January 10, 2013
IN 2011 Google spent over ?100m ($130m) on grand 19th-century digs in Paris which look a little like the Elysée Palace, the official home of the president. That may have been a mistake. The firm?s deep coffers have now attracted the attention of Xavier Niel, an entrepreneur who delights in making pots of money at the expense of the establishment.On January 3rd Mr Niel?s company, Free, which is France?s second-biggest internet-service provider (ISP), upgraded the software on the modems it supplies to customers. Online ads were blocked by default. The move, which was aimed chiefly at Google, caused a massive rumpus.The American firm had reportedly been in negotiations with Free over whether to pay the ISP directly for the connection to its subscribers. On the internet, the convention is that ISPs such as Free cover the cost of their networks by charging their subscribers rather than providers of content. Google is accustomed to grumbles by ISPs that it does not contribute directly to the cost of their networks. It is also used to governments, such as China?s, blocking its services for political reasons. But never has it faced an attack of this type from a private company.Free was showing its clout by threatening to damage Google?s advertising-driven business model in France. Mr Niel?s calculation was that few of his 5m-odd customers would leave just because the default...
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