• Tuesday, July 05, 2022

Publishers in Europe Take on Tech Firms

The European Union's new copyright regulations have triggered a struggle between publishers and tech corporations, which could harm both.
on May 04, 2022

France is on the front lines, since it is the first country to enact new legislation mandating digital companies to pay publishers for the right to distribute their news material online. Google was fined €500 million by French media regulators last year for "not bargaining in good faith." As a result, the search engine agreed this month to pay 80 magazine publishers €20 million per year. Facebook had already agreed to pay French publications in a similar way.

Expect escalation of hostilities. 

In 2019, Europe passed a new copyright directive after years of intense lobbying.

Although EU member states were scheduled to adopt the new standards by July 2021, 15 have failed to do so — and the rest are having difficulty implementing them. Publishers have the legal right to demand money for linking to their content once the new laws are "transposed" into local law. Negotiations – which are almost always contentious – are about to begin across the continent.

The issue is often existential for conventional publishers. Paper print industries have been destroyed by the internet, which has decimated classified and display advertising. Payments from wealthy Silicon Valley platforms are seen as a method for publishers to restore financial viability. Many people in Europe have become reliant on government subsidies to stay afloat.

Google and other platforms reply that they give publisher content visibility and readers. Many tiny European publishers agree. They are concerned that the new copyright regulations will provide them with tiny payouts while allowing digital platforms to limit their content's accessibility.

Politics is also a factor. A strong, independent press is essential for democracies. While the publishers' financial security has been harmed by decreased advertising revenue, they still wield political power - and politicians would rather avoid antagonising them.

The tug-of-war between Spain and Germany is exemplified.

The Ancillary Copyright Law, established by Berlin in 2013, allows publishers to request remuneration for showing fragments of their content. A claim of €1 billion was made by a group of 200 publishers. Google turned down the request. Although publishers quickly reversed course and requested to be reinstated in the platform's search results, they went to court against Google, only to have the European Court of Justice decide against them.

Madrid enacted its own "link tax" in 2014, with the goal of forcing Google to pay publishers. Instead, Google News was taken off in Spain, resulting in a huge decline in newspaper traffic. Small Spanish publishers were the hardest hit, and they spent years attempting to persuade the government to change its mind.

Late last year, Google News returned to Spain, thanks to a new copyright law that permitted publishers to negotiate directly with platforms.

Google and Facebook must now negotiate partnerships with local publishers on a country-by-country basis (as no true single market exists in a continent with multiple languages). Insiders believe they have no idea how much the platforms wind up paying - it may be a lot or nothing at all.

Regulators must authorise payment systems. When publishers refuse to accept an offer, the platform has three options: renegotiate, resolve the disagreement with the support of local authorities, or stop distributing the publisher's material. It's unclear how long a "very brief extract" should be.

Instead of promoting the production of high-quality journalism, critics fear that if the quantity of published articles becomes a primary element in determining rewards, it would encourage the production of low-quality items. If the fee is too high, Google, Facebook, and others may determine that displaying a publisher's material isn't worth the money, limiting the outlet's reach and operations.

Platforms recognise that great content is required to fill their searches and newsfeeds, but they are wary of supporting high-cost, low-read pieces. Internal studies have shown that much news is replicated, and that the loss of less competitive channels would not result in readers losing coverage of key events.

The final negotiations for Europe's landmark Digital Markets Act, designed to rein in Silicon Valley gatekeepers, were tinged with the platform-press feud. Publishers campaigned hard for a suggested change to be included at the last minute, which would have required search engines and social media platforms to offer uniform remuneration for press excerpts. It was turned down.

Despite this setback, the struggle appears to be on. Publishers are pressing for a "must-carry-must-pay" clause in the impending European Media Freedom Act, which former Pirate Party MEP Felix Reda labels a "must-carry-must-pay" clause.

The new copyright rules in Europe were created to help the free press. Instead, they may wind up harming it by restricting the flexibility of both sources and platforms, pushing small publishers into agreements they may not want, and supporting money-losing businesses.

Otto Lanzavecchia is an Italian journalist who presently works at Decode39 and Formiche.net. He focuses on international affairs, technology, and the ecological transition as a City, University of London alumnus.

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