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February 16, 2021

From Canberra to Brussels, Big Tech faces tough copyright rules

By GlobalData Thematic Research

The European Union may follow Australia’s lead and force Big Tech companies to pay publishers for snippets of news content that appear on their online platforms. The new measures, promoted by some MEPs, would inflict serious damage on companies like Google and Facebook, whose market power relies on selling advertising space alongside content they get for free.

EU lawmakers are currently discussing two proposals, the Digital Services Act (DSA) and the Digital Markets Act (DMA). They are focused on the two biggest issues facing digital markets, misinformation and antitrust. The Financial Times reported that the DSA could be amended to include the option of binding arbitration for licensing agreements and require tech companies to inform publishers about changes to their methodology for ranking news stories on their sites, mirroring Australia’s proposed legislation.

The EU has been at the forefront of copyright legislation, but the Australian law goes further

The EU copyright directive, approved by the European Parliament in 2019, envisaged the obligation for platforms to strike licensing deals with news publishers and media companies. The reform gives publishers the right to compensation for snippets of content that appear on online platforms. However, it doesn’t include provisions for binding arbitration or a requirement for platforms to notify publishers in advance of algorithm changes. The directive is due to be incorporated into national legislation by June 2021. However, rather than reopening the reform, MEPs could include the new provisions in the DSA, which is still at the negotiation stage.

Covid has forced Big Tech to rethink

Google has recently reached an agreement whereby it will pay an association of French publishers to reuse snippets of their content. France is the first EU country to have transposed the copyright directive into national law. Implementing the new law, the French competition watchdog ruled last year that the search giant must pay publishers and news agencies for reusing their content. While Google has maintained that the EU copyright directive “strikes the right balance” between publishers and platforms, it has vowed to remove its search engine from Australia over the country’s attempts to introduce the new law.

Alongside copyright legislative initiatives, the coronavirus pandemic has also forced Big Tech companies to rethink their editorial policies. As a result of Covid-19, advertising revenue and content subscriptions have plummeted, and thousands of journalists have either been furloughed or laid off. Media industry lobbyists and lawmakers see this as an opportunity to demand tech giants give more money to support struggling media outlets.

Like Google, Facebook has always had tense relationships with publishers, which rely on the social media company to reach users but have accused the platform of stealing their content. In an unprecedented move, the social media company will, from January 2021, begin paying UK news publishers for some articles with the launch of Facebook News. The new product, which is already available in the US, features curated and personalized news from hundreds of UK outlets that have signed deals with Facebook.

Deals struck are not in the public domain

It is worth noting that the deals struck between Facebook and publishers are not public, so it is unknown how lucrative they could be for struggling news outlets. Nonetheless, this is a remarkable initiative, considering that, as recently as 2018, Mark Zuckerberg said he would not pay publishers for content.

At a time when antitrust pressures on Big Tech are mounting, it is in Google and Facebook’s interest to work with publishers and media companies to develop a more sustainable business model for all parties. These recent initiatives signal a point of no return for big platforms recognizing creators and publishers’ right to be fairly remunerated for their content.