Points

• France was the first EU country to partly implement the DSM Directive with respect to the so called related right for press publishers.
• Google did not want to pay publishers for the use of press publications online, and stopped displaying press content in its services until it obtains a free license.
• The French competition authority obliged Google via an interim decision to start negotiations with publishers. But is competition law the right tool for implementing new IP rights, which many consider to be structurally flawed?

Through its interim decision of 9 April 2020 r. the French competition authority, the Autorité de la Concurrence (the “Autorité”), imposed a series of obligations on Google, in response to the demands made by representatives of the French press sector. France was the first country to transpose the ancillary copyright for press publishers introduced by Directive 2019/790 on Copyright in the Digital Single Market (“CDSM Directive”). It gave publishers and news agencies the exclusive right to authorise or prohibit the online use (excluding hyperlinking) of their press publications by information society service providers. The aim of the new regulation was to oblige digital aggregators, such as Facebook or Google Search, to negotiate remuneration for relevant rightsholders when such platforms post publishers’ content. The financial crisis that European press has been experiencing since at least 2007 can be doubtlessly attributed in part to the wide (and often free) availability of press publications online and the publishers’ difficulties in managing the licensing of such online use. The weak position of publishers is seen as a possible threat to the freedom of plurality of press, which is essential for the proper functioning of democratic societies.

In spite of the legislation’s objectives, Google – whose heavy exploitation of press content across its services, including extracts called snippets - unilaterally decided that it would not enter into negotiations with publishers. Instead, they were left with a choice to either let the digital giant keep on using the now protected materials for free or to accept that only bare hyperlinks would be displayed in search results. This proved a particularly difficult dilemma since Google’s search engine accounted for a significant portion of the traffic and income on news websites e.g. from advertising space these sites provide. Consequently, the Autorité in its preliminary analysis sided with the complainants who claimed that what can be seen as form of blackmail by Google could indeed be regarded as an abuse of its unrivalled power in the market for internet search services. The Autorité, having found Google’s behaviour to constitute serious and immediate harm to the economically weakened press sector in France, ordered the undertaking to negotiate in good faith the remuneration due to publishers and press agencies.

The Autorité’s interim decision launched what already became a veritable procedural saga. At first, it was unsuccessfully challenged before the Paris Court of Appeal, which almost entirely confirmed the authority’s findings. Then, it gave rise to a separate decision of the Autorité imposing a fine of 500 million EUR on Google for non-compliance with the original injunctions. The final decision on the merits is still pending.

But it is not the procedural complexities of the case that have been drawing the attention of legal scholars. There is considerable discussion whether the decision of the Autorité may pave the way for competition law to become an instrument not only for maximizing economic efficiency by protecting the competitive process, but also possibly a means for achieving social redistribution and fairness in digital markets which are characterized by power imbalances stemming from their tendency towards monopolization. Another issue is the potential for competition law to become a tool for guaranteeing the effectiveness of controversial provisions of the CDSM Directive (e.g. Article 15 or Article 17). Their wording was intentionally left vague during the legislative procedure because the objectives they pursue - addressing disproportions and the unfair transfer of value from rightsholders who create content to platforms which profit from it through its dissemination – are very contentious.

All this lies at the heart of the controversies surrounding the Autorité’s interim decision against Google. Firstly, a number of scholars underline that competition law, as it currently stands, is not the right instrument for enforcing the related right of publishers because not only would it go against the currently predominantly economic scope of competition law but also the established case law on abuse of dominance. One of the biggest issues, in fact, is that the French competition authority reproached Google for infringing the “spirit” of the new law. The undertaking’s behaviour could not actually be seen as contrary to the provisions regulating the neighbouring right since they allow zero-remuneration licences and do not oblige the parties to engage in negotiations. This point of view finds some confirmation, for example, in the completely different conclusions reached by the German antitrust authority in 2015 when it decided not to investigate a case also concerning the related rights of publishers (albeit not transposing the CDSM Directive). Secondly, competition law scholars claim that competition law should not be a tool for repairing laws which by many are considered flawed, toothless or even outright detrimental.

Hence, there are many controversies whether the French authority’s expansive reading of the applicability of the prohibition against abuses of a dominant position can in fact be defended. Of course, one needs to consider the undeniable changes that competition law is currently undergoing in relation to the objectives it is meant to pursue, especially in the context of the regulatory challenges posed by the digital economy. This in turn prompts attempts to review existing EU law approaches to identifying abuses of dominance. An example of this can be found in the evolving importance of fairness as a general, operational aim for competition policy and the broader use of the special responsibility doctrine as a basis for new theories of harm. This is especially evident in the new Digital Markets Act, which through its focus on fairness, may be used to tackle problems related to the ineffectiveness of the CDSM Directive’s provisions. In fact, this may already be happening in Germany. The Bundeskartellamt, acting on the basis of the new national rules for large digital companies, inter alia intends to examine in its proceedings into the Google News Showcase services whether contractual terms applied by Google may make it disproportionately difficult for publishers to enforce their general ancillary copyright.