France Reaches Agreement On Pay For Media; Australia Clashes With Google and Facebook On Same Issue

Google and France reach agreement on a scheme to compensate media while the company threatens to pull its search engine from Australia.

Not long after Google reached agreement with French media on how to compensate them under France’s law to implement a European Union (EU) Directive, the company threatened to pull its search engine from Australia for legislation introduced last month to make payment to that country’s media mandatory.

Last week, Google and the Alliance de la Presse d’Information Générale (APIG) announced agreement “about neighboring rights under French law…a major step forward: it is the culmination of months of negotiations within the framework set by the French Competition Authority.” APIG and Google explained:

• This agreement establishes a framework within which Google will negotiate individual licensing agreements with IPG certified publishers within APIG’s membership, while reflecting the principles of the law.  These agreements will cover publishers’ neighboring rights, and allow for participation in News Showcase, a new licencing program recently launched by Google to provide readers access to enriched content.
• The remuneration that is included in these licensing agreements is based on criteria such as the publisher’s contribution to political and general information (IPG certified publishers), the daily volume of publications, and its monthly internet traffic.

In April 2020, France’s Competition Authority found that Google had indeed violated French and EU law and must compensate French news media for use of their content. Google appealed, lost, and then agreed to negotiate.

In the weeks before the French appeals court ruled against Google, Google and Alphabet CEO Sundar Pichai announced the company will pay some media outlets up to $1 billion over the next three years “to create and curate high-quality content for a different kind of online news experience” for its new product, Google News Showcase. Pichai claimed:

This approach is distinct from our other news products because it leans on the editorial choices individual publishers make about which stories to show readers and how to present them. It will start rolling out today to readers in Brazil and Germany, and will expand to other countries in the coming months where local frameworks support these partnerships.

In response, the European Publishers Council (EPC) noted

The French Competition Authority decision from April considered that Google’s practices were likely to constitute an abuse of a dominant position and brought serious and immediate damage to the press sector. It calls on Google, within three months, to conduct negotiations in good faith with publishers and press agencies on the remuneration for their protected content. Google’s appeal in July seeks to get some legal clarity on parts of the decision.

Moreover, the EU Directive on Copyright in the Digital Single Market is being implemented in EU member states and would allow them to require compensation from platforms like Facebook and Google. The EPC claimed:

Many are quite cynical about Google’s perceived strategy. By launching their own product, they can dictate terms and conditions, undermine legislation designed to create conditions for a fair negotiation, while claiming they are helping to fund news production.

The Directive on Copyright in the Digital Single Market provides:

This Directive lays down rules which aim to harmonise further Union law applicable to copyright and related rights in the framework of the internal market, taking into account, in particular, digital and cross-border uses of protected content. It also lays down rules on exceptions and limitations to copyright and related rights, on the facilitation of licences, as well as rules which aim to ensure a well-functioning marketplace for the exploitation of works and other subject matter.

Matters in Australia stand on different ground. In testimony before the Australian Senate Economics Legislation Committee, the Managing Director of Google Australia and New Zealand Melanie Silva said “[i]f this version of the code were to become law, it would give us no real choice but to stop making Google Search available in Australia.” She added “[i]t’s not a threat…[i]t’s a reality.” Silva was testifying on a recently released bill that would require Google, Facebook, and others to pay Australian news media for use of their content. Both tech giants have been fighting this initiative since it was launched in early 2020. Silva added the new law “would set an untenable precedent” and pose “unmanageable financial and operational risk.” Silva later posted a video on Twitter, making the case against the legislation. Additionally, Facebook threatened to limit what users in Australia could post and see if the law goes into effect.

In December 2020, Canberra unveiled the “Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020” that “establishes a mandatory code of conduct to help support the sustainability of the Australian news media sector by addressing bargaining power imbalances between digital platforms and Australian news businesses” according to the Explanatory Memorandum. The legislation comes after the center-right government, the Liberal–National Coalition, tried to negotiate a voluntary agreement with Google and Facebook, but talks fell apart. In late May, Australia’s Treasurer Josh Frydenberg explained in an op-ed that because Facebook and Google have not come to an agreement with the Australian Competition & Consumer Commission (ACCC) in “facilitat[ing] the development of a voluntary code of conduct governing the relationships between digital platforms and media businesses, the goal of which was to protect consumers, improve transparency and address the power imbalance between the parties.”

In late July 2020, the ACCC released for public consultation a draft of “a mandatory code of conduct to address bargaining power imbalances between Australian news media businesses and digital platforms, specifically Google and Facebook.” In publishing the draft, the ACCC explained

The code would commence following the introduction and passage of relevant legislation in the Australian Parliament. The ACCC released an exposure draft of this legislation on 31 July 2020, with consultation on the draft due to conclude on 28 August 2020. Final legislation is expected to be introduced to Parliament shortly after conclusion of this consultation process.

This is not the ACCC’s first interaction with the companies. In December 2020, the ACCC sued Facebook and two subsidiaries “for false, misleading or deceptive conduct when promoting Facebook’s Onavo Protect mobile app to Australian consumers.” The Australian regulator is claiming Facebook and its subsidiaries misrepresented VPN services that were offered, in large part, to collect personal data. The ACCC is arguing that Facebook Inc., Facebook Israel Ltd and Onavo,Inc. “made false, misleading or deceptive representations that Onavo Protect would keep users’ personal activity data private, protected and secret, and that such data would not be used for any purpose other than to provide the Onavo Protect services.” The ACCC argued that “a key purpose and use of Onavo Protect, which utilised Facebook’s servers, was for Facebook and Onavoto collect significant personal activity data, including about users’ internet and app activity, for Facebook and Onavo to use for their commercial benefit, including to support market analytics and related activities such as identifying future acquisitions.”

In October 2019 the ACCC announced a legal action against Google “alleging they engaged in misleading conduct and made false or misleading representations to consumers about the personal location data Google collects, keeps and uses” according to the agency’s press release. In its initial filing, the ACCC is claiming that Google mislead and deceived the public in contravention of the Australian Competition Law and Android users were harmed because those that switched off Location Services were unaware that their location information was still be collected and used by Google for it was not readily apparent that Web & App Activity also needed to be switched off.

In 2019, the ACCC released its final report in its “Digital Platforms Inquiry” that “proposes specific recommendations aimed at addressing some of the actual and potential negative impacts of digital platforms in the media and advertising markets, and also more broadly on consumers.”

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