Digital News Aggregators, Media Plurality and the Right to Information
The advent of the digital economy has brought many challenges to traditional business models, leading to new issues that go beyond pure market problems. This is also true for the news media industry since the emergence and rapid expansion of digital platforms like Google and Facebook. While the latter, in contrast to press publishers, do not produce any news content themselves, they have become digital news aggregators and first contact points for readers of online news. Consequently, the actions of those digital news aggregators influence what people read, increasing the risk of echo chambers and filter bubbles. Moreover, they raise new challenges for traditional newsrooms due to their market power. There is a disparity in the relationship between press publishers and news aggregators which has allowed the latter to free ride on press publishers’ content. As more and more newspapers (particularly regional ones) disappear, media pluralism and individuals’ right to information are at risk. While it was hoped that EU copyright law would address this imbalance, experiences of similar rights and their application in different Member States and in Australia, highlight a need for other policy options to address the imbalance in the relationship between press publishers and news aggregators.
In this post, we reflect on the existing approaches towards addressing the bargaining imbalance between press publishers and digital news aggregators. We argue that the most adequate measure in addressing this imbalance would be a regulatory instrument such as a bargaining code.
Media Plurality and the Digital Single Market
Media pluralism is inextricably tied to democracy. It is a pillar of the right to information and freedom of expression enshrined in Article 11 of the Charter of Fundamental Rights of the EU. The idea behind media pluralism is that there shall be no one entity that can control the public debate. Instead, the media shall reflect the interests and needs of a heterogeneous society.
Media plurality is a complex and debated concept – there is no settled definition. Still, some key components can be identified: diversity of media outlets or sources, diversity of content, and the diversity of representation in media content, as well as diversity of programme types and demographic diversity (i.e. exposure diversity). Access to information, or more specifically access to journalistic news, is more accessible the more diverse news outlets and content there are.
The digital economy has both positive and negative implications for media plurality. Digital platforms allow for greater accessibility to diverse information and more opportunities (para 52). While one might expect press publishers to thrive in such a situation, the reality is quite different.
The Difficult Relationship between Press Publishers and Digital News Aggregators
Press publishers and digital platforms are imbricated in complex relationship. On the one hand, both news aggregators and press publishers benefit from each other. The former benefit by making their platforms more attractive to their users, while press publishers benefit by gaining access to a wider readership. The exposure on digital platforms also leads to advertising revenue for press publishers. However, news aggregators do not depend on press publishers to the same extent as the latter depend on news aggregators who have become essential commercial partners for press publishers. For them news content is simply one more feature of a ‘one-stop shop’ for their users. The press publishers’ dependence allows news aggregators to use press publishers’ content without fair compensation (p. 44). This renders the business relationship between news aggregators and press publishers unsustainable since the latter lack the incentive (p. 140), and eventually the means (p. 78), to produce original content.
The Limited Potential of Copyright Law
The EU legislator considered the inability of press publishers to recoup their investments to ultimately threaten the ‘free and pluralist press’ necessary for a democratic society and the right to access information (para 54). This situation warranted a regulatory response in the form of Article 15 of the Directive on Copyright and Related Rights in the Digital Single Market (CDSM). This provision enshrines the press publishers’ right over publications, giving them the exclusive power to authorise the commercial use of their published content by information society service providers (ISSPs), including digital news aggregators. This provision does not require licensing for acts of hyperlinking, as clarified in the third sentence of Article 15(1) CDSM, but does in the case of the usage of short excerpts, or ‘snippets’, of the press publishers’ content, as extracts of written work are protected under EU copyright law (paras 48-51).
While Article 15 CDSM formally establishes the entitlement of press publishers over their published content, this has proven insufficient to achieve the EU legislator’s intent to ensure the ‘sustainability of the publishing industry’ and to ensure the availability of information (para 55). First, there are some uncertainties concerning its scope and application (p. 664 ff). Second, Member States have implemented Article 15 CDSM in different ways, potentially leading to a fragmented approach across the EU. In Spain, for instance, the lack of procedural specifications about the licensing process resulted in the legislature going further than the text of Article 15 CDSM, establishing how the licensing is to be granted and what requirements a licence must meet. In France, the transposition of Article 15 CDSM grants press publishers a right to remuneration (p. 1326), thus going beyond the text of the Directive, which merely foresees an exclusive right to reproduction and publication. Nonetheless, those national transpositions of Article 15 CDSM did not prevent Google from imposing its zero-remuneration policy on press publishers.
These national experiences show that the press publishers’ right is insufficient by itself to ensure that press publishers can protect their content-creation investments. Since the Directive does not set out any substantive or procedural requirements (p. 655) concerning the process of negotiating licenses and remuneration, the imbalance of the bargaining position between press publishers and news aggregators remains. Therefore, it is important to find a way that either makes the press publishers’ right a credible tool that can be used against news aggregators or that otherwise addresses the enormous bargaining imbalance vis-à -vis news aggregators.
Competition Law As a Potential Solution?
