German Competition Authority Decides To Take No Action Over Google's Removal Of Snippets From Google News

from the misusing-copyright dept

Almost exactly a year ago, Techdirt wrote about Google's decision to drop the use of news snippets from certain German publishers, who were members of the collection society VG Media, in a long-running dispute over "ancillary copyright", also known as the Google tax. VG Media lodged a claim against Google with Germany's competition authority, the Bundeskartellamt, in the hope the authorities would force Google to put the snippets back by licensing them. An interesting post on the Disruptive Competition (DisCo) Project Web site notes the Bundeskartellamt has now issued its ruling, and said that it will not open formal proceedings against Google over this matter:

The answer of the antitrust watchdog is simple: if an online service does not want to acquire a license for the display of snippets and hence only displays search results in a more limited, shorter version, it can do so. There is nothing in antitrust law that would prevent companies from doing so, even if they are found to be dominant on a given market.
The Bundeskartellamt's reasoning is quite simple:
Google announced that in future it would show search results relating to the websites of press publishers that were represented by VG Media in the legal dispute only in a reduced form if the publishers did not agree to a free-of-charge use of their work. Google justified this by claiming that otherwise it ran the risk of being sued for breaching the ancillary copyright.

The Bundeskartellamt considers this to be an objective justification for Google's conduct. Even a dominant company cannot be compelled under competition law to take on a considerable risk of damages where the legal situation is unclear.
The rest of the DisCo post explores research that shows the harmful effects Spain's Google tax has had on publishers in that country -- something that Mike wrote about back in July. The author of the DisCo analysis, Jakob Kucharczyk, has a good encapsulation of the problem common to all these attempts to introduce ancillary copyright:
The underlying flaw in this strategy is that these legislative proposals misuse copyright for industrial policy purposes. It remains unclear which problem or market failure these laws actually try to solve.
The question is: How long will it take European governments to grasp this point? And how much of their publishing industries will have disappeared when they finally do?

Follow me @glynmoody on Twitter or, and +glynmoody on Google+

Filed Under: ancillary copyright, germany, google news, snippet tax
Companies: google, vg media

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  1. icon
    That One Guy (profile), 24 Sep 2015 @ 4:00am

    Planning for the long-term

    Greed is certainly a big part of it, but the source article actually brings up a possible second motivation.

    'The recent study produced by NERA Economic Consulting at the request of the Spanish Association of Publishers and Periodical Publications has shed some light on this issue.

    According to NERA, smaller, less popular online publications have suffered the most from the introduction of the law which caused a significant online traffic decline. While the average traffic decrease to online publications amounts to more than 6%, the traffic decrease for small publications amounts to more than double the average, 14% exactly. NERA predicts that in the long-term this impact will even be greater, threatening the viability of some small online newspapers. This can hardly be a surprise. Smaller online publications which do not enjoy brand popularity derive significantly greater benefit from news aggregation services than large ones. Since the ancillary copyright literally shut down tools for people to find alternative sources of information, competition in the market for news publishing becomes distorted in favour of bigger publications, especially in favour of those whose brand is visible to people everyday on the newspaper stand around the corner.

    In a word: Competition.

    A snippet tax is a cash-grab pure and simple, but the version introduced in Spain, where it was mandatory hurt smaller sites much more than larger sites, despite the fact that the smaller sites would have loved to give search engines free license to use their stuff I'm sure, giving them a leg up over larger sites that would be forced to either do the same, or suffer losses to visitor numbers. Making it mandatory however removed that potential advantage, allowing larger sides to tough it out, while the smaller sites with less resources struggle much more.

    Everyone got screwed over, but the smaller outlets got it twice as bad. If I were one of those running the larger news sites, I imagine it might be worth taking the hit to visitors in the short term if doing so gutted the visitors of smaller sites, such that several of them folded. Once that happens, where do you imagine people will go to at that point?

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