[Guest post] The new German competition tool in action – Ensuring the effectiveness of the new press publisher’s neighbouring right against Google

The IPKat has received the following comment from Katfriend Moritz Sutterer (Doctoral Student and Junior Research Fellow at Max Planck Institute for Innovation and Competition) on a new competition tool that the German Competition Authority tried very recently on a firm 'of paramount significance for competition across markets' - Google - concerning neighbouring rights.

Here's what Moritz writes:

The New German Competition Tool in Action – Ensuring the Effectiveness of the New Press Publisher’s Neighbouring Right Against Google

by Moritz Sutterer

On 12 January 2022, the German Competition Authority (Bundeskartellamt) announced that it would hold consultations in the press publishing sector on the Google News Showcase online service (see press release here). Already in June 2021, the Bundekartellamt had initiated proceedings against Google following a complaint by Corint Media concerning Google’s licensing and presentation practices i.a. in the News Showcase service. Corint Media is the German Collective Rights Management Organisation (CMO) responsible for the management of the neighbouring rights of broadcasters and press publishers, including the German press publisher’s neighbouring right under Section 87g of the German Copyright Act. 

'When the catch seems so close…'

With News Showcase, Google offers news publishers the opportunity to present their contents in prominent “story panels” which are displayed under Google News and Google Discover, a Google information service that does not rely on a specific search request but presents content based on user preferences. Prior to the launch of the services, Google entered into licensing agreements with a range of German publishers. Later, the company announced that it would integrate the licensed content also into its general search service with highlighted story panels of participating publishers, showing logos, photos, titles and further content in a condensed form. What seems at first glance to be an attractive service to the news publishers may turn into a serious threat, for example to those publishers who do not want to participate in this system, but instead rely on their neighbouring rights. It may also harm the participating publishers, who, according to Corint Media, are required to grant a full catalogue of rights, which would prevent them from exercising their new neighbouring right separately and, more importantly, through a CMO. The Bundeskartellamt therefore started to investigate the contractual conditions for publishers engaging in the News Showcase service, in particular with regard to the remaining possibility for the participating publishers to enforce their press publishers' neighbouring right against Google. In addition, the Bundeskartellamt raised concerns that Google’s manoeuvre would lead to self-preferencing of its own services or impede services offered by competing parties. Finally, the general conditions for access to Google’s News Showcase are being reviewed with regard to a potential discrimination of press publishers. 

The proceedings are based on the new German competition tool which provides for an extended abuse control by the competition authority against companies which have been determined as being of “paramount significance for competition across markets” (Section 19a GWB). To this end the Bundeskartellamt assessed the position of Alphabet/Google in digital markets and came to the unsurprising conclusion that the firm is of “paramount significance for competition across markets” (File number B7 – 61/21, a summary of the case is available here). What is however interesting about the Bundeskartellamt decision of 30 December 2021 is the assessment of the different services and their interaction. The decision of the Bundeskartellamt is addressed at Alphabet and includes all its affiliates within the meaning of Section 36(2) GWB. It is thus not only the classical Google search engine that is now subject to extended control but all services, including YouTube, Chrome, Android, the Play Story, and Google’s online advertising services (the draft DMA also designates the provider of a “core platform service” as “gatekeeper” but the obligations of Arts. 5 and 6 DMA seem to apply only “in respect of each of its core platform services”). Furthermore, the decision addresses the role of data collected by the different services and their potential to improve and expand existing services or develop new services (the Bundeskartellamt is also examining Google’s data processing terms in a parallel proceeding, see here). All this would bring an enormous competitive advantage to Google and put it in the position to control other companies’ access to its users and to set the “rules and conditions for other businesses across markets”. 

In a press release on the decision, the Bundeskartellamt summarized: “In its digital ecosystem Google […] has significant influence over other companies’ access to its users and advertising customers (e.g. via Google Search, YouTube, Android, Play Store or its advertising services) and can set rules and conditions for other businesses across markets. In this respect, these services can be described as ‘infrastructure’ since, for one thing, a large number of other services can to a great extent only be offered using Google’s services and, for another, Google’s services are of great importance for the business activities of third parties.” Google meanwhile has declared that it would not appeal the decision. 

The determination of Alphabet/Google as a company of paramount significance across markets opens the door for further investigation in Google’s market conduct prohibiting it to engage in anti-competitive practices specified under Section 19a(2) GWB. This includes the possibility to prohibit an undertaking from 

1. favouring its own offers over the offers of its competitors when mediating access to supply and sales markets, in particular a) presenting its own offers in a more favourable manner; 

[…] 

2. taking measures that impede other undertakings in carrying out their business activities on supply or sales markets where the undertaking’s activities are of relevance for accessing such markets, in particular 

a) taking measures that result in the exclusive pre-installation or integration of offers provided by the undertaking; 

b) preventing other undertakings from advertising their own offers or reaching their purchasers through other channels in addition to those provided or mediated by the undertaking, or making it more difficult for other undertakings to do so; 

Google has now declared that it will not include the Showcase content in its general search results and has proposed further measures to respond to the competition concerns, such as to modify the Showcase contracts and to clearly separate them from the negotiations between Google and the press publishers or their CMOs with regard to their neighbouring rights. Andreas Mundt, President of the Bundeskartellamt stated: “Google has proposed measures to respond to our competition concerns relating to Google News Showcase. The company no longer plans to include Showcase content in the general search results. The conditions for participating in Google News Showcase are not intended to prevent publishers from enforcing their general ancillary copyright. Access to Google News Showcase is based on objective criteria. We rely on the assessment of the market players affected to ensure that the measures proposed by Google are effective. In view of the wide variety of interests the publishers may have we are thus conducting broader consultations in the sector.” 

Google’s proposed commitments are not publicly available, and it will be interesting to see the outcome of the Bundeskartellamt’s consultations in the sector. Certainly, as the consultation and negotiations progress, we will learn more details on what Google is offering exactly. 

The Bundeskartellamt's intervention is an important success for Corint Media and we can expect that it will positively influence its bargaining position in the coming rounds of negotiation. However, what has proved to be an effective instrument against Google’s attempts to divide the German press publishers’ landscape could well turn out to be one hit wonder, as the new German competition tool to better control “companies of paramount significance across markets” may conflict with the currently debated DMA at European level. A replacement by the DMA, however, would not exactly mean a relief for Google.

Photo courtesy: Moritz Sutterer