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Google Gets $593M Fine for French News Copyrights Row

July 13, 2021

Compensation for neighboring rights of publishers and press agencies: the Authority is fining Google up to 500 million euros for failure to comply with several injunctions issued against it in April 2020.

It orders him, moreover, to comply with injunctions 1 and 2 pronounced by its initial decision, under penalty of daily penalties.

The essential

In a decision made public today, the Authority is imposing on Google a sanction of 500 million euros for having disregarded several injunctions issued in the context of its decision of provisional measures of April 2020 (decision n ° 20-MC-01 of April 9, 2020 relating to requests for precautionary measures presented by the Syndicate of magazine press editors, the Alliance de la presse de l'Information générale et a and Agence France-Presse).

The Authority also orders Google to present an offer of remuneration for the current uses of their protected content to publishers and press agencies that have contacted the Authority and to provide them with the information necessary for the evaluation of such offer, under penalty of being subject to periodic penalty payments of up to 900,000 euros per day of delay, if Google has not done so within two months.

The President of the Authority, Isabelle de Silva said of today's decision:

“ When the Authority imposes injunctions on companies, they are required to apply them scrupulously, respecting their letter and their spirit. In the present case, this was unfortunately not the case.

At the end of an in-depth investigation, the Authority found that Google had not complied with several injunctions issued in April 2020. First of all, Google's negotiations with publishers and press agencies cannot be regarded as having been conducted in good faith, while Google imposed that the discussions necessarily take place within the framework of a new partnership, called Publisher Curated News, which included a new service called Showcase. In doing so, Google refused, as it has been asked several times, to have a specific discussion on the remuneration due for current uses of content protected by neighboring rights. In addition, Google has restricted the scope of negotiation without justification, by refusing to include in it the contents of the press agencies taken up by publications (images for example) and by excluding all the non-IPG press from the discussion, even though it is undoubtedly concerned by the new law, and that its content is also associated with significant revenue for Google. These failures were aggravated by the non-transmission of information that would have allowed fair negotiation, and by the violation of obligations aimed at ensuring the neutrality of the negotiation vis-à-vis the display of protected content and existing economic relations by elsewhere between Google and publishers and news agencies. and that its content is also associated with significant revenues for Google. These failures were aggravated by the non-transmission of information that would have allowed fair negotiation, and by the violation of obligations aimed at ensuring the neutrality of the negotiation vis-à-vis the display of protected content and existing economic relations by elsewhere between Google and publishers and news agencies. and that its content is also associated with significant revenues for Google. These failures were aggravated by the non-transmission of information that would have allowed fair negotiation, and by the violation of obligations aimed at ensuring the neutrality of the negotiation vis-à-vis the display of protected content and existing economic relations by elsewhere between Google and publishers and news agencies.

The sanction of 500 million euros takes into account the exceptional seriousness of the breaches observed and what Google's behavior has led to further delay the proper application of the law on neighboring rights, which aimed to better take into account the value of content from publishers and news agencies included on the platforms. The Authority will be extremely vigilant about the correct application of its decision, as non-execution can now lead to periodic penalty payments. "

Several publishers and press agencies have seized the Authority, citing non-compliance by Google with the precautionary measures pronounced by the Authority in April 2020
 

The Syndicate of magazine press publishers (SEPM), the Alliance de Presse d'Information Générale (APIG) and Agence France Presse (AFP) seized, respectively at the end of August / beginning of September 2020, the Competition Authority of non-compliance with the injunctions issued by the Competition Authority against Google in its decision 20-MC-01 of April 9, 2020 (see press release of April 9, 2020 ).

For the record, in its emergency measures decision 20-MC-01, the Authority noted that following the adoption of n ° 2019-775 of July 24, 2019 tending to create a neighboring right for the benefit of press agencies and publishers, transposing directive n ° 2019/790 of April 17, 2019 on copyright and related rights in the digital single market, Google had unilaterally decided that it would no longer display extracts of articles, photographs and videos within its various services, except that the publishers give it permission free of charge. The Authority considered that this behavior was likely to constitute an abuse of a dominant position and that it caused serious and immediate harm to the press sector. It had issued, pending a decision on the merits, seven injunctions against Google.judgment of October 8, 2020 , and has become final (Google has not lodged an appeal in cassation).

