LONDON — The Veuve Clicquot flowed last week as power-players in media, technology and politics rubbed shoulders at a Brussels reception hosted by the German publisher Hubert Burda Media. Among the guests was Günther Oettinger, commissioner for digital economy and a man whom European publishers have good reason to toast.
The German politician was instrumental in overhauling EU copyright rules — and European publishers see themselves as clear winners of the reform set to be unveiled Wednesday.
The proposed rules are “GREAT news,” said a media executive in an email.
According to leaked draft proposals, publishers will be entitled to demand compensation from Google and other internet companies when their journalism is reproduced online for commercial use without permission, such as in search results or news aggregation services.
The remaking of the EU’s copyright rules, which have gone without an update for 15 years, is the most contentious aspect of the Commission’s grand plan to create a single market for digital services. The reform would also allow musicians to negotiate with companies like YouTube or Soundcloud for a greater cut of their profits. And it comes the same day the Commission is slated to unveil a host of changes to the telecoms industry, including what are expected to be regulations for products such as WhatsApp and Skype.
“The Commission’s initiative to create a right for press publishers at EU level represents a historical and significant step,” said Carlo Perrone, president of the European Newspaper Publishers Association.
A group of powerful publishers — including Hubert Burda, which publishes the German news weekly Focus, and Axel Springer, whose titles include Die Welt, BILD and a share in POLITICO’s European edition — have been pushing for years to get compensation when third parties on the web reuse their articles.
Their fight is far from won, though. The proposal has to get through the European Parliament, where some MEPs have voiced strong opposition, and there are unanswered questions about implementation.
“The plan would break the internet as we know it,” said Marietje Schaake, a Dutch Liberal MEP, on Tuesday.
Critics charge that “old media” companies, in an effort to protect their declining legacy businesses and cover up for their failure to innovate technologically, will end up stifling the free exchange of information on the web. The reform, which would effectively erect paywalls around European news sites by making it illegal to share snippets of articles without permission, is bound to backfire because it will drive down traffic to those sites, critics argue.
Publishers say the reform will merely help tilt the balance of commercial power slightly back in favor of newspapers and magazines at a time when internet giants, especially American ones, have become gatekeepers of news for millions of Europeans, giving them the same protections as their counterparts in other media industries such as the film and music sectors.
“This right neither creates a tax on links nor does it prevent the sharing of links between individual users,” said Perrone. “It will enable press publishers across Europe to value and protect their editorial content in the digital environment which would highly benefit media pluralism, press freedom and cultural diversity.”
Publishers fight back
Publishers began to campaign for the new rules in February last year, when a group of newspaper executives from the European Publishers Council — an influential lobby group whose members include Axel Springer, Hubert Burda, the Guardian, Daily Mail and Rupert Murdoch’s News Corp — travelled to Brussels to meet Oettinger, Commission President Jean-Claude Juncker and Vice President for the Digital Single Market Andrus Ansip.
Their pitch: The internet is destroying our business. Without new sources of revenue, Europe’s free, pluralistic, privately-owned media can’t survive and that, they argued, would be a disaster at a time of rising populism and nationalism across the Continent.
“Those of us lucky enough to live in democratic societies often take press freedom completely for granted,” said Angela Mills Wade, executive director of the European Publishers Council. “But we cannot forget that our press freedom comes at a commercial cost and the independent, professional journalism that underpins our democracy relies on our publishers being able to profit from the content they produce and distribute. It’s that simple, so let’s not be distracted by disingenuous talk of breaking the internet and taxing links when neither will happen.”
Across Europe, traditional sources of revenue for newspapers and magazines, such as newsstand sales and print advertising, have plummeted as many readers instead get their news through third parties such as Google or Facebook. Despite building readerships on the web through digital editions, hopes of replacing the lost income with online advertising have proven illusory. According to forecasts by PwC, the newspaper market in Western Europe is set to decline by €8.3 billion between 2011 and 2020, about a fifth of the industry’s combined revenues.
The new rules give publishers a stronger hand to negotiate licensing agreements with companies such as Google and Facebook, potentially bringing in much-needed new sources of revenue, and to take legal action against “parasite” websites that systematically scrape and reproduce articles without permission.
Even those who support new laws, however, say it’s hard to see how they would be implemented in practice.
“We’re struggling to see exactly how it will work,” said one lobbyist in Brussels.
Under the draft proposal, the Washington Post, the Daily Mail or Buzzfeed, for example, would be within their rights to send a cease-and-desist letter or even a bill for compensation to a French or Polish news aggregator that showed a snippet of their articles to their readers.
Adam Rendle, a lawyer at Taylor Wessing, said it wasn’t clear from the leaked drafts exactly what would constitute infringement. Would the reproduction of a headline do it? A few paragraphs? An entire article? Or a series of articles?
“This is an early, leaked draft,” Rendle said. “We’ve got quite a bit of legislative process left to go through before this gets on the books. These problems may get ironed out as we go through this process.”
When parasites attack
At present, publishers argue they’re losing revenues to a crop of low-budget websites that systematically “scrape” their articles without permission or compensation.
In one case, a website took more than 22,000 articles from the German newspapers Frankfurter Allgemeine Zeitung and Süddeutsche Zeitung and made them freely available, without asking the publishers for permission. The newspapers took legal action against the website’s owner. But because of the complexity and uncertainty of German copyright law, the publishers said, it was time-consuming and costly to prove that their rights had been infringed. A clear, stronger legal right for publishers across all European markets will make it easier to force such parasite sites to buy licenses to use their content, or to get the courts to shut them down, the publishers argue.
In an impact assessment leaked last month, Commission officials estimated that the new rules would result in a 10 percent increase for the news publishing industry — a much-needed boost but not enough to secure the industry’s long-term survival.
And just because publishers have the right to claim compensation for reuse of their work doesn’t mean that the likes of Google and Facebook will start paying. Indeed, some news executives have worried that internet companies may simply drop news from its services altogether since Google and Facebook need news much less than publishers need the traffic.
When Germany passed a copyright law aimed at making Google compensate publishers for using snippets of articles, Google played hardball, giving publishers a choice: allow Google to continue using articles without paying or the company’s search engine would show only reduced links. Fearing a substantial loss of traffic, publishers backed down. When Spain passed strict rules making it compulsory for aggregators to pay when they displayed snippets of news stories, Google withdrew its Google News service from the country entirely.
Now, some publishers hope, Google is in more of a mood to cooperate.
The company, once dismissive of publishers’ concerns, has become more attuned to the financial risks facing the news industry, media executives who have worked with the company said. As an olive branch to European newspapers, Google launched the Digital News Initiative, a €150 million fund for developing innovative news products in partnership with publications such as La Stampa, El Pais and the Guardian.
Google is also mindful that its rival Facebook is increasingly becoming a gateway to news for European consumers. With that in mind, Google may also be willing to compromise with publishers to develop new ways of getting money from readers online.
Google already has a micropayments service, Contributor, which could serve as a foundation, several publishing executives said. Launched in the U.S. in 2014, and little publicized by the technology giant, Contributor allows readers to put a certain amount of money, say $10 a month, into a virtual “wallet” that is distributed to news sites as the user visits them, in return for the user not having to see advertisements on those pages. Google could roll out a modified version of the service in Europe to help encourage readers to start paying for news, those publishers said.