internet and Society. The center, to be set up in Berlin with an academic institution still to be identified, will study issues like privacy in the digital era.
In France, where Google’s efforts to digitize books and other cultural material have been denounced as cultural imperialism by some critics, the new Paris headquarters will house what Google calls a European cultural center.
Employment is also a perennial concern in France, and Google says it plans to double its French payroll, to 500, over the next two years. Over all, the company plans to hire 1,000 new employees across Europe this year, Schmidt has said.
“We have been accused of doing these things sometimes only to clean our image,” said Carlo d’Asaro Biondo, a Google vice president who oversees the company’s business in southern Europe.
He insisted that the company’s motives were pure.
“All of these plans are ways to show respect to local cultures,” he said.
Google said that the campaign was working, with previously strident critics recently having softened their tones.
French President Nicolas Sarkozy once declared: “We are not going to be stripped of our heritage for the benefit of a big company, no matter how friendly, big or American it is.”
However, when Google announced plans for the cultural center in Paris, Sarkozy said he welcomed “Google’s important investment to be made in France, in addition to the dialogue between Google and people who play an important role in the French culture.”
Google cites a series of other successes in recent months. It settled antitrust complaints in France and Italy. It signed book-scanning agreements with national libraries in Italy, Austria and the Czech Republic. It reached an agreement to scan and sell digital versions of out-of-print books from Hachette, the biggest French publisher. YouTube, Google’s video service, signed royalty-collection agreements with music copyright societies in several countries.
Yet potentially far bigger issues remain unresolved. In addition to privacy questions in Germany and elsewhere, Google is being investigated by the European Commission in Brussels in connection with possible antitrust violations. The commission is looking into its dominance of the Internet search business.
Google is only the latest of a number of big US technology companies, including IBM, Intel and Microsoft, to cause upset in Europe. Microsoft fought a battle more than a decade long with the European Commission’s antitrust authorities. Now the tables have turned in Brussels, and Microsoft is among several companies that have filed antitrust complaints about Google.
ORDINARY EUROPEANS
That is business. However, Google executives said they were worried that anti-Google sentiment could be felt more deeply among ordinary Europeans, given the myriad ways in which the company’s services touch their lives.
So, in developing their response to the challenges, they spoke with executives of other US cultural icons that have faced hostility in Europe. These include McDonald’s, which had a restaurant trashed by the anti-globalization protester Jose Bove when it was under construction in 1999, and Euro Disney, the operator of the Disneyland Paris theme park, which was denounced by one French critic as a “cultural Chernobyl” when it opened in 1992.
“They told us, ‘We went through that; you need to deal with it,’” d’Asaro Biondo said.
Dealing with it is vital for Google because of the size of the European market and its importance to the company’s growth. Google does not break out financial figures for Europe, but it says that one country alone, Britain, generated US$3.3 billion in revenue last year, or more than 11 percent of the global total.
Some of Google’s new initiatives align neatly with the company’s overall commercial goals. Under a program that began in Poland and has been extended to other European countries, for example, Google and local telecommunications operators act as free Web hosts for small businesses to help them create an Internet presence. In return, Google benefits when some companies become customers of its advertising services.
In March last year, the company created a forum in Berlin that gathers opinion leaders from German academia, Internet advocacy groups and business to debate legal issues affecting the digital economy.
Max Senges, a former human rights activist who oversees the program, said he coordinated his activities with Google’s policy group, which includes the company’s lobbyists in Berlin, and occasionally met and spoke with German government officials on legal issues. But he said the main focus of his work was to stimulate a broader German debate over an appropriate legal landscape for the digital economy.
“We are not lobbying Google’s own agenda here,” Senges said.
“What we are trying to do is stimulate a debate to improve the use and availability of the Internet for as many people as possible,” he added. “At Google, we have a saying: ‘What is good for the Internet is good for Google.’ That is what we are doing.”
In a 182-page report released last month, a panel of 43 experts assembled by Google argued for changing and limiting German copyright law to ease the online publication of copyrighted works — a step that would help Google.
“Frankly, this debate is needed in Germany,” said a Berlin lobbyist who works for one of Google’s global competitors, who declined to be identified by name because he did not want to comment publicly on a rival. “But of course Google is also looking out for its own corporate agenda.”
ADDITIONAL REPORTING BY KEVIN J. O’BRIEN
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