Paying for Use of News Content? The US Launches Study on Free-Riding by News Aggregators

A couple of weeks ago I put up a blog posting looking at the history of copyright and news content over the past two hundred years or more. It discussed the longstanding question of who “owns” the news, and who should be compensated when news content is copied. This issue is not new but has become very topical in recent months and years because of the use of snippets of news content by digital platforms to attract and retain users on their services. In most instances the snippets (which encourage users to click on links) were not authorized or licensed. Given the parlous state of the print media, with advertising revenue streams drying up as ad dollars gravitate to digital platforms (the same platforms that are, in effect, monetizing the content produced by others), pressure has mounted from news publishers for governments to “do something” about the problem.

Various solutions have been proposed. The European solution has been to create an additional “neighbouring right” to give news content producers a supplementary, limited duration (two years from date of publication) right to license their material. France has been the most aggressive EU state in implementing the new provision, and just this past week it was announced that Facebook has reached agreement with a group of national and regional French newspapers to pay for content shared by Facebook users.  Australia played a game of chicken with Google and Facebook until both platforms blinked and suddenly found the means to reach licensing agreements with major Australian news publishers. Australia used the lever of competition law to bring the two gigantic digital platforms to heel. (For more details, see here and here).

In Canada, the newly-elected Liberal minority government proclaimed in its platform that within 100 days (of Parliament being recalled) it would introduce legislation that would “require digital platforms that generate revenue from the publication of news content to share a portion of their revenues with Canadian news outlets”. Across the Atlantic, the British government has recently (April 2021) established a Digital Markets Unit (DMU) within its Competition and Markets Authority. The DMU was tasked by the UK’s Digital Secretary to consider a possible code to govern the relationship between platforms and content providers, such as news publishers, although the impetus for the introduction of regulation in Britain is less than elsewhere, having been forestalled by pre-emptive actions taken by both Google and Facebook. The internet giants, seeing the writing on the wall, moved to head off a regulatory approach by reaching agreements with British publishers for payment for content in late 2020.

Until recently, the world’s largest media market globally, the United States, has been relatively unengaged in this process although legislation has been (re) introduced into Congress to provide US news providers with an exemption from anti-trust laws for a limited time so that they can negotiate collectively with digital platforms like Google and Facebook without running afoul of anti-competition laws. Known as the Journalism Competition and Preservation Act, it has bipartisan support, having being introduced by U.S. Senators Amy Klobuchar (D-MN) and John Kennedy (R-LA) and Representatives David Cicilline (D-RI) and Ken Buck (R-NY). That legislation has received two readings and been referred to the Senate Judicial Committee.

The process in the US has now taken a step further with the announcement on October 12 by the US Copyright Office (USCO) that it will be undertaking a “Study on Ancillary Copyright Protection for Publishers”.

The USCO, in its introduction, states that:

“At the request of Congress, the Copyright Office is undertaking a public study to evaluate the effectiveness of current copyright protections for publishers in the United States, with a focus on press publishers.”

Noting that the EU has brought in a neighbouring (or ancillary) right for news publishers, the announcement goes on to say that, “The Office will consider whether or not similar protections are warranted in the United States, as well as the potential scope, source, and appropriate beneficiaries of any such protections.”

A Federal Register notice seeks public input on a number of questions, and the Office will hold a public roundtable in early December.

The Congressional request came from Senators Thom Tillis (R-NC), Chris Coons (D-DE), John Cornyn (R-TX), Mazie Hirono (D-HI), Patrick Leahy (D-VT), and Amy Klobuchar (D-MN) who sent a letter to Register of Copyrights, Shira Perlmutter, requesting the Copyright Office study the viability of adding ancillary protections to U.S. copyright law that would require platform aggregators to pay publishers for excerpts of content they provide for others to view. The request was one of several copyright-related studies initiated by Congress over the past summer. In examining the ancillary copyright issue, the USCO states that it will consider;

“… the potential scope, source, and appropriate beneficiaries of any such protections. The Office will also consider how potential ancillary copyright protections might interact with current copyright law, looking at issues including the underlying rights of writers, photographers, and other authors; existing rights of publishers; and exceptions and limitations such as fair use.

Additionally, the Office will examine whether any hypothetical new protections might apply to publishing sectors other than news, the potential impact of such protections on users including news aggregators, and the interaction between ancillary copyright and the United States’ international treaty obligations.”

That’s a lot to take on.

