[A2k] Politico: Plan to make Google pay for news hits rocks

Thiru Balasubramaniam thiru at keionline.org
Fri Feb 17 00:45:30 PST 2017


Plan to make Google pay for news hits rocks

The adoption of a so-called publisher’s right would reverberate around the


2/15/17, 7:36 PM CET

Updated 2/16/17, 11:53 AM CET

BERLIN — Europe’s press barons thought they’d scored a major victory last
fall when the European Commission threw its weight behind their idea to
create a special protection for digital journalism, the linchpin of their
strategy for long-term survival. But now the plan threatens to come undone.

Advocates of the reform say it would force the globe-spanning fat cats of
the internet — platforms like Google, Facebook and LinkedIn, which use
outside news content to attract eyeballs without paying a single cent — to
compensate Europe’s publishers for use of their content. Much as radio
stations pay fees to music publishers to play their songs, the companies
would compensate news outlets for carrying their content.

If the reform goes through, the victory would reverberate around the world,
with publishers in other regions likely to demand similar treatment. Less
than six months after the Commission unveiled its proposal, however, the
prospects for a so-called publisher’s right are murkier than ever amid
growing doubts the plan can win enough support in the European Parliament.

“Other stakeholders are challenging the provision … questioning not only
whether this is the best way of addressing concerns of press publishers
vis-a-vis digital technologies, but also questioning whether the Commission
proposal is adequately restricted to such concerns,” Therese Comodini
Cachia, the Maltese rapporteur shepherding the proposal through Parliament,

Translation: Opponents of the plan, including some small web publishers,
worry it could choke traffic to their sites by creating a thicket of
regulations that will dissuade Google and other platforms from driving
users to them. These critics also argue that a publisher’s right will
create a “link tax” (a phrase that supporters liken to a slur) but won’t
achieve its backers’ main aim: to save the news sector’s broken business

Mounting opposition

It’s too early to say whether the proposal will founder, but it’s at a
critical stage. In recent days, a number of European countries have
expressed doubts about the plan, according to senior officials involved in
the talks.

Dutch diplomats are among the most skeptical, people close to the
negotiations say. British and Estonian diplomats have also voiced

“If the protection of intellectual property is not ensured, then publishers
have no perspective in the digital future. And anyone who says otherwise …
is either lying or distracting” — Mathias Döpfner, CEO of Axel Springer and
president of the German newspaper publishers’ association

Comodini Cachia will present a report next month, including suggested
amendments to the proposal, but it’s unclear whether the hard protections
demanded by the publishers will survive.

The center-right European People’s Party, the largest group in Parliament,
broadly supports the initiative, while around half of the Socialists &
Democrats back the plan. But that may not be enough. So far, France, Italy
and Spain are the only countries openly supporting it.

Even before the ink had dried on the Commission’s proposal, an unlikely
coalition of internet activists and Silicon Valley lobbyists mobilized to
attack it.

The plan’s loudest critic has been Green MEP Julia Reda. Originally elected
as a member of the Pirate party, Reda’s encyclopedic knowledge of copyright
has made her a respected adversary for the publishers. She’s shown a
particular knack for condensing the legalese of copyright reform into
alarmist soundbites. She has argued, for example, that the Commission
proposal could affect how articles are shared on Twitter, something both
the Commission and the publishers deny.

“The problems of the newspaper industry are not copyright,” said Reda.

Old media vs new

The publishers, who have been lobbying for the reform for years, see the
not-so-hidden hand of Google in the attempts to undermine their effort.

The Commission’s proposal “would hurt anyone who writes, reads or shares
the news — including the many European startups working with the news
sector to build sustainable business models online,” Google said in a

But the publishers argue the search giant, through Google News, is the main
beneficiary of their online content,  because news is one of the main
things people search for online.

Julia Reda from the Group of the Greens/European Free Alliance | Patrick

Google downplays the benefits it derives from such content, noting that it
doesn’t sell advertising alongside news. What’s more, publishers profit
from traffic Google sends to their sites, the company argues. Trouble is,
less than half of online readers click on the link that would take them to
the publishers’ websites. Most online users read only the headlines and
short article summary, or “snippet,” on sites like Google, according to EU
data. That means the publishers get no traffic and thus no advertising
revenue from those readers.

