Eight of Germany’s largest travel startups have asked Google to cut them some slack on their ad payments to help them cope during the coronavirus pandemic.
The companies, including GetYourGuide, Tourlane, Trivago and Dreamlines, said in a letter addressed to Google’s chief business officer Philipp Schindler that while they have gone out of their way to offer customers no-questions-asked refunds during the Covid-19 crisis, Google has not shared the burden.
“In the Covid-19 era, leading companies from Germany and around the world have gone to unprecedented lengths for consumers… Google is opting out of sharing the responsibility,” wrote Christian Miele, president of the German Startups Association.
The US search engine company has been pressing for advertising and other fees to be paid as normal, putting many of these companies under increased financial pressure, according to the letter.
The eight companies owe Google around €75m for advertising services in the first quarter, but with close to no revenues since March, they are having to make drastic cuts to their business.
Flixbus and GetYourGuide have put around half of their staff on the German government’s Kurzarbeit scheme, which allows companies to cut staff hours with the government making up a portion of their lost salary.
Google, meanwhile, saw its advertising revenues increase to $33.76bn in the first quarter of 2020, from $30.59bn in the same quarter the previous year. Parent company Alphabet reported $41bn in revenue overall, a better result than many analysts had expected.
Google’s insistence on payment is proving especially controversial as the German government prepares to roll out a bail-out fund to help businesses hit by the Covid-19 crisis stay in business.
“Unless greater flexibility is exercised by Google, many of its advertising partners will be forced to use government loans to pay their debts. Badly-needed funding will flow into Google’s coffers on the backs of taxpayers in Germany and around the world,” the companies say in the letter.
The letter is understood to have the support of Peter Altmaier, Germany’s minister for economic affairs, as well as members of the FDP, CDU and Green parties.
Sifted contacted Google for comment but has not yet had a response.