In the latest regulatory woe for Big Tech in Europe, Google is trying to settle a German antitrust investigation into its news licensing product by offering not to expand the display of News showcase "story panels" into general search results.
The company has proposed several measures in response to the antitrust concerns of the German Federal Cartel Office, which also include taking steps to put clear blue water between News Showcase contracts and ongoing negotiations with publishers related to copyright licensing obligations around so called neighbours rights for news.
In May of 2021, German law will be updated to reflect the new EU Copyright reform, which requires news publishers to pay copyright fees for displaying snippets of their content.
The tech giant switched to an opt-in model for the market and was able to prevent the German lawmakers from trying to force them to pay licensing fees for snippets of their content in the news section.
It took a pan-EU directive and local antitrust intervention to force a change in how it operates to circumvent payments.
The tech giant's compliance with EU copyright law is a work in progress. In France, for instance, its activity on this front has already attracted a fine of over half a billion dollars, and its approach to news licensing remains under close regulatory watch.
As of today, Germany is scrutinizing how it operates News showcase, as well as how it negotiates with local news publishers.
The FCO is concerned that if News showcase is integrated into general search results, it will result in the company self-preferentialing its own services orimpeding services offered by competing third parties.
It has concerns about whether the News Showcase contractual terms are unfair to the participating publishers and whether it is difficult for them to enforce their general ancillary copyright when participating in the showcase.
The regulator is looking at whether non-discriminatory access is ensured for publishers.
The FCO confirmed last week that it has the power to apply special measures to the business of internet giant, Google, under powers that were passed by local lawmakers at the start of last year. That shrinks the time for regulatory action and makes it harder for Google to wiggle around FCO orders.
Similar Big Tech-focused copyright reforms are underway in the UK. The Digital Markets Act, also known as the ex ante rules for gatekeeping giants, are on their way to being adopted at an EU level. The operational leash for Big Tech in Europe is about to be shortened.
The antitrust probe of the products of the internet giant is getting more serious.
As well as offering not to expand the showcasing of licensed content to general search results in Germany, the FCO said today that Google has already changed some of the practices under examination and declared its willingness to address any remaining ambiguities and concerns by modifying the showcase contracts and providing clarifying statements.
The contracts are to be separated from the negotiations between the publishers and the internet giant.
In October 2020, the tech giant announced the global News showcase product, which would pay participating publishers $1 billion collectively to licence their news content to appear in so-called "story panels" across its products.
The screengrab is from TechCrunch.
Australia came up with its own legislative template targeting Facebook and Google to pay for news reuse in August 2020, as a result of rising legal requirements in a number of jurisdictions over remuneration for displaying news content.
It looked like a naked attempt by Google to limit a looming revenue hit while simultaneously exploiting its market power to generate as much upside for its ad-monetizing Internet content business as possible.
Publishers were offered the chance to be pressured to agree to the terms of the deals and to be paid a licensing fee if they did not.
Content licensed under News Showcase would appear in story panels on the News app on mobile devices. The News Aggregator product was added to the desktop and the personalized content feed was added to the mobile devices.
News showcase was added to search results in order to further expand where licensed content appears.
In Europe, where the search engine remains dominant, the plan quickly landed it in regulatory hot water.
The News showcase product gives publishers the chance to raise their visibility by showing their content to users across a number of channels, including giving mobile users the ability to follow publishers so that more of their content gets threaded into personalized feeds. Publishers have a strong incentive to cut deals with Google.
Publishers may feel pressured to cut deals with Google in order to not miss out on the chance of extra traffic being sent their way, and this could put commercial pressure on them to agree to broad licensing terms that might waive or reduce copyright.
European competition regulators have not taken into account the fact that a proprietary news display product and commercial terms are being used to smudge copyright compliance by co-mingling News showcase negotiations and contacts with legally required licensing fees, and have instead listened to publisher complaints that Google is not playing. The FCO probe was opened after a complaint was filed by Corint Media.
The French competition watchdog issued a hefty sanction last summer after it was found that the search engine giant wanted to impose its news licensing product on publishers in order to get the legal right to be included.
The investigation is still going on, but it has already resulted in a $592M fine for breaching an earlier order.
With the FCO flush with new powers to tackle abusive digital giants, the threat is clearly there. The FCO only began probing the T&Cs last summer, and that is why the offer of tweaks to how it operates the News showcase product in Germany is alacritous.
The company has faced a number of antirust enforcements in recent years, both at an EU and national level. EU Member States have competition watchdogs who have been quick to respond to news publishers concerns.
The FCO has a relatively quick scrutiny of the product, and Germany was one of the first markets to get News showcase. Although France was quicker to pass the EU copyright reform into national law, its competition watchdog has been focused on the details of how it has negotiated fees with news publishers over reuse of their content.
In December, the French regulators announced that they had made a series of commitments around negotiating in good faith and that they should apply for five years.
The watchdog in France will make a decision on whether to accept or require additional measures after consulting on the proposal until the end of the month.
The German FCO is consulting on the operational offers of the internet.
In a statement, president Andreas Mundt said: "Google has proposed measures to respond to our competition concerns." The general search results will not include the Showcase content. The conditions for participating in the news showcase are not intended to prevent publishers from using their copyrighted works. Access to the news showcase is based on criteria. We rely on the assessment of the market players affected to make sure the measures proposed by Google are effective. In view of the wide variety of interests the publishers may have, we are conducting broader consultations in the sector.
He said that the regulators are closely watching the negotiations between the publishers and the search engine.
The UK's competition watchdog is watching the plan to deprecate support for third party tracking cookies and move to a suite of new ad targeting technologies, which is under close supervision.
In the summer of 2015, France's competition watchdog hit Google with a $268M fine for self preferencing its adtech, which led to another behavioral offer from the tech giant.
In an effort to end costly antitrust litigation, Google offers behavioral pledges on news payments.
The UK's CMA and Google agree on deeper oversight of Privacy Sandbox.
All Rights Reserved © 2024
