Europe Publishers Turn Up Heat on Facebook After Australia Spat

(Bloomberg) -- News publishers are lobbying the European Union to copy parts of a proposed law in Australia that would force Facebook Inc. and Alphabet Inc.’s Google to pay an agreed price for their content.

The publishers want EU lawmakers to force the tech giants into binding arbitration if they can’t agree on payments for snippets of articles shown on the platforms. They want a clause inserted in legislation proposed in December to rein in the big tech firms, known as the Digital Markets Act.

The industry sees an opportunity to press its case after Facebook imposed a news sharing blackout in response to Australia’s legislative move in an unprecedented show of strength. Publishers have hemorrhaged advertising revenue to digital platforms for decades.

“It has become clear that without the full force of an Australian style approach, gatekeeper tech companies threaten to walk away from negotiations or exit markets entirely,” said Angela Mills Wade, executive director of the European Publishers Council, which represents publishers including Axel Springer and The New York Times. She said the EPC would support European lawmakers seeking to ensure that platforms negotiate in good faith.

The EU already agreed a separate copyright law to help publishers seek compensation from the platforms, after years of negotiations involving industry, officials and lawmakers. Andreas Schwab, the lead lawmaker in charge of the DMA, said the copyright law protects people’s ability to share content while supporting quality journalism online.

For some publishers, the rules still don’t go far enough. France is one of the only countries so far to apply the copyright law, but its competition authority had to step in last year to force Google to pay for displaying news.

When France rolled out the law, Google started showing stripped-down French news search results that didn’t include previews of the articles. The search giant eventually reached a deal in January with a French publishers’ union that it will negotiate individual license agreements.

The tech giants are still finding ways to “wriggle out” of their obligations to publishers even with the EU copyright rules in place, said Wout van Wijk, executive director of News Media Europe, an umbrella organization representing national publisher associations.

“We would welcome a clause that mandates binding arbitration,” he said.

Regulatory Assault

Facebook said Australia’s proposal of compulsory arbitration sets a precedent where a government gets to decide who enters into content agreements and “how much the party that already receives value from the free service gets paid,” according to a blog post.

Google has also threatened to shut its search engine in Australia if the proposal becomes law, in particular because the rules would cover hyperlinks to news articles, and not just the fragments of stories, as is the case in Europe.

The company is hoping recent deals it’s struck with some news organizations will be enough to head off a fresh regulatory assault in Europe and elsewhere. As part of its product called Google News Showcase, the search giant has started paying select media outlets, including those in Germany, the U.K., Australia and Argentina, to display articles on its news app and has set aside $1 billion to cover the program’s first three years.

It’s far from certain whether a binding arbitration clause pushed for by publishers would end up in EU law as part of the new Digital Markets Act. The European Parliament would need to agree on that amendment before entering into negotiations with the commission and member states where further changes are likely.

A commission spokesperson said the Digital Markets Act wasn’t “intended to be an enforcement tool for other pieces of EU legislation,” adding it was important to focus on rapidly implementing the copyright rules “before considering launching any possible future legislative action.”

The copyright law grants publishers the right to seek compensation from online services that display fragments of their articles, without demanding arbitration if the two sides fail to agree a price. Publishers have to take the platforms to court if they don’t agree. European member states have until June 7 to write the copyright rules into their national laws.

The law was a compromise that sought to avoid creating rules that would lead platforms to withdraw their services, as was the case in Spain, according to Julia Reda, a free-speech activist and former member of the European Parliament who was heavily involved in the copyright legislation. Google shut its news service in Spain in 2014 after the country passed a law requiring Spanish publications to charge aggregators for displaying excerpts of stories, whether publishers want to or not.

“The lesson to be learned is that it is best to strive to reach amicable agreements,” said Ian Murray, executive director of the Society of Editors, which represents British journalists. “In the end, news providers here in the U.K., as elsewhere, just want a fair deal for their content.”

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