At the beginning of April 2019, the European Parliament approved the EU’s unified regulation on copyright and related rights. Since then, Member States have been amending their anti-trust legislation in order to guarantee publishers’ rights in the cyberspace. Arguably, France has become the standard-bearer of new copyright laws’ tighter enforcement in the EU by taking on Google. Now, Paris’s anti-trust judges have taken a further step by fining Google and threatening to do it again.
Background: How did Google get there?
Usually, European are less than regardful towards US tech companies, especially Amazon, Facebook, and Google — and even more so lately. For instance, the UK announced its intention to look into Google for not deleting untruthful product reviews and scam financial ads. Meanwhile, the European Union is targeting Google’s and Amazon’s abuses of their dominant positions in advertising and retail, respectively. Most recently, France has fined Google for €500mln due to its refuse to compromise with local news outlets over digital copyright.
Online copyright in the EU
This story actually begun in Brussels more than two years ago, in April 2019. Then, the European Parliament and of the Council were discussing new rules “on copyright and related rights” in the EU. Even though this may not ring any bell, many who live in the EU will remember that period. In fact, televisions, newspapers and social media regurgitated a massive societal debate around Directive № 790 and its innovations.
In short, the point of contention was extending “the rights of reproduction and of communication to the public” to the internet. This means that newspapers and agencies deserve “a fair compensation under national law” each time someone links to their content. Obviously, there was also much more in the bill — including the easing of copyright rules for cultural heritage institutions. However, many online started worry this could have been the end of the free internet. So much so that Wikipedia shut down its European versions on the day the European Parliament voted on the directive.
Eventually, the bill passed; but it was not applicable yet. Essentially due to the EU’s multi-layer structure of government and policymaking, its organs can only rule directly on some issues. And in these cases, they create directly applicable, European laws that go under the name of regulations. Whereas more often, the EU cannot do more than hammer out a legal framework and enshrine it in a directive. True, Member States need to ‘transpose’ (i.e., introduce) all directives into their legal systems in the shortest time possible. Nevertheless, they can do so in their own way, using the wording they please and – in effect – without rushing. For these reasons, directives often generate unequal outcomes and have differentiated impacts across countries that transpose them differently.
France’s hard-line approach and Google’s steadfast reaction
The EU gave Member Sates no more than two years to pass legislation transposing Directive № 790. According to many standards, France’s transposition of the digital copyright directive was amongst the swiftest on record. In fact, Law № 775 on neighbouring rights for press agencies and publishers entered into force in October 2019. Technically, the text added a new chapter to the French Intellectual Property Code, giving press agencies and publishers new rights. First, the law created online news services’ right to curtail the partial or total reproduction of their digital publications. Second, it established that “online service providers” need to pay news services a compensation “for the exploitation of such rights.”
In practice, taking a rather hard stance, France forced “Google to pay what has been called a ‘link tax’.” As a rejoinder, Google declared it “will not show preview content in France for a European news publication.” Consequently, Google News and Search started showing only “a headline, [… linking] to the relevant news site,” but no preview. However, according to expert analysts, Google was not intentioned to start a standoff. In fact, publishers could decide to make their content “available to be found in Google Search or Google News.” But in order to do so, they would need to pre-emptively renounce any compensation for Google’s use of their articles. Hence, Google aimed at an agreement similar to those it had previously reached “with publishers in other EU Member States”. After all, the news market in countries such as Germany and Spain operated under analogues legal constraints.
A monopoly in court: French publishers react
However, this approach did not work as Google expected in France. On the contrary, it backfired majestically. Already in November 2019, a number of French news organisations, unions and business coalition filed an anti-trust suit against Google. The bases for their action are articles 420-1 and 420-2 of the Commerce Code — which instituted anti-trust enforcement in France. That is, first, the prohibition of all actions aimed at “preventing, restricting or distorting competition in a market”. And, second, the sanctioning of any abuse of “a dominant position in the internal market or a substantial part thereof.”
According to the plaintiffs, Google – like Facebook and other social networks – “refuse the implementation in good faith of the press’s neighbouring rights.” Moreover, the Alliance de la presse d’information générale, the Syndicat des éditeurs de la presse magazine and the Fédération nationale de la presse d’information spécialisée accused Google of abusing their own economic dependence basically blackmailing them to forego neighbouring-right remunerations under Law № 775. Therefore, they requested the Competition Authority to force Google to engage in negotiations on the remuneration of their content’s re-use.
Eventually, the Authority noted that it was not necessary to decide on the merits to grant temporary, interim measures. In fact, the existence of at least some reason to suspect that Google has an unfair market power is undisputable. Foremost, controlling about 90% of the French digital-news market in 2019, Google holds a dominant position vis-à-vis producers and consumers. Moreover, sturdy hurdles to entry exist in this market; thus, preventing the emergence of real competitors to Google’s apparent monopoly. Therefore, the Authorityconcluded that Google’s market position manifests the ‘extraordinary’ element that underpinned the EU’s case against Microsoft. On these grounds, the Authority mandated Google to engage in good-faith negotiations with French publishers and press agency.
Fining Google and what will follow
Ever since the Authority’s order to participate in negotiations, Google has basically done nothing. In the meantime, it had mandated Google to display snippets and previews during the negotiation period. In its Decision № 21-D-17, the Authority determined that Google engageed in “a deliberate, elaborate and systematic strategy for non-compliance”. The Authority remarked the voluntarity of this strategy multiple times, highlithing its coherence with Google’s past positions.
[T]he lack of awareness of the Decision, far from being causal or unintentional, seems to be part of a continuation of the opposition to the very principle of neighbouring rights, expressed by Google during the discussion of the Directive […].
For these reasons, the Authority fined Google for €500mln and threatened even higher fees in case of continued non-compliance. In fact, the decision affirms that given the applicable legal ceiling, penalties on Google’s revenues can reach €16bln in France.
Looking forward, one should mention that appeal against the decision is possible. Thus, Google may try its luck and attempt to get the sanction cancelled. However, it looks highly unlikely that the company may decide so. Especially given that in the last weeks before the Authority’s decision, it attempted a last-minute negotiation. According to some experts, this action alone is an implicit admission of Google’s past inaction — which the fine punishes.
Therefore, it finally seems that after Australia, a European country may finally rein in big tech successfully. Sure, Google could resist the Authority’s ultimatum and refuse to cooperate, but this is unlikely. More probably, this will be the start of Big Tech’s reckoning with traditional business its activities menace. Moreover, the French media landscape is much less fragmented than the Australian one, where agreeing with NewsCorp alone was enough. Thus, this time the negotiations will be much tougher, leading Google to start paying news services a truly fair compensation.