What worries smaller news websites and blogs that rely on traffic from news
aggregators and search engines is that Google and its peers could simply
refuse to pay and stop carrying news. That’s what happened in Spain when
the government passed a similar law a few years ago. Google shut down
Google News there in response. That hasn’t been such a problem for large
newspaper and magazine publishers because readers simply go directly to
their websites. But critics say that for smaller, less-known brands, it’s
been more of a challenge.

Germany passed a similar, albeit weaker, law a few years ago. Google
rendered the legislation all but meaningless, however, by only carrying the
news of those publishers who agreed to be featured on its site for free.
Those who initially refused suffered steep declines in traffic and
subsequently relented. The issue is now tied up in the German courts, where
a consortium of publishers is suing Google.

That’s one reason why the publishers are seeking a tough European law. Only
then, they believe, will they have enough leverage to force Google’s hand.

News purveyors cast their struggle in stark terms. If what industry
executives refer to as the “expropriation” of their content doesn’t end,
Europe’s press will wither and die, the publishers say. In other words,
it’s not just their financial well-being that’s at stake, but the survival
of democracy itself.

Part of the problem is that for years publishers have been giving away for
free the content they now are trying to protect.

“The reform of European copyright law is the basis for everything,” Mathias
Döpfner, CEO of Axel Springer and president of the German newspaper
publishers’ association, said in a recent speech. “If the protection of
intellectual property is not ensured, then publishers have no perspective
in the digital future. And anyone who says otherwise and casually calls on
publishers to be more creative and to develop new business models is either
lying or distracting.”

Money troubles

Though a publisher’s right is supported by a broad coalition of European
newspaper and magazine publishers, Springer, which owns the Continent’s
largest daily, Bild, and is also co-owner of POLITICO in Europe, has been
among the most vocal advocates for the reform, together with Spanish
publishers, such as Vocento, the newspaper group. Even as the companies
invest more and more in digital ventures, sustained declines in their
legacy print businesses are hitting them hard.

In the four years from 2010 to 2014 alone, print revenues at Europe’s
newspapers and magazines declined by €14 billion, according to a recent
study by accounting giant PwC. Digital revenue during that period only rose
by €4 billion, leaving a €10 billion hole in the industry’s balance sheet.
The gap is expected to widen in the coming years.

Part of the problem is that for years publishers have been giving away for
free the content they now are trying to protect. They bet, wrongly as it
turned out, that they could parley a large online audience into lucrative
ad revenue.

After conditioning readers not to pay for online content, the publishers
have faced difficulty implementing subscription models. The U.K. tabloid
Sun, for example, introduced a paywall in 2013 only to abandon the idea a
couple of years later.

The blurry economics of online news has complicated the publishers’ case.
There are no reliable figures for how much revenue the Commission’s
proposal would provide publishers. In Germany, publishers estimate their
online revenue would jump 10 percent, according to the Commission.

While that’s not insignificant, critics of the plan point out it’s unlikely
to be enough to rescue the industry.

For decades, the publishers’  business model relied on pooling information
into one source. Newspapers were a one-stop shop, not only for current
affairs and analysis, but for movie listings and classified ads for
property, autos and jobs. With the emergence of online competition such as
eBay and Google, the publishers have lost much of that business.

That’s why opponents of the publisher’s right, including a number of MEPs,
argue these underlying challenges to the industry’s business model have
nothing to do with copyright.

The publishers counter that it’s not up to Parliament to analyze the merits
of their commercial strategy. What’s at issue is a basic question of
ownership, and the publishers say it is incumbent on legislators to protect
their rights. In the pre-digital age, such protections weren’t necessary
because news content didn’t fall victim to large-scale piracy. The
internet, the publishers argue, has changed that because articles can be
disseminated far and wide with a few clicks.

