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14 June 2022CopyrightMark Nichols and Autumn Gibson

Power to the press publishers?

Article 15 of the Directive on Copyright in the Single Digital Market (Copyright Directive) was one of its most controversial aspects, seeking to redress the balance between publishers and platforms by providing press publishers with the right to receive revenue for use of their publications by certain online platforms.

Despite Google’s past reluctance to offer licences to publishers, its initial reaction to Article 15 through its introduction of a new licensing initiative suggests that it is trying to get ahead of the game and get publishers onside.

Google has, for years, used brief excerpts from articles in its search results. On May 11, 2022, Google announced it was launching the Extended News Previews (ENP) programme, enabling publishers in EU territories that have implemented the Copyright Directive to be paid for Google’s publication of longer previews of articles.

However, there are a number of questions arising out of the ENP, likely to be of concern to publishers.

In this article, we will examine what this move by Google means for publishers and whether it should be viewed as genuine acceptance of the spirit of Article 15 of the Copyright Directive in protecting the rights of publishers, or simply an attempt to kick the proverbial can down the road.

Protection of publishers’ press publications

Online content sharing service providers, otherwise known as platforms, such as tech giants Google and Meta, derive traffic and generate vast advertising revenues, by directing internet searchers to relevant content, including press publications and articles.

Many argue that this has directed significant advertising revenue away from press publishers to the platforms.

According to figures from Ofcom, at least 65% of people now use the internet for their news. But prior to digital platforms being able to aggregate content, publishers had more autonomy over use of the content they prepared and collated, which they mostly controlled themselves through their own channels, and their content was a prime location for advertising.

That has changed dramatically in recent years. In the US alone, digital and print ad revenue for newspapers fell from $49.4 billion in 2005 to $14.3 billion in 2018.

Article 15 of the Copyright Directive attempts to redress the revenue balance between platforms and publishers. It makes clear that the use of excerpts from press publications by platforms without a licence may constitute copyright infringement.

It allows for specific exclusions, particularly for hyperlinking to press publications, non-commercial use by individuals, or “very short” excerpts, but otherwise codifies the position that publishers should be paid for use of their content.

Although Google has publicly refuted the claim that it has poached revenues from publishers, the statistics are telling. In the UK, figures from the Competition and Markets Authority revealed that Google and Facebook dominated roughly 80% of digital advertising spend in 2019.

Despite the fact that readers can go directly to publishers (as they once did with hard-copy print), most traffic is driven through social or search platforms.

Google would argue, with justification, that press publishers need the platforms to aggregate their content in order to drive traffic, and that without the platforms online publications would not have grown as fast as they have.

Of course, platforms also benefit widely from using the press publications, but are less dependent on them individually and so have greater bargaining power.

A number of territories—most famously Spain—have attempted to levy a “link tax” on platforms in the past. Google reacted to this by pulling its Google News service from Spain, presumably on the basis that the size of the Spanish market and the revenue generated from it by Google did not justify the cost of compliance.

Now that the entire EU is (in theory) implementing similar measures, Google and similar platforms are understandably taking more notice.

Platforms under pressure?

Under the ENP initiative, publishers in EU member states which have implemented the Copyright Directive may opt in to a licensing agreement with Google. Publishers signed up to the ENP receive payment in exchange for use of their materials on Google News.

However, the ENP is still in its infancy, and many details are yet to come to light. In principle, the concept of a straightforward licensing programme run by one of the major platforms is appealing for publishers and shows a willingness by Google to engage. However, publishers will want to be reassured by understanding more about what the ENP means for Google search listings, and what revenues they might generate under the initiative.

Google has said that eligible publishers which choose not to sign up to the ENP will still appear in its search results unless they take further action, such as asking Google not to index the site (whether for news or at all), which is likely to be unappealing to most publishers. It is unclear what the implications will be for publishers which do not opt in to the ENP but decide to remain indexed by Google.

Will Google retain its current practice of providing a short excerpt from all publishers, and a longer excerpt from those signed up to ENP? If so, there is an argument that Google is retaining its legacy practices in respect of non-ENP publishers and providing itself with the opportunity to publish longer excerpts via ENP.

It would not, therefore, appear to be resolving concerns with such legacy practices. Furthermore, could Google rank content from publishers which have opted in to ENP above that from those which have not? This may force publishers to sign up to the ENP to retain their web traffic; might it even raise competition law questions?

Detail about the remuneration available to publishers under the ENP is lacking. In all likelihood, Google has negotiated rates privately with key publishers, but there appears to be a lack of transparency for smaller players. The remuneration aspect will affect the publishing industry and will have a trickle-down effect on authors because, under Article 15, publishers are required to give authors an appropriate share of the revenues received for the use of their publications by platforms

There is a further lack of clarity about how the ENP may affect publishers operating successful subscription-based models. If such publishers opt in to the ENP, and Google publishes longer snippets of their publications, this may cannibalise subscriptions, leading to a decline in such publisher’s revenue. Conversely, if they do not sign up to ENP, might they risk a decline in traffic in the long-term?

Unfortunately, there is no clear path for publishers to take, save to wait to see how the ENP plays out. In the round and despite the lack of clarity, Google should be commended for taking steps to implement the Copyright Directive.

It remains to be seen, however, whether its implementation is really in the spirit of the directive, or whether it is an attempt by Google to obtain rights to more content without changing its legacy practices.

Mark Nichols is a senior associate and IP lawyer at Potter Clarkson. He can be contacted at  mark.nichols@potterclarkson.com

Autumn Gibson is a trainee IP lawyer at Potter Clarkson. She can be contacted at  autumn.gibson@potterclarkson.com.

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