In particular, Google had been instructed:

- enter into negotiations in good faith with publishers and press agencies who so desire ( Injunction no.1 ) for a period of three months from the request of the publisher or the press agency ( Injunction no. ° 4 );

- communicate the information necessary for the transparent assessment of the compensation provided for in Article L. 218-4 of the Intellectual Property Code (the “CPI”) ( Injunction no. 2 );

- ensure that a principle of strict neutrality is respected during negotiations, so as not to affect the indexing, classification and presentation of protected content taken up by Google on these services (injunction 5); the decision stated in this regard that:  This is to prevent publishers from suffering unfavorable consequences on the usual conditions of display, indexing and classification of their content on Google, because or in liaison with ongoing negotiations ". The Paris Court of Appeal in its judgment of October 8, 2020 clarified the scope of injunction No. 5, indicating that: “   This injunction does not prevent improvements and innovations in the services offered by Google LLC companies, Google Ireland Ltd and Google France, provided that they do not lead, directly or indirectly, to any prejudicial consequence to the interests of the holders of related rights concerned by the negotiations provided for in Articles 1 and 2 of this decision ”;

- ensure that the principle of strict neutrality in negotiations is respected on any other economic relationship that may exist between Google and publishers and press agencies (injunction 6 ); the decision specified in this regard that: “  This is to prevent Google from deviating from the negotiations on neighboring rights by offsetting the remuneration paid to publishers for neighboring rights on other activities. It is also a matter of preventing Google from using its dominant position in the generalist search services market to impose, during negotiations with publishers and press agencies, the use of some of its services  ”;

- send the Authority regular reports on the modalities of implementation of the decision ( Injunction n ° 7 ).

Injunctions not respected by Google

To reach its decision, the Authority relied on a thorough contradictory investigation which led it to take into consideration a large number of documents produced by the parties relating to the progress of the negotiations (emails, minutes of meetings, etc. .). The observations produced during the procedure carried out before the Authority in respect of the respect of protective measures, the declarations and documents collected from publishers or third-party press agencies, and finally the discussions held in front of the college during the meeting of May 5 2021 led the Authority to consider that Google has disregarded, in several respects, several injunctions of the decision and in particular, injunction 1, the most important, relating to the obligation to negotiate in good faith.

Injunction 1: the obligation to negotiate in good faith under the conditions set by article L. 218-4 of the CPI and according to objective, transparent and non-discriminatory criteria
 

Moving trading to the new Showcase service

Google unilaterally imposed that discussions with publishers and AFP focus on a global partnership called Showcase devoted mainly to the offer of new services by publishers, and in which neighboring rights under current uses of protected content were only an ancillary component with no separate financial valuation.

The Autorité thus noted that while the requesting parties have consistently requested that the negotiations relate in a specific and transparent manner to the remuneration due for the current use of content protected by neighboring rights, Google has systematically imposed a global discussion focusing on the adhesion of publishers and news agencies to a new global partnership, called Publisher Curated News , or PCN, which focused, in particular, on a new service called Showcase .

Google has also unjustifiably reduced the scope of negotiations with regard to the scope of income derived from the display of protected content: according to Google, only advertising income from Google Search pagesposting content should be taken into account in determining the remuneration due. The Authority considered that this position, leading to the exclusion of income from other Google services and all indirect income related to this content, was contrary to the Law and to the Decision; This is all the more so since the Decision noted the importance for Google of press content, which plays a role in triggering Internet users' visits and in extending consultation times, thus strengthening Google's position. and the data available to it.

 

The refusal to negotiate with press editors who do not have a Political and General Information ("IPG") certification

Google has deliberately circumscribed the scope of the law on neighboring rights by excluding the principle of remuneration for press content from titles that do not have a Political and General Information certification and, for this purpose, relying on to make, on a bad faith interpretation of article L. 218-4 of the code of the intellectual property, which is however unambiguous. This negotiating position appears to be contrary to the decision of the Competition Authority, confirmed by the Paris Court of Appeal. This breach is all the more serious given that, according to Google's own evaluations, the direct income it derives from “non-IPG” content is greater than that it derives from “IPG” content.