In this respect, competition law has emerged as a potential solution. Although the ‘substantial bargaining power’ that news aggregators have does not, as such, result in a finding of ‘market power’, the two concepts are clearly connected. It is this bargaining power that puts news aggregators in control over the terms of content distribution and allows them to get away with free riding. Seen in such light, Article 102 TFEU, especially the prohibition on ‘unfair trading practices’ (pp. 1324-1325) appears as a potential avenue for press publishers to seek redress.
This is what the Syndicat des Éditeurs de la Presse Magazine, the Alliance de la Presse d’Information Générale and others, and Agence France-Presse claimed in their complaint against Google. The French competition authority (Autorité de la Concurrence) found that by refusing to negotiate about the remuneration of using the press publishers’ content and insisting on its zero-remuneration policy, Google had imposed unfair trading conditions contrary to Article L. 420-2 of the French Commercial Code and Article 102(2)(a) TFEU. Eventually the Autorité accepted Google’s commitments to, inter alia, negotiate in good faith with press publishers concerning remuneration policies. The commitments strongly resemble the obligations in the Australian News Media Bargaining Code described below. Following Google’s commitments, the press publishers in France will be able to negotiate fair remuneration that fulfils the purpose of Article 15 CDSM.
Despite the promising outlook of applying competition law to give effect to the intention behind Article 15 CDSM (or intellectual property law in general), competition law also has its shortcomings. First, the news aggregator in question must be shown to possess market power amounting to a dominant position. And even if the existence of a dominant position can be proven, establishing the abuse of such a position is not always straightforward, particularly not in cases dealing with digital platforms. In addition, competition authorities and courts have only limited experience with cases concerning unfair trading practices. Lastly, cases dealing with the abuse of dominance typically involve lengthy proceedings. By the time a competition authority makes a decision, some small press publishers might have already gone bankrupt.
The Role of Regulation
(Sectoral) regulation that governs the relationship between news aggregators and press publishers is a third policy option to ensure a sustainable relationship between the two. The most relevant example in this respect is the Australian News Media Bargaining Code (NMBC), which was adopted in 2021 to ‘help support the sustainability of public interest journalism.’ The NMBC gives certain protections to press publishers which fall within its scope in relation to the negotiation of remuneration for the use of content by a digital platform.
Moreover, designated digital platforms are subject to ex ante obligations under the NMBC. Two main measures can be useful in counterbalancing the disparity in bargaining power. Firstly, the NMBC provides that, where there is no agreement during the negotiation, an arbitrator is to decide (pp. 138-140) which of the offers presented by the parties is more reasonable, considering the costs and benefits of both parties in the production and distribution of news content. Secondly, the NMBC also allows for collective bargaining, giving press publishers, particularly smaller ones, more bargaining power compared to when they negotiate individually with digital platforms. However, it is too early to tell whether this has improved the fair compensation of press publishers and whether small press publishers are adequately protected.
Although they do not directly relate to the relationship between news aggregators and press publishers, like the NMBC, the EU’s Digital Market Act (DMA) imposes various ex ante obligations on digital platforms that function as gatekeepers. The NMBC and the DMA have in common that the obligations imposed on very large digital platforms are predicated on their market power. In that respect, those two acts constitute a hybrid between regulation and competition law. While the NMBC designates platforms ex ante, they automatically fall within the scope of the regulation when they exceed a certain threshold (e.g. market share, turnover, or active users) under the DMA. This dispenses with the difficulty of having to establish market power. Moreover, once a platform falls under the scope of the relevant regulatory measure, it is subject to certain ex ante obligations. The advantage of those obligations is that there is no need to establish any wrongdoing by the platform.
Conclusion
Digital news aggregators are not bad per se for the news media industry, nor for online news readers. News aggregators give press publishers visibility on the internet and provide users with access to diverse news content. Yet, this benefit in terms of media plurality and individuals’ right to information is at risk due to the substantial bargaining power of digital news aggregators vis-á-vis press publishers. In recent years, we have seen some developments at the legislative and enforcement levels to ensure a sustainable relationship between press publishers and digital news aggregators. The foundation was laid with the enactment of Article 15 CDSM, which guarantees press publishers a related right over their publications. The prospect of adequate remuneration provides press publishers with the incentive to produce quality news content.
Yet, the superior bargaining position enables large digital news aggregators to impose a zero-remuneration policy on press publishers, thus defeating the purpose of Article 15 CDSM. If zero remuneration amounts to an unfair trading condition, then Article 102(a) TFEU may prohibit such practice. Thus, competition law can complement copyright law. Nonetheless, Article 102 TFEU, due to uncertainties relating to market definition and establishing abuses, as well as the lengthy proceedings, may be insufficient to ‘enforce’ Article 15 CDSM effectively. In that regard, sectoral regulation at EU level, e.g. in the form of a bargaining code, directly enforceable with rights and obligations for designated press publishers (or types thereof) and digital platforms, might be the best policy response. However, it needs to address the issues of fair compensation to counterbalance the bargaining power of news aggregators without depriving press publishers of the possibility to broaden their readership.