Google has been imposed various provisional obligations by the French competition authority Autorité de la Concurrence in connection with the enforcement of the so-called ancillary copyright for press publishers. The company must therefore enter into a negotiation process with the French publishing industry regarding remuneration. Furthermore, Google is not allowed to hide their content. What is the background? Which law is being enforced here and why does antitrust law have to come into play once again? Detailed commentary in German can be found on telemedicus.info.
Summary of the decision
Several publishers had complained to the French competition authority about Google’s conduct in relation to Art. L.218 Code de la propriété intellectuelle (CPI). The authority subsequently took up the matter and initiated abuse proceedings. It came to the preliminary conclusion that the company was likely to abuse its market power through its previous practice. In its decision of 20.4.2020, it therefore issued interim measures. Here is a summary of the injunctions:
- Obligation to negotiate in good faith on remuneration in accordance with the terms of Art. L218-4 CPI with retroactive effect to the period since 24.10.2019 within three months of request (also possible through collecting societies)
- Transmission of the necessary information specified in Art. L218-4 within three months of request (also possible through collecting societies)
- Must carry provisions:
- Retention of the presentation introduced since the introduction of the French ancillary copyright and no delisting
- No impairment of the indexing, classification or presentation of the protected contents by negotiations or information supply
- No impairment of other economic relations between Google and publishers through negotiations or the supply of information
- First report on implementation of commitments four weeks after the start of negotiations, and every month thereafter
These decisions shall apply provisionally and without prejudice to further investigations by the Authority. This means that the outcome of the main proceedings is still open for the time being. However, the reasons for the adoption of such provisional measures must be weighty, so that this decision clearly indicates the authority’s assessment under competition law.
What is press ancillary copyright law about?
The ancillary copyright law for press publishers is a new instrument in copyright law. However, it is not possible to speak of one ancillary copyright in this context. Because there are different variants. The political ideas behind it – not its actual legal object – can be summarised roughly like this: Google should pay the publishers. The specific instrument is actually irrelevant, but at the time the path chosen was that of a ancillary copyright. Ancillary copyrights in general are so-called neighbouring rights to copyright. They serve to protect investments.
A first implementation of this kind of acillary copyright for press publishers in Germany a few years ago can easily be described as futile in the end. Initially, the actual goals were not achieved, namely Google’s direct payment obligation towards the publishing industry. Instead, there was only a new right of prohibition. Several attempts to enforce this ancillary copyright law failed afterwards. Finally, the German law was also overturned by the ECJ because the German legislator had not complied with his notification obligation. Simon Assion and I had pointed out this risk early on.
The next step was a European manifestation in the Copyright Directive. The Art. 15 included there can confidently compete with Art. 17 (“upload filter”), which caused considerable controversy last year. Directives do not regularly apply directly to all, but must first be implemented by the member states. However, the text of Art. 15 again indicates that it is a right of prohibition.
How did it start in France?
Very early last year, France introduced its own regulations on an ancillary copyright in its copyright law Code de la propriété intellectuelle (CPI). The full text of the entire chapter in the law can be found here. According to Art. L218-2 CPI, any reproduction or public communication in digital form by an online public communication service of all or part of the press products requires the permission of the press publisher or press agency. This provision also initially corresponds to a pure right of prohibition. However, there are further provisions in Art. L218-4 concerning the amount of a remuneration. This is to be determined either on the basis of the revenue from each type of direct or indirect use or, failing that, on a flat-rate basis. The latter is not even rare in itself; rather, collective remuneration tariffs are quite common in collective copyright law. However, this does not yet result in a positive listing obligation at a positive fee as desired by the publishers. The latter should continue to be based on the financial, material and personnel investments made by publishers and press agencies, the contribution of press publications to political and general information and the importance of the use of press publications by public online communication services. The French ancillary copyrith therefore also does not make any statement on the need to list the content regulated by it. It only regulates the consequences if the content is listed. In this context, however, it is interesting to note an included obligation of public online communication services to provide information on the use of press publications by their users as well as all other information necessary for a transparent assessment of the remuneration and its distribution. However, this can only be understood again as being in connection with the negotiation of a remuneration, if the content is to be listed at all.