 

Google's refusal to negotiate remuneration for neighboring rights with press agencies

In addition, Google has informed AFP and the French Federation of Press Agencies, on several occasions, that as press agencies, they could not benefit from remuneration for their content taken over by third-party publishers. in their publications.

The Authority considered that this negotiating attitude was contrary to the Decision of April 9, 2020, which was itself based on the terms of the law, to consider that the press agencies could claim neighboring rights. The Authority noted, in this decision, as in that of April 2020, that the legislator had clearly expressed its intention to grant the producer of journalistic content a property right, in order to remunerate their investments for the production of content. quality press, and to better share value between the producers of press content and online communication services to the public. The French legislator has been very explicit on the need to include press agencies,

 

Injunction 2: the obligation to communicate to publishers and press agencies the information necessary "for a transparent assessment of the remuneration due"

The law on neighboring rights required platforms (online communication services to the public) to "  provide press publishers and news agencies with all the information relating to the uses of press publications by their users as well as all the information necessary for a transparent assessment of the remuneration [due for neighboring rights] and its distribution  ”(article L. 218-4 of the CPI).

Injunction 2 required Google to communicate to publishers and news agencies the information provided for by this provision.

The elements gathered during the investigation show that this communication was

  • partial , as it is limited to direct advertising revenue generated by the Google Search service, to the exclusion of all revenue, particularly indirect, linked to the use of this content.
  • late in view of the time frame imposed, since information relating to the Discover and Google News services was given barely a few days before the end of the deadline set by the injunction;
  • and finally insufficient to allow the striking companies to make the link between Google's use of protected content, the income it derives from it and its overall financial proposals. In this regard, L'Express stated in particular that “Google has not provided us with any formulas or data to support its proposal. Google told us that it had a global envelope for publishers within the framework of Publisher Curated News at the French level. " . For its part, Liberation also indicated that it did not have “[…]obtained information on the construction of this remuneration, although we requested them. We also have no idea of ​​the valuation that Google has made for the use of our neighboring rights. There is a wording in the contract which says that it is a global license which includes remuneration for neighboring rights.  ".

 

Injunction 5: the obligation of neutrality on the terms of indexing, classification and presentation of the protected content of publishers and press agencies on Google services during negotiations relating to neighboring rights

Google violated the obligation of negotiation neutrality imposed on it by the provisional measures decision by linking the negotiation on remuneration for the current use of content protected by neighboring rights to the conclusion of other partnerships that may have an impact. on the display and indexing of content from publishers and news agencies.

The Authority noted that while nothing prevents Google from launching a new program to improve the visibility of publishers on its services, the fact, in the circumstances of the case, of having conditioned access to this new program with total remuneration, which did not include any specific valuation of neighboring rights under current uses of protected content and risked, in the event of refusal of the agreement, of degrading the visibility of publishers on its services, characterized a breach to Injunction 5.

The strategy put in place by Google has thus strongly encouraged publishers to accept the contractual conditions of the Showcase service and to renounce negotiations relating specifically to the current uses of protected content, which was the subject of the Injunctions, under penalty of seeing their exposure and their remuneration degraded compared to their competitors who would have accepted the proposed terms. Google cannot therefore claim to have taken the necessary measures to prevent its negotiations from affecting the presentation of protected content in its services.

 

Injunction 6: the obligation of neutrality in negotiations relating to neighboring rights vis-à-vis any other economic relationship that Google maintains with publishers and press agencies

This injunction aimed to prevent Google “  voiding the negotiations on neighboring rights of their effects by offsetting the remuneration paid to publishers for neighboring rights on other activities. It was also  to prevent Google from using its dominant position in the market for general search services to impose, during negotiations with publishers and press agencies, the use of some of its services. . "

For most of the negotiation period, Google linked discussions about possible compensation for current use of copyrighted content to discussions about the new Showcase program . However, contrary to what Google maintains, Showcase is not limited to a new display format for protected content, but constitutes a new service, which did not exist when the provisional measures were adopted, and which is also based on on new obligations imposed on press editors. They must indeed both provide specific editorial work to select the articles to appear on Showcase, but also agree to make content containing large extracts, or even all of the press articles created by publishers or press agencies, available to Internet users.

