Google threatens to destroy not only pop sensation Adele, but Britain's film and music industries. So why is No.10 in thrall to this parasitic monster?



The music and books retailer HMV and the music giant EMI are two of the grand old dames of Britain’s music industry. But the future of both these historic enterprises, with a pedigree of recording talent going back almost a century, is in doubt.

Together with other UK-based creative champions such as Warner Music as well as a host of imaginative, independent record producers, they are in danger of extinction — as is this country’s extraordinarily successful music business.

From Dame Vera Lynn to Tom Jones and The Beatles, Britain has long had the knack of producing music superstars capable of conquering the world. Indeed, we are still the world’s second- largest exporters of music.

Superstar: But what's the future for Adele?

Take our latest remarkable prodigy, Adele — a North London soul singer whose second album, 21, has spent ten weeks at the top of the charts, breaking Madonna’s record set in 1990. Like The X Factor winner Leona Lewis, she is a product of the BRIT School in Croydon, South London.

Artists like Adele, together with ground-breaking television production and gaming companies, have made the creative industries an important and growing sector of the British economy, accounting for seven per cent of total national wealth.

They ought to be a major theme in the Coalition Government’s much-vaunted growth strategy, as the country seeks to shake off the ghastly Labour legacy of the banking crisis, recession and a bloated public sector.

Grand old dame: But the future of recording giant EMI is being undermined by Google

But, as many of the key figures in our vibrant and very British recording and digital industries have told me, nothing of the sort is happening.

Instead, David Cameron — who only last week sent me, and I assume other City Editors, a letter promising to put the right conditions in place for a strong private sector-led recovery — appears to be pinning his hopes on the American behemoth Google as the best gateway to Britain’s digital future.

Cameron sees Google as an example to us all of how the nation can develop its creative and digital industries.

So why is Cameron so fascinated by Google, its wealth, trendiness, innovation and glamour? Could it be down to his media and strategy adviser Steve Hilton, the man described as the Prime Minister’s ‘best political friend’?

After all, Mr Hilton — who often wears T-shirts, pads around shoeless in No 10 and is described as a genius by admirers — has a direct line to the company.

His wife Rachel Whetstone, the former political secretary to Michael Howard when he was Tory leader, is Head of Communications for the company. Whetstone was godmother to Cameron’s late son Ivan.

And when she was promoted from being head of Google communications in Europe to the worldwide head in 2008, it required her to spend time at the company’s global HQ in Mountain View, in the San Francisco Bay area of California.

Power couple: David Cameron's media and strategy adviser Steve Hilton (left) is married to Rachel Whetstone, Google's Head of Communications

Hilton put his Tory strategist role on ice and duly followed his wife west. But he returned to Downing Street in September 2009. And with the recent departure of Cameron’s communications chief, the former News of the World editor Andy Coulson, from No 10, Hilton’s power base and influence over the Prime Minister’s thinking has been enormously expanded.

At the same time, the devotion of Cameron’s inner circle to Google has become even stronger. Indeed, the Prime Minister makes no secret of the fact that he believes Google offers the pathway to turning Britain — and East London in particular — into a new Silicon Valley.

Executives of the company are said to have had open access to the Prime Minister and all those around him in recent months. And in No 10, there is an overwhelming belief that Google holds many of the keys to bringing the digital revolution to Britain.

In a speech in November last year, Cameron disclosed that he had been meeting the leaders of Google to plot Britain’s digital future.

He said: ‘The founders said they could never have started their company in Britain.’ The reason? Google told him that the British ‘copyright system is not as friendly to this sort of innovation as it is in the United States’.

This all sounds innocent enough. But the fact is that Google was urging Britain to throw away decades if not centuries of intellectual copyright while at the same time lobbying governments all over the world in a bid to drive a coach and horses through the laws.

The reason is very simple. The company wants to plunder intellectual property —songs by Adele and other British singers — so that it can disseminate it free to anyone who logs on to Google anywhere in the world.



The more people who log on to Google, the more the company will receive in advertising revenue. And who isn’t going to log on if all their favourite pop songs are offered for free?

The Prime Minister, cocooned in his Downing Street bubble with his Google cheerleaders, seems blissfully unaware that, far from being an influence for good on the world wide web, Google has become a global predator ruthlessly gobbling up potential rivals such as YouTube and ‘stealing’ the creative work of writers, film makers and the music industry.

Significantly, other countries seem more aware of the huge cultural dangers posed by the digital giant.



A Federal Court in the U.S. ruled last month that a proposed settlement to Google's alleged exploitation of a copyright loophole was unfair.

Dominant: But the European Commission is investigating allegations that Google manipulates the market place by demoting competing websites and browsers to the lower orders of its searches

The irony is that Google is alien to much that Britain holds dear. It has no respect for private property.

