DSM Directive: French Competition Authority orders Google to negotiate Remuneration with Press Publishers

One year ago today, the European Parliament and the Council officially adopted the Directive on copyright and related rights in the digital single market (DSM Directive, 2019/790 EU). After the dust has settled on some of its more controversial provisions (see Eleonora Rosati's Katpost series here, here, here, here and here), the Directive is now rippling through national legislatures (the deadline to transpose its provisions to national law will run until 7 June 2021) and users and right holders in some member states are already starting to slowly feel its effects. 

Last week, for the first time the French Competition Authority issued interim measures based on the national transposition of the new neighbouring right set out in Article 15 of the DSM Directive. Kat reader Lisa Moser provides an overview for the IPKat on this decision. Over to Lisa: 

Not in the mood for good faith negotiation

Article 15 of the new DSM Directive establishes a neighbouring right for press publishers, allowing them to exploit the online use of their publications by "information society service providers". This provision is especially tailored to allow press publishers to charge news aggregation platforms, search engines and social media platforms for displaying their content in their compilations. 

France transposed this provision in the French Act on Neighbouring Rights and the relevant amendment entered into force on 24 October 2019. In reaction, Google unilaterally decided to no longer display press publishers' contents in its search results unless the publishers authorize such display free of charge. If the publisher refuses to do so, only a headline and a link to the content will appear instead of the regular preview. In the view of French press publishers and the news agency AFP, this will almost certainly result in a loss of visibility and potential ad revenue. 

In November 2019, the AFP news agency and the unions SEPM and APIG, which represent the interests of a large number of national and regional press publishers in France, together filed complaints with the French Competition Authority (FCA), claiming that Google's practice constitutes an abuse of a dominant position as well as an abuse of economic dependence. In addition to their submissions on the merits, the claimants requested that the FCA order Google, by way of interim measures and pending a decision on the merits, to enter into good faith negotiations. 

In its decision of 9 April 2020, the FCA ruled on the request for interim measures and held that, in view of Google's market share of around 90% and the high barriers to entry and expansion in this market, Google is likely to have a dominant position on the French market for general online research services. 

Moreover, the FCA considered that Google's practices, under a prima facie view, are likely to be characterized as anticompetitive. By avoiding any form of negotiation and remuneration for the display of content protected under neighbouring rights, it considered (under the same prima facie standard) that Google has imposed unfair trading conditions on publishers and news agencies. Furthermore, Google imposed its principle of zero remuneration on all publishers without examining their respective situations and the relevant protected content. By treating, without any objective justification, economic players in different situations in an identical manner, the Authority considered that there was a prima facie case of Google engaging in a discriminatory practice. 

Lastly, the Authority held that there was a prima facie case of Google abusing its dominant position in order to circumvent the Neighbouring Rights Act, particularly by-- 

1. insisting that publishers and news agencies grant free licences and thereby systematically imposing the principle that protected content be displayed on its services for free and without any possibility to negotiate;
2. refusing to provide the information necessary for the determination of the compensation;
3. using headings of articles in their entirety, considering that they are, in principle, outside of the scope of the Neighbouring Rights Act.

In its assessment, the FCA also took into account that Google's new display policy imposed more unfavourable trading conditions on industry players than those that existed prior to the entry into force of the Neighbouring Rights Act. 

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The FCA held that Google's likely dominant position in the market was the reason why Google was able to impose such conditions on the press publishers. As the traffic generated by Google is crucial and non-replaceable for press publishers and news agencies, they have no choice but to comply with the policy and to accept conditions that are even more unfavourable them than the ones that existed before the transposition of the DSM Directive. 

Ultimately, the FCA found that there has been a serious and immediate damage to the press sector resulting from Google's practice. It therefore granted the requested interim measure and ordered Google to negotiate in good faith the terms and conditions as well as the remuneration due for the use of content from publishers and news agencies. These negotiations have to take place within three months from the request of the publisher or news agency and integrate compensation for the period since 24 October 2019. The interim measures will remain in force until the FCA reaches a decision on the merits of the case.