In addition, Google was also able to link participation in the Showcase program to subscription to the Subscribe with Google (SwG) service. Google has thus made a link between the negotiation of neighboring rights and the subscription of new services, these also leading Google to benefit from new advantages or services, the SwG service resulting in particular in a levy, for the benefit of Google, a percentage of all financial flows received by the publisher for subscriptions taken out.

Extremely serious practices

Failure to comply with an injunction is in itself a practice of exceptional gravity.

Google's behavior is the result of a deliberate, elaborate and systematic strategy of non-compliance with Injunction 1 and appears as the continuation of the opposition strategy of Google, put in place for several years, to oppose the principle even related rights during the discussion of the directive on related rights, then to minimize its concrete scope as much as possible.

It thus appears that the negotiation strategy put in place by Google with regard to the negotiations conducted within the framework of the Decision was part of a more global strategy, implemented at the global level, and aimed at avoiding or limiting as much as possible payment of remuneration to publishers, to use the Showcase service in order to resolve the basic debate on the allocation of specific rights to publishers and agencies for the reproduction of press content, and, finally, to use negotiations on neighboring rights to obtain the production of new content by press publishers, via Showcase , and subscription by the latter to the SwG service, which allows Google to collect additional income from subscriptions to press titles.

The lack of communication of information making Google's proposals transparent has been a major obstacle to holding negotiations in good faith, especially since the information asymmetry is considerable between Google and publishers and press agencies, with regard to both the figures on the consultation of Google pages and services on which content protected by law appears, and the income that Google derives from the current use of protected content. Likewise, the absence of measures taken by Google to ensure the neutrality of negotiations on the way in which the protected content of publishers and press agencies is indexed and presented in its services is likely to place publishers in a constrained situation. , which hinders the achievement of the objective of implementing a negotiation in good faith referred to in the Injunctions. In addition, the establishment of links between the remuneration of neighboring rights for current uses of protected content and participation in new services and / or use of Google services constitutes a diversion of the objective of the Injunctions in favor of of Google, which could further increase its position in the general search services market.

The fact that APIG, like other individual publishers, signed an agreement after the time frame set by the Injunctions cannot, by itself, prevent the finding of non-compliance with the Injunctions. Indeed, this must be assessed in the light of the terms and the subject of the decision on provisional measures. As soon as the Authority finds that the negotiations were not conducted in good faith in compliance with the applicable Injunctions, the fact that agreements were signed cannot in itself demonstrate such compliance, especially since the signatory publishers found themselves in a situation of inferiority and asymmetry in this negotiation. Moreover, while this decision does not by itself render the signed agreements ineffective,

The sanction and the obligation to comply with the injunctions under penalty

In view of the circumstances of the case, the Authority pronounces against Google a sanction of 500 million euros and also orders it:

  • in respect of the execution of Injunction 1, to offer a remuneration offer that meets the requirements of the Law and the Decision for the current use of protected content on Google's services to entering parties who request it ;
  • for the execution of Injunction 2, to supplement this offer with the information provided for in Article L. 218-4 of the Intellectual Property Code. This information must include an estimate of the total revenues it generates in France by the display of protected content on its services, indicating the share of revenues generated by the publisher or the press agency at the origin of the request. offer of remuneration. This estimate should detail a number of income items detailed in this decision.  

Finally, to ensure the effective execution of the injunctions referred to in the previous paragraph, the Authority has attached them to a fine of 300,000 euros per day of delay at the end of the two-month period starting from the date of the delay. formal request to reopen negotiations made, if necessary, by each of the seizors. Thus, this penalty will be assessed separately for each negotiation process that would be reopened by each of the seizors, after notification of this decision. Google will also have to justify compliance with this decision in the context of the monthly monitoring reports sent in application of Injunction 7. In the event of non-compliance with the two-month time limit, Google is therefore exposed to penalties of up to 900,000 euros per day of delay.

The Authority recalls that Google remains bound to respect the Injunctions as validated by the Paris Court of Appeal in its judgment of October 8, 2020 until the publication by the Authority of the decision on the merits. Compliance with Injunctions thus remains subject to control by the Competition Authority, which may be re-referred by any publisher or press agency in accordance with Article L. 464-3 of the Commercial Code, until the date to which the Authority will render its decision on the merits.

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