Our Englishman’s Castle has been turned into public property by Google Earth — which offers aerial views — and Street View, created when an army of Google cars travelled the length and breadth of the country taking pictures of our streets and our homes to put on the internet.

It was during this process that unprotected computer data was harvested from thousands of homes. There is now no hedge high enough to protect ourselves from online snoopers or criminals.

Much of the fortune of Google’s founders Larry Page and Sergey Brin and its investors has been built on its astonishing success as an advertising vehicle — capturing some $28 billion (£17 billion) of advertising revenue in 2010.

So dominant has it become that it has helped to destroy great swathes of other media in its wake, from regional newspapers in Britain and the United States to business directory companies.

So dominant has it become that it has helped to destroy great swathes of other media in its wake, from regional newspapers in Britain and the United States to business directory companies.



As a result of allegations of anti-competitive behaviour in the advertising market, it is now facing full-scale monopoly inquiries on both sides of the Atlantic.

The European Commission has opened a preliminary investigation into charges that it manipulates the market place by demoting competing websites and browsers to the lower orders of its searches — less prominent positions on its pages.

Only this week there were reports that the Federal Trade Commission (FTC) may launch its own broad-based investigation into Google’s dominance of search engine space.

What Cameron and his team seem not to have understood is that Google and other internet service providers — by running roughshod over UK copyright and intellectual property — are in danger of destroying some of our premier creative industries.

Take HMV for a moment. Clearly, in the internet age a retail group selling CDs through its HMV stores, and books through its Waterstone’s shops, might look to be on a losing wicket.

But HMV’s chances of avoiding the knacker’s yard are not made any easier by an unrestrained and rampant Google.

In Britain, some 70 per cent of music sales are still in the form of CDs and come through the High Street, where HMV is now the main retailer following the collapse of Woolworths and Zavvi in the early part of 2009.

Google co-Founders Sergey Brin (left) and Larry Page have made a fortune - but have failed to plough any money back into the creative process

Continued dominance of retail — or High Street — distribution in the music industry is among the reasons that our recording industry remains a global powerhouse.

The industry’s ability to charge sensible prices for CDs and their spin-offs means that there is cash to invest in new performers and to keep the creative juices flowing by paying good royalties to established singers, orchestras and musicians.

One only has to switch on the computer, call up the Google search engine and type in the name of a star like Adele to understand why the digital channel is such a threat to the UK’s performers, and for that matter our whole creative industry.

Nine out of the first ten websites which pop up on Google’s search engine are run by pirates who have downloaded Adele’s output and offer it online far more cheaply than official copyrighted sites and High Street retailers.

In effect, Google has granted these piracy sites a licence to steal. Instead of the proceeds going into future investment in artists, it ends up in the hands of internet buccaneers.

In effect, Google has granted these piracy sites a licence to steal. Instead of the proceeds going into future investment in artists, it ends up in the hands of internet buccaneers.

What has this to do with David Cameron and the Coalition Government?

In its determination to boost the Google model and to encourage other internet search sites to follow it, the Government seems to believe the internet should be free and open to everyone.

Critics say that, at best, Cameron’s government is going slow, at worst being deliberately obstructive, in the implementation of the Digital Economy Act of 2010 which seeks to protect the nation’s intellectual property from thieves.

The Act gives the authorities powers to prosecute or even close down internet search providers that host pirates.

This would allow for genuine price competition on the web rather than an unfair war between the pirates and the legitimate outlets.

None of this might be enough to save HMV, or for that matter EMI or Warner Music. The latter two big record producers, the bedrock of British rock and classical recordings, are currently owned by the big banks after their private equity owners failed to make loan repayments.

They find themselves squeezed by the aftermath of the financial crisis on the one hand and the march of digital piracy on the other which has made it all but impossible to sustain heavy investment in new artists.

Google may have won over the hearts and minds of the Prime Minister and his aides, but all over the world it is increasingly recognised that the search engine is like a giant vacuum cleaner parasitically sucking up content from media companies, publishers, film makers and musicians without paying anything back into the creative process that produces such high cost entertainment.

At the same time it is controlling the advertising slots on the web in its own pursuit of profit. And despite the fact that it generates billions of pounds of income in Europe this unwelcome guest, which has located its European operation in low tax Ireland, paid just £9 million tax in Europe last year.

So has the PM been blinded by the enthusiasm of those around him who see Google as a force for good which can transform the economy and make this country a centre of digital excellence?

In fact, the monster does almost the opposite. It undermines investment in the very creative industries that have become such an important part of our national prosperity, and employ hundreds of thousands of people.

So the question is this: will the Government only be satisfied when every last independent book publisher and specialist music store has been closed, our recording industry hollowed out and investment in brilliant new artists — capable of taking on the world — has been eliminated.