The EU Copyright Directive’s Neighboring Rights for Press Publishers: A work in progress
Italy and Spain are latest in the line of European countries to adopt the European Union’s Directive on Copyright. The EU finalized the Directive on Copyright in the Digital Single Market in 2019 with the objective of ensuring “fairer remuneration for creators and rightsholders, press publishers and journalists, in particular when their works are (re)used online.” The Copyright Directive has been the subject of much debate, with Article 17’s requirement of prior authorization for uploading copyright protected content responsible for the bulk of the controversy. However, another section of the Copyright Directive that has garnered substantial attention is Article 15, which creates “neighboring rights” for press publishers for the online use of their publications. According to the World Intellectual property Organization (WIPO), ‘neighboring rights’ or ‘related rights’ are ancillary to copyright, and essentially enable press publishers to exclusively authorize or prohibit the use, reproduction, indexing or aggregation of their content, while ensuring that the legal and financial interests of persons and entities that have contributed to making the work available to the public (such as the original author) remain protected.
In a 2017 case study on the relationship between press publishers and online platforms, such as Google, where the authors interviewed senior strategy personnel from the management of press publishers, one such interviewee said that news outlets were being asked to sign up to a platform potentially not only as a short-term additional route to market, but in the long term as a competitor in their own field. “You are signing up with a competitor who has control over their own road map.” Additionally, the asymmetrical relationship between online intermediaries and the press publishers in terms of scale, reach and revenue also meant that rather than pondering over likelihood of engagement with internet platforms itself, press publishers were left pondering over the most beneficial terms that they could get from online platforms for the engagement. Through one lens, Article 15 is an attempt to address complaints from press publishers that online intermediaries undermine their business model.
Specifically, Article 15 extends to press publishers and original authors in EU member states the right to claim revenue from online internet platforms, search engines and news aggregators for their use of press publications for two years from the date of online publishing. This right extends to press publishers even when they are not the original author of the work (for example, when the original work has been created by a contracted journalist for the press publisher), so long as the original author(s) receive an ‘appropriate share’ of the revenue. As per the Recitals of the Copyright Directive, this article was intended to relieve the financial distress of the press sector and alleviate the struggle that the press publishers faced in adequately protecting their content from unlicensed online reproduction.
Article 15 came on the heels of various European countries struggling to address the question of how and to what extent internet platforms or online news aggregators should compensate news publishers for using their news pieces to generate advertising revenue. One of the earliest laws attempting to address this was Germany’s ‘Leistungsschutzrecht für Presseverleger’ in 2013, which restricted online news aggregators from reusing press publications until the payment of a central licensing fee (the law was invalidated by the European Court of Justice on procedural grounds in 2019). Between 2013–2014, the French, Italian, and Belgian government also noted that they would adopt a similar law that would require Google to pay royalty for reuse of publishers’ content if the platform did not make agreements with press publishers within a stipulated time period.
Similarly, in 2014, Spain passed a law obliging online news aggregators to pay a central licensing fee to Spanish news organizations for republishing their stories. This led to Google’s decision to not publish Google News in Spain any longer. However, Article 15 of the EU Copyright Directive now encourages news aggregators to liaise with either individual publishers or groups of them to agree on revenue sharing terms that are suitable to both parties. Hence, in November 2021, once Spain adopted its new framework in line with the EU Copyright Directive, Google announced that Google News would resume its services in the country.
Member countries were expected to adopt the Directive by June 2021 and in October 2019, France became the first country to adopt the law. Resultantly, France also saw Google unilaterally attempting to avoid being subjected to the law by not displaying snippets of news content alongside Google News links in France. However, two French Press Unions petitioned the French Competition Authority, which found in April 2020 that Google was abusing its dominant position and enjoined Google to negotiate in good faith with individual publishers. Following this, in July 2021, the French Competition Authority fined Google $592 million for non-compliance with the earlier injunction, a penalty that Google has appealed for being disproportionate.
Extending neighboring rights to publishers definitely will create opportunities for certain members of the press to generate more revenue, something that many news organizations struggle with. In addition, the mandate within the law that requires the original authors of the work to receive a share of the revenue that the press publishers will receive for republication is also a positive change for the original authors.
However, although the ability of online intermediaries to negotiate with either individual or groups of publishers has already led to bigger press publishers receiving higher revenues, smaller press publishers continue to allow republication of news for free to retain increased reach, despite being frustrated at the state of affairs. The new status quo may therefore protect and entrench the interests of established players in the field and act as a barrier for new and aspiring entrants, leading to further concentration of market power, decreased representation and diversity through smaller boutique publishers — which conflicts with the values of media pluralism, a fundamental concept of free press. Article 15 may therefore paradoxically weaken the institution of the press overall precisely as it economically strengthens certain of its members.
Article 15 purports to more fairly allocate the substantial revenue accruing online platforms through their republication of original news. However, a two-year study on ‘Potential Legal responses to Threats to the Production of News in a Digital Environment’ concluded that the EU publishers’ right was a “solution” unlikely to address the problem of online platforms allegedly free-riding (which is in itself a contentious claim) on the effort of commercial new publishers, due to the inherent risk that it will once again skew the market in favor of the big players. In fact, several press alliances across Europe who would theoretically benefit from the law had also rejected it at the time of its proposal.
As it currently stands, the Directive has been adopted not only by several European Countries, but similar versions of the law have also been implemented in non-European countries, most recent of them being Australia’s News Media Bargaining Code of 2021. The United States of America’s Copyright Office has also launched a study on the legal ramifications of something similar in order to deliberate the best way forward.
Despite substantial drawbacks that weigh against exclusive neighboring rights for press publishers as an effective solution, Article 15 of the Copyright Directive is certainly an important milestone, albeit a ‘work in progress’, in the long running tension between the media industry and big tech. Meanwhile, it remains to be seen whether the law will be a quick fix that addresses some superficial damage to the press publishers without addressing the underlying concerns, or if it will have actual long-lasting effects that are capable of creating greater symbiosis between these two important sectors.