The Federal Register notice provides the rationale for the study; the decline of the traditional news publishing business. Over the past decade employment in newspaper newsrooms has dropped by 40 percent and one in five newspapers in the US has closed. Meanwhile online news aggregators have grown exponentially to the point where they are now the preferred or initial source of news for a majority of digital news consumers. Noting that there already exist certain copyright protections for news publishers, such as copyright in the print edition as a whole or the website containing individual news articles, as well as individual journalistic works if written by staff writers or if rights have been assigned, the notice also notes the limitations on copyright, such as content that cannot be copyrighted (facts) as well as fair use.

There is already a form of additional protection for publishers that was frequently applied in the past in the US. This is the so-called “hot news” doctrine that emerged from the 1918 US Supreme Court case, International News Service v Associated Press (the INS case). The additional protections have some of the characteristics of ancillary copyright. To quote from the recent work, “Who Owns the New: A History of Copyright” (Will Slauter, Stanford University Press, 2019, p. 227);

In INS, the court recognized…a ‘quasi-property’ in news that was entirely independent of copyright…(I)t could be enforced only against business competitors, not against members of the public. Although readers were free to discuss and share news, press agencies were not allowed to reproduce news gathered by a competitor until its ‘commercial value’ had passed”. This established the tort of misappropriation that became known as the “hot news doctrine”. In Slauter’s words, it protects organizations that collect time sensitive information from free riding by competitors. Why not use it to protect news sources from appropriation of their property by news aggregators? It’s not that simple.

This is the USCO’s take on INS (as outlined in the Federal Register notice);   

“Because International News Service was based on no-longer extant federal common law and pre-dated the 1976 Copyright Act and modern First Amendment jurisprudence, this tort’s continued viability is unclear… even if a hot news misappropriation claim could be brought against a news aggregator, it would face a significant hurdle in avoiding preemption by the Copyright Act”.

The notice then examines various models that are being implemented or studied in other jurisdictions with particular reference to the EU and Australian models. Coming to the point of the study, it requests input and comments on three issues;

“(i) The effectiveness of current protections for press publishers under U.S. law;

(ii) whether additional protections for press publishers are desirable and, if so, what the scope of any such protections should be; and

(iii) how any new protections for press publishers in the United States would relate to existing rights, exceptions and limitations, and international treaty obligations.”

Comments are due by November 26.

I am sure there will be plenty of response from various stakeholders, from news publishers to internet platforms. Hopefully the USCO study will bring the US more into alignment with what is happening elsewhere in the world with regard to “encouraging” digital news aggregators to find ways to compensate news producers for the content that they, the platforms, use to attract and retain users.

Given the increasing momentum that the study and public hearings will give to news publishers in their quest for compensation from aggregators for the use of their product, it is possible that just the process alone will be enough to bring publishers and aggregators together to strike deals. However, until the Journalism Competition and Preservation Act passes Congress and becomes law, content producers will be disadvantaged since they will not be able to negotiate with the large and powerful platforms as a collectivity owing to anti-trust laws. They run the risk of being “picked off” by individual deals offered by the aggregators, on their terms. It is time to pass that legislation.

Now that the process of reviewing the terms of copyright to deal with the uncompensated and unlicensed use of news content by internet aggregators is underway, you can expect this issue to move more to the front-burner in the US, as it has in several other countries. Whatever mechanism the US eventually chooses, it seems inevitable (to me) that some form of revenue-sharing through licensing of content by the aggregators from news content providers will be the end result. After all, if Google and Facebook can come to an arrangement with Rupert Murdoch in Australia, or with French publishers, or north of the border with a number of Canadian publishers, why not in their home market?

Of course, the precedent-setting nature of the payment agreements in Australia and France helps explain why the two platforms engaged in such protracted trench warfare with the governments and courts in those countries, fighting for every inch of territory. But in the end, it was self-defeating, and they waved the white flag. So, while I believe there will inevitably be a similar outcome in the US, just how, when and on what terms are still the big questions. The just-launched US Copyright Office study on ancillary copyright–and the public input and roundtable that will be part of it—are important parts of the process that will help shape the outcome. We should follow it closely.

© Hugh Stephens, 2021. All Rights Reserved.

Author: hughstephensblog

I am a former Canadian foreign service officer and a retired executive with Time Warner. In both capacities I worked for many years in Asia. I have been writing this copyright blog since 2016, and recently published a book "In Defence of Copyright" to raise awareness of the importance of good copyright protection in Canada and globally. It is written from and for the layman's perspective (not a legal text or scholarly work), illustrated with some of the unusual copyright stories drawn from the blog. Available on Amazon and local book stores.

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