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Innovative Regulatory Tools Against the GAFAS: The French Competition Authority Requires “Fair Negotiations” Between Google and Press Publishers

Related Lawyers: Laurent Geelhand, Antoine Riquier
Related Practice Areas: Competition Disputes
Authors: By Laurent Geelhand and Antoine Riquier*

After the record fine of 1.1 billion euros against Apple,[1] the French Competition Authority continues to show a strong leadership in its fight against “Big Tech” -- Google, Apple, Facebook, and Amazon, the “GAFAs,” -- by imposing interim measures on Google, requiring it to enter into good faith negotiations with publishers and news agencies. These negotiations must deliver a fair remuneration to the news publishers for displaying their content on Google News and other Google services. This likely is not the end of a legal and judicial journey in France, but also in Europe and abroad, with respect to the issue of fair compensation of press publishers.

Summary

The decision against Google, rendered on 9 April 2020 by the Autorité de la concurrence, follows a claim lodged in November 2019 by two professional associations (SEPM and APIG - representing the vast majority of French press publishers) and news agency Agence France Presse.

According to the plaintiffs, the manner in which Google has been interpreting the French Act on Copyright and Neighbouring Rights of 24 July 2019 (the “Act”), implementing Directive 2019/790 of the European Parliament and of the Council of 17 April 2019 (the “Directive”), constitutes an abuse of a dominant position and an abuse of economic dependency. Whereas these new rules were supposed to create a framework for balanced negotiations between information aggregators and press publishers, Google did not make any room for discussions by presenting quite a simple choice, at least in appearance, for the publishers and news agencies: either to display their content for free or not to display it at all.

Strongly backed by the French government, which already drove a large part of the legislative process at the European Union level for the adoption of the Directive, the plaintiffs lodged a complaint before the French Competition Authority, asking for interim measures to force Google to enter into good faith negotiations with them.

In its decision of 9 April 2020 (the “Decision”), the Autorité granted the interim measures requested by the plaintiffs on the ground that Google’s behaviour constituted, prima facie, a breach of competition law creating a risk of serious and irreparable damage to competition. Google is now required, within 3 months from the date of the Decision, to enter into good faith negotiations with the press publishers and news agencies to discuss their remuneration for content displayed since the entry into force of the Act.

Factual, legal, and political background

Even though we are probably at a time when the potential audience for the press publishers and journalists has never been so large, the value they create is sometimes being captured by platforms, content aggregators, and other media monitoring services. Yet, the right allocation of the value created is the keystone to ensure “quality journalism and citizens' access to information,[2] and thus the democratic functioning of our society.

Conscious of these challenges and the disempowerment of the press in this new digital area, the European Union, driven by European governments with France in a leading position, started a legislative process in 2015 to adopt a legal framework seeking better protection. Four years later, on 17 April 2019, the Directive was adopted, leaving until 7 June 2021 for the EU Member States to implement its provisions.

France was unsurprisingly the first country to implement the Directive, [3] even by anticipation, as the first discussions to implement the Directive were already taking place in France in September 2018.

The new provisions of the French intellectual property code (“IPC”) transposing Article 15 of the Directive, now guarantee the rights of press publishers to authorize or prohibit the online use of their press publications by information society service providers. Moreover, Article L. 218-4 IPC also  provides guidelines to  ensure remuneration of the press publishers should they decide to authorize a third party to use and display their protected contents.  Specifically, such remuneration should be linked to the direct or indirect revenues made by the content’s aggregator (L. 218-4 §2 IPC). The compensation should also take into account human, material, and financial investments made by press publishers, the contribution of press publications to political and general information, and the importance of the use of press publications by online content-sharing services (L. 218-4 §2 IPC).

All these provisions entered into force in France on 24 October 2019, and should have created better conditions for the press publishers and news agencies, because prior to that date, Google and the other contents aggregators were able to freely use some part of the contents, by displaying snippets of text and images without having to pay any licenses to their creators.

Google’s position: all for free, or nothing

When the French law comes into force, we will no longer post an overview of the content in France for European news publishers, unless the publisher has taken steps to inform us of such a wish,[4] Google said back in September 2019. However, what this quote does not say is that Google wanted the ‘wish’ from publishers and news agencies to be… free of charge. In contrast, Google’s rival Qwant started to pay the press publishers and news agencies for using their contents as of April 2019.

From a copyright law perspective, Google’s choice can hardly be challenged: neither the Directive nor the national transposition prevents Google from requiring the news publishers to authorize it to display their contents for free.

It is not the first time in Europe that Google has tried to intimidate the press sector. Back in 2013, press publishers and the French legislator side by side tried to introduce new provisions into French law to force Google to pay for displaying their contents. After strong opposition, Google provided € 60 million to a fund helping publishers to develop their digital units.[5]

In Belgium the first litigation was initiated in 2006, when the group Copiepresse sued Google for violating copyright when using headlines and snippets on Google News without their authorization. Copiepresse eventually won before the Court of Appeal in 2011, leading Google to completely remove  Copiepresse from Google services. In 2012, the Belgian group came back on Google News, after an agreement was reached with Google.

Same story and an even more drastic solution in Spain in 2015. After the entry into force of the new Spanish law extending copyright protection for news publishers, and requiring content aggregators to pay for the contents they were compiling, Google simply shut down Google News in Spain.

Bearing in mind these unsuccessful attempts, and likely fearing that they would appear with a simple hyperlink on Google News, almost all French press publishers  granted full access to their contents for free in October 2019. According to Google, it represents more than 31.5% of the traffic for the press publishers’ websites, and up to 50% according to some publishers.[6] Those who have not expressly granted Google permission to use their contents for free have been kept on Google News, but as simple hyperlinks without snippets. Such display decreases by 50%[7] the chances for a link to be clicked on, and was therefore not an option for most of the press publishers and news agencies.