As a result, Google reacted in a similar way to other companies: the publishers were asked to give their permission to use the content in a very abbreviated form – without monetary compensation. This was done in connection with an overall differentiated design of the entire process, as snippets can be presented. The publishers are thus basically given the opportunity to determine the scope and presentation of the snippets on Google to a large extent themselves. Only in cases in which infringements of the ancillary copyright and a subsequent obligation to pay remuneration would be possible does Google provide for the granting of a licence at a price of X=0. The company has already been successful in Germany for these cases. The German Federal Cartel Office (Bundeskartellamt – BKartA) had already decided in 2015 that the listing was basically objectively justified by the fact that Google would retain its otherwise permissible business model and protect itself against possible claims for damages based on the German ancillary copyright.
From this, two main statements can be made: Firstly, even a company with market power has a legitimate interest in not breaking the law. Secondly, the business model of the search engine as such cannot be objected to in principle. We will recall this second sentence when the French competition authority accuses Google of trying to impose a “general principle” of non-remuneration.
However, the main conflict arises from the political interests. This is not only aimed at a ban on the use of snippets, i.e. the ability of publishers to ban them, but rather the need for Google to license them. However, this does not result from the existing German or French copyright law, nor does it result from the Copyright Directive. Copyright law is therefore of no help. For this reason, it is worth taking a look at the antitrust law, which in principle provides for the possibility of a compulsory deal – but again only if the refusal to deal itself was abusive. The BKartA’s investigation also went in this direction. In addition, a company with market power can be controlled with regard to the amount of its fees. However, this would not be limited to the fees, prices or similar exchange conditions in connection with an ancillary copyright.
How does the French authority conclude this?
Consequently, the authority’s decision is based on the ban on abuse of market power under cartel law. This is similar to the German regulations and is also otherwise similar to the European provision of Art. 102 TFEU. According to this provision, a company must have abused its dominant market position. The first step is to examine whether a dominant position exists on a relevant market. This means first of all an answer to the question of the relevant product market. This is always a major issue with digital platforms. If digital platforms provide their services to several very different sides of the market, each of which is characterised by a completely different interest, this also speaks for different relevant product markets. The Authority makes two brief considerations here. First, it focuses on the user-side market for “general search services” and assumes a dominant position there due to the high number of users. Secondly, from recitals 173 et seq. of its decision, it refers to the wording of the French provision according to which the prohibition of abuse of market power can also be imposed in the case of “economic dependence”. This comes close to the so-called “relative market power” in the German provision of § 20 Abs. 1 S. 1 GWB. The decisive factor for economic dependence is whether companies have reasonable alternatives. Accordingly, information on market shares is not required if the dependency can be concluded from other circumstances.
The Authority currently considers that this position is being abused for three reasons: Firstly, unfair trade practices, secondly unjustified discrimination and finally “circumvention of the spirit of the ancillary copyright law” (para. 243). The first case aims at the abuse of conditions. Similar to the BKartA in the Facebook proceedings, the Autorité seems to argue here with a kind of accessoriness. In this case this approach is even more critical, as it shows its vulnerability to the enforcement of interests which are not covered by the protective object of antitrust law. On the other hand, however, the authority also takes up considerations of the obligation to do a deal. For it comes to the conclusion that for the time being, at any rate, Google must not list the publishers. However, this would only be possible in principle if, in a specific case, the removal of a publisher’s list is an abuse of market power.
In recital 194, the Autorité considers that the French ancillary copyright should make it possible to redefine the division of values in the context of negotiations between the platforms and the publishers and news agencies. The refusal to negotiate already constituted an abuse. But even otherwise, the Autorité seems to assume that in any case only positive remuneration – which means a price x > 0 – could be the result of a negotiation. It also refers in part to the Copyright Directive. However, although the interest in an economic remuneration of the publishers is mentioned there again several times, it is expressly not mentioned that there is any enforceable right of access to the platform.
