EU May Require Internet Companies to Pay Publishers for News
August 26 2016 - 12:20PM
Dow Jones News
BRUSSELS—News aggregators like Alphabet Inc.'s Google news
search may have to pay publishers to list snippets of articles on
their websites under plans by the European Union's executive body
to update the bloc's copyright rules.
The European Commission is slated to propose that national
legislation be allowed to require news publishers to claim
compensation from internet companies, according to an internal
document.
The document outlines the commission's preferred policy options
for its coming proposals to update the bloc's copyright rules,
expected in late September. The proposals are still being discussed
internally.
The possible EU move to pave the way for potentially lucrative
agreements between publishers and web giants could be a boon to
news publishers who have been hurting from falling revenue as more
readers consume news online.
But the draft rules could be a blow to internet companies like
Google who may now have to negotiate individual deals with
publishers if they want part of the newspaper articles to appear in
their news search service.
"This is not about an EU levy on search engines," said European
Commission spokesman Christian Wigand. "Our objective is to make
sure that Europeans can access a wide and diverse legal offer of
content."
Under current EU rules, publishers don't directly hold rights
for their publications but rather enforce the rights transferred to
them by the journalists and photographers they employ.
The potential new plans could allow member states to grant
publishers the right to directly claim compensation from the web
providers, in a bid by the EU to hand the publishers more
bargaining leverage when negotiating deals.
But similar initiatives in Spain and Germany haven't yielded
much financial support for publishers in those countries.
In the document, the commission notes that "none of these two
recent solutions have proven effective to address publishers'
problems so far," but says such a proposal could help by
encouraging more harmonized action at an EU-wide level.
A Spanish law requiring Google to pay publishers for displaying
any portion of their work led Google to shut down its news service
in the country altogether.
And in Germany, Google refused to pay for rights to publish any
content other than links and headlines and handed publishers a
choice: offer them free or face the removal of snippets and
thumbnails from its services like Google News.
German media company Axel Springer SE later granted Google a
free license when traffic from Google News and Google's search
engine plunged.
The commission says their proposal would differ somewhat from
the Spanish law because it would allow news publishers to negotiate
different types of agreements with web providers. It is therefore
expected to be more effective for them in the long run since it
would allow publishers to develop new business models in a flexible
way, the document says.
But the commission's solution may not work as envisaged.
"The market power of Google is such that many content owners
will choose not to charge the fees," said Matthew Jones, a partner
at intellectual property law firm EIP.
For publishers who may try to charge for access to their
content, Google could refuse to display their content.
"This could hurt the content owner much more than Google," Mr.
Jones said.
The negotiated rights could last anywhere between one and 50
years, though they would likely apply for a shorter period since
"the exploitation of news content takes place for a relatively
short period after publication," according to the document.
News Corp, publisher of The Wall Street Journal, earlier this
year filed an official complaint to the European Commission over
Google's practices with its news search service.
News Corp claims that Google reinforces its dominance in general
search by refusing to show articles at all if the publisher doesn't
consent to Google's habit of "scraping" or copying content from
publishers to display the results of news articles.
Write to Natalia Drozdiak at natalia.drozdiak@wsj.com
(END) Dow Jones Newswires
August 26, 2016 12:05 ET (16:05 GMT)
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