When ancillary copyright law was passed by German parliament in 2013, it was meant to give the media more control of its published work. But many in the industry say that hasn't been the case thus far.
Google News, the news aggregation arm of the world's leading search engine, displays a small sample of articles, called "news snippets," on its landing page. Publishers insist they should also have copyright on news snippets, as many readers skim through the blurbs, without ever clicking on the link to go to the article itself.
According to the law, search engines are supposed to sign licensing agreements with media companies in order to display those snippets. But Google and others appear to be dragging their feet.
"So far, Google has not submitted a proposal for the payment of suitable compensation for the use of digital press products," said Markus Runde, managing director of Verwertungsgesellschaft (VG) Media, an umbrella organization for a large number of media houses such as Axel Springer, Funke Mediengruppe and also the Handelsblatt publishing group. "Google has decided not to react to the law at all for now."
According to Mr. Runde, the American technology giant has not changed how it displays press products since 2013, nor has it offered any compensation for their use. He said bureaucracy has helped the company, which would only accept VG Media's complaints through its massive California headquarters and not local offices in Hamburg. But on Tuesday the umbrella media organization is to take Google to court in Berlin.
Google is taking its time and is hoping to run out the clock on the issue. Markus Runde, VG Media managing director
The hearing will be the first legal proceedings on the enforcement of the ancillary copyright law. The Berlin district court must determine whether the American tech company is using content within the law's meaning. If so, it could be liable for damages. VG Media also plans to sue Yahoo for the actions of its Bing search engine. The Google case would set a clear precedent, with the company owning about 75 percent of the search engine market in Europe, according to Net Applications, a California-based market researcher.
Mr. Runde said Google's sheer size and financial clout has kept legal actions against it at bay. "Google is taking its time and is hoping to run out the clock on the issue," he said.
It could take years until a final court decision is reached. Mr. Runde's theory is that shortly before the ruling, Google will move to reach a high confidential settlement with "hungry rights holders." In the end, the company will not only pay less for the content, but also avoid the constraints of a strict agreement or judgment. Mr. Runde pointed to the seven-year long conflict between music rights organization GEMA and YouTube, Google's subsidiary.
Google is unperturbed by the case. From the company's point of view, publishers should be satisfied with what it considers to be free advertising by news aggregators. "Publishers can decide for themselves whether and how their content is displayed on Google," said a company spokesman. "Snippets in Google's search and in Google News help users find their way around the web, direct them to publishers' sites and thereby create substantial added value for both small and large publishers."
VG Media wants to force Google to disclose its sales in Germany so that compensation for rights holders can be calculated and set by the court. The company is demanding 6 percent of Google sales from its search engine operations in Germany. VG Media has calculated that, for the last three-and-a-half years since the law was passed, this could translate into up to €1 billion in payments to German publishers.
Catrin Bialek is an editor covering companies and markets. To contact the author: [email protected]