With this procedure, the authority is demonstrating an error of reasoning which has recently occurred frequently in similar case constellations with digital platforms. Even if charges are subject to abuse control under cartel law, all circumstances of the individual case would have to be sufficiently taken into account. The provision of Art. L218-4 is aimed at the circumstances that justify investment protection for publishers. However, these would not be conclusive if it is a question of the anti-trust law consideration of their appropriateness. For what is inappropriate results from a blancing of interests. And although it can and should still be openly discussed whether such decisions can and should also be supported by non-antitrust law provisions – such as, for example, data protection law – the respective return would always have to be taken into account in such an approach. In this case, this means that the specifications for the level of remuneration in the French ancillary copyright do not have a blocking or even structuring effect on the legal application of the prohibition of abuse. Rather, a decision on appropriateness without legal error must also take into account the other circumstances that are relevant to the dealing constellation. However, other circumstances can also be services that are provided in return. Google, for example, could also potentially price its infrastructure and related services. In this case, for example, a monetary price could be charged for inclusion in search engine results. This would be netted out against the remuneration demanded from the publishers. The “spirit” of the French ancillary copyright is of little help here, as it only refers to the prohibition right and its remuneration rules themselves, but not to the entire market exchange process. What constitutes this process, however, is usually difficult to specify. What was needed is a positive regulatory specification.
These objections have been dismissed by the French Autorité simply by stating that Google is trying to establish a principle of non-remuneration. Publishers, without exception, would therefore be set at a zero price simply to circumvent the French ancillary copyright. This is either very short-sighted or a big succes in lobbying of the publishing industry. Because this principle has been around for a long time, even before Google appeared. Publishers have always benefited from the fact that their content was widely found in search engines. They even wanted to be listed at all. The prices for these services and thus also the remuneration develop in competition. As long as an ancillary copyright does not concretely shape the market result here, every company is free to determine the conditions of its services and their prices. So even if the French ancillary copyright even aims to monetarise the protected content, this does not have to result in a positive monetary value. Figuratively written: A zero price does not arise merely because a company allows itself to be granted a zero discount on its services; it can also arise when services are provided at opposite ends of the spectrum, the price of which is always set at the same level. The one “pays” for the fact that he is allowed to distribute his content via the platform; the other “pays” for the fact that he exploits this content economically. The BKartA has already argued in a correspondingly comprehensible manner that even a market-dominant company cannot be prohibited from basically wanting to maintain its previous price structure.
Moreover, this is the real critical point of the Autorité’s decision: it presumes to make decisions on the outcome of a basically competitive negotiation process, while limiting the design sovereignty of the platform. For the latter, like the fundamental private autonomy, is one of the interests protected and to be respected. What does this mean? Every company has the fundamental freedom to decide for itself with whom it enters into business relations and with whom it does not. An obligation to enter into a business transaction under cartel law is only possible under narrow exceptions. However, every company also has the freedom to determine the individual conditions of its product design or service provision. The company has a prerogative to make an assessment in this respect. Before a compulsory deal could even be considered here, another question must first be answered: Does a company abuse its market power through a design decision? In the case of platforms, this is such a complex balancing act that it could not be carried out by a legal implementation of the ancillary copyright alone. The Autorité makes it too easy for itself here.
In order to secure these results, the authority imposes a must-carry obligation. Google must therefore in principle present the publishers as if there was already an agreement on the ancillary copyright. This requires that the publishers themselves or an organisation representing them file a request for a hearing with Google. This is a very unusual and highly regulatory procedure, which is not provided for in antitrust law. This equally provisional measure is intended to support the ordered negotiation process between Google and the publishers. It cannot therefore be interpreted as a general instrument of access regulation. Because even and despite the orders of the authority, the outcome of the negotiations may lead to a similar result as before. Even a zero price can be negotiated.