The French Competition Bureau (l’Autorité de la Concurrence) struck a strong blow in the global effort to hold Google to account under national laws when it issued an order on April 9 requiring Google to negotiate with French press publishers and news providers regarding licensing fees for news content appearing in Google search listings in France. The Authority gave Google three months to negotiate “in good faith” (de bonne foi) and come up with an agreement that results in payment to publishers. This marks an escalation in the wrestling match between Google and European regulators over a new requirement in the EU Copyright Directive requiring search engines and news aggregators to compensate news content providers for excerpting snippets of their content when providing search results. Under Article 15 of the Directive a new “neighbouring right” has been given to press publishers expanding their ability to control the reproduction and communication of their work to the public.
The revision to the Directive was a long process finally culminating in the adoption of amendments, including Article 15, in April of last year. During this process Google and others fought tooth and nail against the new provisions, ultimately without success. The final version exempted scientific and academic publications from coverage under the Directive, as well as “insubstantial” parts of a work. As I noted in my 2019 year end blog, France was the first EU member state to implement the Directive, in September of last year, and found itself running headlong into Google’s obduracy. Google refused to comply with the intent of the French legislation, announcing that rather than enter into negotiations with publishers to licence content, it would amend its procedures to drop all text references and simply display the headline (topic) and link. Technically this is in compliance with the letter of the law, but certainly not with the spirit. Google was playing hardball, as it did earlier in both Spain and Germany, which had introduced similar legislation a few years ago. In Spain, Google News simply shut down. In Germany Google dropped all snippets from publishers who refused to allow unlicensed use of their content, resulting in a huge loss of traffic to major news websites. The result was that most German news content providers backed down, allowing Google free use of content excerpts.
However, when it comes to playing hardball, don’t mess with the French. French politicians reacted with anger when Google announced that it would not sign licence agreements with publishers. President Macron threatened to refer Google’s case to the competition authorities for assessment and the Cultural Minister Franck Riester called Google’s response “unacceptable”. As was clearly demonstrated in the case of Germany, Google wields such extensive market power that delisting or downgrading of search results on Google can be commercially fatal. This is what the German publisher Axel Springer learned when it took on Google in Germany through the law that it had championed on content snippets. After Google took action to remove Springer content, traffic to the publisher’s websites dropped by 80%. So Google clearly has leverage, but so do nation-states and France, for one, is not loath to use the tools at its disposal, among them competition law. The Authority, in a preliminary ruling, issued an injunction requiring the good faith negotiations, declaring that Google’s evasion of the intent of the law was likely an abuse of dominant position given the inability of publishers to find a viable alternative to being listed on Google search.
The outcome in France will have echoes elsewhere, clearly in the EU where the member states will be progressively implementing Article 15 of the Copyright Directive, but also outside Europe. Already in Canada there have been calls for government action to deal with Google’s dominant position and to ensure that some revenues from online search flow to providers of news content.
Google has long fought against submitting to national laws when it comes to its online operations, arguing that because it operates in multiple jurisdictions it cannot be subject to different, possibly conflicting, rules. Moreover, although it collects revenues and provides services in many countries, its physical presence varies and it has argued in the past that it is subject only to US law, based on the fact that it is legally incorporated in California. That is the position it has taken in Canada, Australia, and New Zealand for example, but with different degrees of success. In New Zealand, Google got into a confrontation with the Minister of Justice after it refused to honour a publication ban on a criminal case imposed by a local court, arguing that it was not subject to the laws of New Zealand.
It tried a similar approach in Canada in what is by now quite a well-known case, Google v Equustek. I have written on this case several times, most recently about a year ago. You can read the details in earlier blogs, but the essence of the case is that Google decided it would challenge an injunction issued by a British Columbia (BC) court requiring it to delist from its global search results information about a Canadian company that had been found guilty of infringing another company’s intellectual property, passing off the second company’s products as its own. The transgressor had set itself up overseas and continued to do business online. The remedy was global delisting, which Google resisted, taking the case all the way to the Supreme Court of Canada, and losing. Google then went to court in California seeking to have the Canadian injunction ruled unenforceable in the US, which it succeeded in doing. It then triumphantly returned to the BC court seeking to have the original delisting order varied, only to have its request denied. In short, in the end Google complied with Canadian law in Canada.
Australia has also exerted national law over Google and its global search results. A new Australian law can require search engines to de-index offshore websites found by the courts to be engaging in widespread copyright infringement. Google vigorously opposed the law, but presumably seeing the writing on the wall, agreed to “voluntarily” delist several hundred pirate websites, something that it has been unwilling to do elsewhere.
Google has been able to benefit enormously from an era, now thankfully ending, of “permissionless innovation” (also known as take first, and apologize later, if forced to) as we are seeing in the Google v Oracle case in the US. It also has deep pockets and an army of lawyers, and like many big companies engages in heavy lobbying. It has also tried to stake out the high moral ground by wrapping itself in the cloak of “internet freedom” and in so doing has managed to co-opt a number of civil society groups who have drunk Google’s Kool-Aid. It prefers to subject itself to national laws as little as possible, and where it can get away with this approach, (in effect arguing that because it operates in multiple jurisdictions it is subject to the law in none of them), it will. However, at the end of the day even Google is unable to challenge determined national legislators and regulators (although it will not hesitate to seek US government support for its fights where it can). Google has said that it will comply with the decision issued by l’Autorité, and it will engage in discussions with French publishers regarding a licensing regime for the news content that it uses. We shall have to await the outcome.
I doubt if Google will roll over and play dead. It may still have a few tricks up its sleeve but on this issue it may have met its Waterloo. (Perhaps an inapt metaphor when talking about France?). The French are determined to win this one, and if Google complies in this case, the rest of the EU, especially Germany, will quickly follow. Google has been caught before in anti-competitive behaviour and fined by the EU competition authorities, but this case is not something that can be settled by paying a hefty fine. It is fundamental to maintaining the balance between online platforms and content providers. The new licensing regime for online news content excerpts that will likely emerge in France could become a precedent much welcomed by financially-strapped news media in other parts of Europe and potentially beyond. It’s never over until it’s over but this time it looks as if Google may be held to account.
© Hugh Stephens, 2020. All Rights Reserved.