Google’s behaviour in  France opened a competition law perspective for plaintiffs to request the Autorité’s intervention. Unsuccessfully tried to date in a private litigation brought by VG Media in Germany, this competition law approach has finally paid off before the French Competition Authority.

Competition law instead of copyright law

Backed by Emmanuel Macron himself,[8] and confident about the Autorité’s ability to impose interim measures,[9] the plaintiffs took the matter to the French competition watchdog and hoped for emergency measures to be taken.

The French requirements to impose such measures are almost equivalent to the ones listed at Article 8 of Regulation 1/2003 allowing the European Commission to take interim measures, which it did recently for the first time in 18 years.[10] These requirements are as follows:

  1. There must be a prima facie infringement of competition rules; and
  2. There must be an urgent need for protective measures due to the risk of serious and immediate harm to the general economy, concerned sector, consumers interest, or to the complainant undertaking.

On the prima facie evidence of competition rules, the Autorité, after defining the relevant market as the “French market for online generic search,[11] first observed that Google is in a dominant position due to, inter alia, its approximately 93% market share.[12] Second, the Autorité found that because of its dominant position on the market, Google is prima facie able to:

  1. Impose unfair trading conditions on press publishers and news agencies by refusing all forms of negotiations with them, constituting an abuse prohibited by Article 102, §2, (a) of the Treaty on the Functioning of the European Union (“TFEU”);
  2. Impose a no remuneration principle to all publishers, without considering their respective situations, listed as a potential abuse of dominance under Article 102, §2, (c) TFEU;[13] and
  3. Circumvent the new Act by systematically refusing any remuneration to the press publishers, and by refusing to disclose the information required to determine their remuneration. Such circumvention has also been recognized at the EU level as potentially infringing article 102 TFUE.[14]

Besides these prima facie abuses of dominance, the Autorité found that there was an urgent need for protective measures due to the risk of serious[15] and immediate[16] harm, given the major crisis the press industry has been facing for a few years now, and how much this industry contributes to the proper functioning of a democratic society.

Consequently, the Autorité granted the interim measures requested by the plaintiffs by ordering Google to:

  1. Negotiate in good faith with publishers and news agencies upon their request, and whether or not represented in the proceedings before the Autorité, within 3 months from the publication of the Decision, the remuneration due for the use and display of their contents both going forward, and also back to the entry into force of the Act;
  2. Disclose to the publishers and news agencies the information allowing them to assess their remuneration;
  3. Maintain, during the negotiations period, the display of contents according to the methods chosen by the publisher or the news agency;
  4. Report on a monthly basis to the Autorité the application of these interim measures;
  5. Apply the interim measures until the decision on the merits.

Of interesting, the plaintiffs also used the recently rejuvenated French concept of abuse of “economic dependency.”[17] As noted by the Autorité,[18] Google’s dominant position makes any discussions on this potential infringement pointless at this stage of the proceedings. However, the Autorité will rule on it when deciding on the merits of the case.

What’s next?

Google can appeal the decision granting these interim measures before the Paris Court of Appeal, within 10 days after the publication of the decision. However, with the current Covid-19 situation, appeals against the decisions of the Autorité, which should have been filed in the period from 12 March 2020 until the expiration of a period of one month from the cessation of the state of health emergency, may be completed within two months of the end of this period. As the French legislator is in a process of extending the state of health emergency until 23 July 2020, we might not hear anything about Google’s appeal before the end of the summer.

Even if Google does not appeal the decision, it is very unlikely that we will see the outcome of the negotiations before the end of the summer, as time limits to implement interim measures are also suspended until the expiration of a period of one month from the end of the state of health emergency.

In the meantime, this decision provides some ideas to other competition authorities[19] and press publishers[20] around the world. In France, let’s hope, on behalf of consumers and businesses that the Autorité will continue to keep its digital-oriented promises made in February 2020.

Footnotes

[1] See The 2020 Apple Decision in France: A New Antitrust Era for GAFAs?, Hausfeld Perspectives, March 2020.

[2] Directive, recital 54.

[3] in comparison, consider the implementation of the ”Damages Directive” (Directive 2014/104/EU on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Uni) of 26 November 2014, which had to be transposed by 27 December 2016, implemented on… 9 March 2017.

[4] Decision §91.

[5] See e.g.: New York Times, 18 February 2013, French Publishers Forge Deal With Google, Breaking Ranks With Europe.

[6] Decision, §123.

[7] Decision, §122 and §123.

[8] During a Franco-German cabinet meeting in Toulouse in October 2019, the French president said “Certain firms like Google want to get around [the new law]. We will not let them, and we will firmly ask national and European competition authorities to consider and initiate all possible proceedings.

[9] The French Competition Authority imposed 9 interim measures since 2009.

[10] See Broadcom: The EC Adopts Interim Measures For The First Time Since 2001, Hausfeld Perspectives, July 2019.

[11] Decision, § 133-152.

[12] Decision, §160-164.

[13] And reaffirmed in CJEC, 17 July 1963, Italian Republic vs Commission, C-13/63.

[14] ECJ, 6 December 2012, AstraZeneca, C-457/10, §129-141.

[15] Decision, §273-278.

[16] Decision, §279-286.

[17] See The 2020 Apple Decision in France: A New Antitrust Era for GAFAs?, Hausfeld Perspectives, March 2020.

[18] Decision, §181.

[19] See Australia to force Google, Facebook to pay domestic media to use content, Reuters, 20 April 2020.

[20] See Jerry Dias: Why hasn't Canada taken on Facebook and Google to save journalism?, National Post, 4 May 2020.

*Laurent Geelhand is a managing partner in Brussels and Paris and a partner in London and Antoine Requier is an associate in London and Paris.

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