“I want journalists, publishers and authors to be paid fairly for their
work, whether it is made in studios or living rooms, whether it is
disseminated offline or online” — Jean-Claude Juncker, during his State of
the Union speech in September

On its face, the issue is simple: The works of filmmakers, musicians and
book publishers are all protected by copyrights that prohibit their
distribution without a license on- or offline. For decades, radio stations
have paid royalties every time they play a song, whether it’s Elvis or
Beyoncé. Why then, shouldn’t journalistic works be afforded the same

A short-term windfall may not be the point. The publishers’ primary aim
appears to be to enshrine the basic principle that they own and control
their online content into European law. Given the pace of technological
innovation, that could prove crucial in the future.

Powerful allies

As publishers confront the strategic challenges of the digital age, they’ve
also turned to some of their oldest allies for help — politicians.

For all the business challenges they face, newspaper and magazine
publishers remain a potent political force in most countries.

In Germany, for example, Springer, which publishes both Bild and the daily
Die Welt, plays a central role in influencing public opinion. The publisher
has cultivated relationships with Germany’s political class for decades and
enjoys especially strong ties to Angela Merkel’s Christian Democrats.

Friede Springer, the German publisher’s dominant shareholder, has a close
personal relationship with Merkel, for example. Indeed, it was Merkel ally
Günther Oettinger, until recently digital commissioner, who helped
spearhead the Commission’s latest copyright push.

Other influential publishers, including Sweden’s Bonnier and Spain’s PRISA,
which publishes El País, are also pushing the Commission’s proposal. In
Spain, Prime Minister Mariano Rajoy was an early and vociferous backer of
the idea.

The previous Commission under President José Manuel Barroso, had been
lukewarm to it. That changed, however, under Commission President
Jean-Claude Juncker, a conservative like Merkel and Oettinger who also
benefited from Springer’s support in the German press.

The publishers’ seductive logic convinced the Juncker Commission to take
action. More and more countries, including Austria and Poland, were
considering implementing national laws to deal with the issue. The
Commission was persuaded that would only create further confusion and that
it made sense to have a common European approach, similar to what it has
tried to achieve with data protection. Last September, the Commission
proposed a directive it said would improve “the position of rightholders to
negotiate and be remunerated for the exploitation of their content by
online services.”

The Commission claimed noble purpose, saying nothing less than the
“sustainability of the press publications sector” and by extension
“citizens’ access to information” were at stake.

Juncker made the reform top priority. Over the summer, members of his
cabinet met once a week with Commission Vice President Andrus Ansip and
Oettinger to iron out the details of the copyright strategy. It was
referred to as the “copyright club.” Such a high-level gathering on the
minutiae of a proposal was unusual, underscoring its importance to Juncker.

“I want journalists, publishers and authors to be paid fairly for their
work, whether it is made in studios or living rooms, whether it is
disseminated offline or online, whether it is published via a copying
machine or commercially hyperlinked on the web,” Juncker said during his
State of the Union speech in September.

Brexit uncertainty

One problem, though, is that the publishing industry hasn’t always spoken
with one voice. Part of the difficulty is ideological. Publishers that have
competed for decades across the political divide in countries like Spain
and the U.K. found it difficult to join hands with their rivals. In
Britain, for example, the Guardian was reluctant to be seen cooperating
with Rupert Murdoch’s News Corp.

Brexit poses another challenge. With the U.K., home to some of Europe’s
most influential publications, on its way out of the EU, publishers there
are losing interest in the proposed directive, diplomats say.

About the only thing that’s clear at this stage is that the plan’s fate
will be determined in the coming months. By summer, Comodini Cachia, the
rapporteur, will have added Parliament’s amendments to the legislation and
there will be a crucial committee vote. If it passes, the broader
Parliament will then decide whether to make it law.

Despite the skepticism, the publishing lobby remains sanguine, confident
that its deep political connections will ultimately see the legislation

“The news media sector is optimistic that policymakers agree on the need
for a publishers’ right,” said Wout van Wijk, executive director of News
Media Europe, a lobbyist for press publishers. “Such a right will create
the legal certainty needed for further investments and innovation to
guarantee a free and pluralistic media landscape in Europe.”

Joanna Plucinska contributed to this article.

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