LONDON — Battered by the transition to digital media, Europe’s newspaper publishers are hoping they’ll soon get a lifeline from Brussels.
A group of media companies, with Germany’s Axel Springer at the fore, are pushing for reforms to Europe’s copyright regime that would entitle them to receive compensation when search engines and news aggregators reproduce snippets of their articles.
The main focus of their complaints: Google.
After months of intensive lobbying, the publishers are confident that the European Commission will in the next few months propose new rules to strengthen their bargaining power against the U.S. Internet giants, lobbyists for several of Europe’s leading newspaper owners said.
In recent discussions, aides to digital commissioner Günther Oettinger have indicated that the Commission will give the publishers more favorable terms as part of an overhaul of European copyright policy, the lobbyists said.
If the publishers get their way, Google will have to pay them whenever snippets of their articles appear on its aggregation sites — opening up a new source of revenue for the embattled media companies. Or Google could scale back its news aggregators in Europe: It has already shut Google News in Spain after stricter copyright rules were imposed there.
“I think [the Commission is] going to do something,” an executive at a British newspaper group told POLITICO. “That’s the mood music that seems to be coming out.”
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The publishers shouldn’t be too hopeful, other sources said.
Some Commission officials aren’t convinced that the legacy media needs stronger copyright protection, or that it could work. Similar rules haven’t succeeded in Germany and Spain.
On the other side of a fierce debate are vocal opponents, including free speech and open Internet campaigners, who argue that the publishers are trying to uphold an outdated business model out of naked self-interest, at the risk of limiting the free flow of information and stifling competition.
And they will have to overcome Google’s own increasing lobbying in Europe.
The Commission said it is keeping an open mind. Nathalie Vandystadt, a spokeswoman for the Digital Single Market, said: “Different solutions related to news aggregators, both legislative and market-led, are being tested at national level. The Commission is closely looking into them.”
She added: “At this stage we have not yet a final position as to whether legislative intervention at EU level is needed. Commissioner Oettinger is open to different options and is looking into the best solutions to facilitate access to content while ensuring a fair remuneration for authors.”
The showdown is part of Axel Springer’s attempt to uphold the value of digital journalism as it moves away from its traditional newspaper business. The owner of Bild and Die Welt last month clinched a $343 million acquisition of Business Insider. (It is also a co-owner of POLITICO’s European operation.) It is also fighting providers of ad-blocking software in the German courts, and launching its own Internet news aggregation service, which it says will pay copyright fees.
The fight between newspapers publishers and Google is part of a wider debate in Europe about control of the digital economy.
Policymakers are torn between a handful of increasingly powerful, well-funded, expansionist American technology giants — including Google, Apple, Facebook and Uber — and long-established European media companies anxious that their position is being eroded. Newspapers that once had healthy profits and vast political and social influence have seen their advertising and circulation revenues plummet. Most have sought to compensate by moving online, but there they face intense competition and challenging economics.
The publishers still bear the risk and cost of producing original journalism, but much of the value online, they complain, is diluted by the likes of Google. They want a fairer legal framework where, like performing artists, film producers and broadcasters, they are compensated when their work is reproduced.
The catch? While they think it’s an unfair trade, they rely on Google to direct a significant amount of web traffic to their sites. And few have the muscle to take on the Silicon Valley giant.
Oettinger’s sympathetic ear
Axel Springer has been most outspoken about Google’s growing power. “We are afraid of Google,” Mathias Dopfner, Axel Springer’s chief executive, admitted in a wide-ranging complaint published in Frankfurter Allegmeine in April last year.
Also vocal about Google’s chokehold over publishers is Robert Thomson, chief executive of News Corp, which owns The Wall Street Journal, The Times and The Sun. In a letter to Manuel Almunia, Europe’s competition commissioner, Thomson in September last year wrote that Google’s “habitual appropriation of content and audiences” was a major contributor to the newspaper industry’s decline.
“Virtually every newspaper in Europe is in the midst of upheaval, and some will surely not exist five years from now, in part because of their own flawed strategy and lack of leadership, but also because of the value of serious content has been commodified by Google,” Thomson said. “Readers have been socialized into accepting this egregious aggregation as the norm.”
As the publishers see it, the Commission’s review of European copyright rules gives them a narrow window to tilt the balance of power back in their favor, the lobbyists said.
In Oettinger, they seem to have a sympathetic ear. In October last year, before taking the digital commissioner role, he told the German newspaper Handelsblatt: “If Google takes intellectual property from the EU and makes use of it, the EU can protect this property and demand that Google pay for it.”
Industry representatives have been lobbying hard in Brussels in recent months.
Some in the industry are skeptical that their efforts will succeed. Attempts in some member states to levy a so-called “Google tax” have backfired.
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After Germany passed an “ancillary” copyright law in 2013, Google gave publishers a choice: Allow it to continue using their articles without paying, or it would show only reduced links in its news aggregator and search engine. Fearing they’d lose traffic, and with it advertising revenue, the publishers backed down.
In a blow to the publishers, German competition authorities have ruled that Google is entitled to display only truncated links if it doesn’t want to pay licenses to show longer snippets. The patent and trademark office rejected a demand for a 6 percent slice of Google’s German revenues. Litigation there is ongoing, and likely to last years.
In Spain, when lawmakers passed strict rules making it compulsory for aggregators to pay when they display snippets of news stories, Google withdrew its Google News service. A recent report by Nera Economic Consulting found that the law has reduced the amount of information available to readers and reduced traffic to newspaper sites by 14 percent.
Critics of paying newspapers say the publishers are ignoring the new realities of online media. Till Kreuzer, a German lawyer, said: “There are a lot of people who, especially in Germany and other traditional European countries, want to preserve the past… I think this fight is long-lost, but still people want to try to cement what [the media landscape was like] in the 1990s and before.”
“You can’t get the ghost back into the bottle,” he added.
For the publishers, the stakes are enormously high. With print revenues falling, online advertising under pressure, few readers willing to pay for news online, and a handful of powerful platforms — Google, Facebook, Apple — increasingly controlling the distribution of their work, they are struggling to hold on to their turf.
“Axel Springer is using every tool it can think of to minimize the decline in value of content media,” Douglas McCabe, chief executive of Enders Analysis, a media research firm, said.
Google did not comment on the publisher’s lobbying or the Commission’s expected reforms, and instead pointed to public comments by its executives.
In blog posts, Google bosses have argued that they drive billions of page views to publishers’ websites every month and insist they want to be partners, rather than competitors. David Drummond, senior vice president of corporate development, told an industry conference in July: “We recognize that technology companies and news organizations are part of the same information ecosystem. We are committed to playing our part.”
Eager to change the narrative in Europe, the technology giant has tried to build close ties to publishers, principally by launching a €150 million fund to develop digital news products. Dozens of publishers have signed up to Google’s Digital News Initiative, including the owners of The Guardian, La Stampa, the Financial Times and Spiegel Online.
This article was first published on POLITICO Pro.