EU’s plan to tax internet


When you search on Google– say on the latest news– and you click one or two links that Google lists in response to your search, do you feel that Google should be made to pay the sources that it lists for you?  A so-called ‘snippet tax’ or link tax?

The reason for my question is that several major EU member countries, notably Belgium, Germany, Spain and Austria, do believe Google should be made to pay and now  – yes, you’ve guessed it – the EU is on the case.

Most people who have even a passing familiarity with the way the internet works and of the positive effect of Google in linking to their site and sending traffic to them will find the idea of a snippet tax ludicrous and baffling.  Why on earth should a newspaper or magazine object to having traffic sent to its site?

The answer is that some long-established print media have not yet managed to adapt to the internet age and have so far failed to work out any way of monetising their web site. They see that news aggregators like Google and Bing are making money and want a slice of it themselves. So they have gone down the ‘let’s lobby for copyright licensing’ route.

The trouble is, the results so far have been disastrous for everyone who has tried it.

News providers in Belgium complained that their content was being aggregated by Google News and that this infringed their copyright. They took their complaints to law and the courts ordered Google to remove their publications from Google News. As a result, the traffic to the newspapers’ sites plummeted overnight and their publishers then began complaining that they were being excluded. They begged Google to include them in its index again, which Google duly did.

German publishers have been agitating for some years to make Google and other aggregators pay under the heading of ‘ancillary copyright’, by protecting ‘snippets’ under German copyright law. The Copyright Arbitration Board of the German Patent and Trade Mark Office (DPMA) tried to settle the dispute by recommending that snippets must comprise exactly seven words – anything longer and  the aggregator would in theory have to pay to be licensed by news publishers.

Again, Google and other search engines responded by dropping snippets completely from their German search results which in turn led to a sharp drop in traffic back to the news sites. The publishers quickly realized they had shot themselves in the foot and granted Google (but only Google) a free license.

All this was watched closely by the Spanish Parliament because shortly after they, too, thought they could make a little money out of Google by taxing snippets, and passed a copyright law demanding payment for snippets and linking. The Spanish law went much further than either Belgium or Germany. It recognized an ‘inalienable right’ of copyright owners to be paid and this may well make it illegal for people to put their work on the net free of copyright under Creative Commons licenses.

More importantly, Spanish law made it mandatory for search engines to pay publishers for the snippets they aggregated. Google’s response was simple. They closed down Google News in Spain completely.

Mike Masnik describes what happened next:

After the law went into effect, the Spanish Association of Publishers of Periodical Publications (AEEPP) commissioned an economic study about the impact of the new Spanish ancillary copyright law — and found (not surprisingly) that the legal change (and the shuttering of Google News and other aggregators) was absolutely harmful to the Spanish news media and innovation in general. It also found strong evidence that, contrary to what those fighting against Google News have claimed, aggregators expand the market for the original sources, rather than shrink it by acting as a substitute.

The most damning part of the report points out that it wasn’t just Google News that shut down because of this law: local Spanish aggregators shut down themselves, switched business models, or left the Spanish market entirely. Sites like Planeta Ludico, NiagaRank, InfoAliment and Multifriki shut down as they were intimidated by the financial and legal liability they might incur under the new law.

After the debacles in Germany and Spain, the Austrian government – which had previously been keen to follow Germany – has backed away from the idea. The Austrian Minister for Justice has now distanced himself from the whole concept of  ‘Ancillary Copyright’.

It is highly probable that efforts like those of Belgium, Germany, and Spain will in any case fail under international law. Copyright is governed internationally by the Berne Convention.  The law contains a mandatory right to quotation.  It used to say it was permissible to make ‘short quotations’, leaving it open to debate how short was short. But in 1967, the Berne Convention was revised to drop the word ‘short’ and now says that it is permissible to make ‘quotations’. The Berne Convention is incorporated in the World Trade Organisation’s TRIPS agreement, so that violating Berne is a trade treaty violation that can be sanctioned by the WTO.

Predictably, small details like this haven’t yet sunk in at Brussels, where the unelected European Commission likes nothing better than to tinker around with copyright law to make itself feel important.

First there was the disastrously undemocratic attempts by the EU Commission  to sneak in its Anti-Counterfeiting Trade Agreement (ACTA) on behalf of its friends in big business. This could have imposed criminal sanctions on Google and others but fortunately was stopped in the nick of time by a Europe-wide revolt.  The full story is here.

Now the EU is back again, sniffing around Google and trying to work out a way of taxing it, Europe-wide, and will shortly be making a decision. It has gone through the motions of consulting interested parties with an online survey but this was only up for three months and with virtually no publicity so that Commissioners don’t have to trouble themselves wading through too many objections.

So, if you think copyright is important but also believe – as the Spanish study showed – that having information aggregated so we all have access to it is equally important, oppose this move by the EU. How can you do that?  There is only one way – to leave the EU, so that its laws no longer take precedence over the laws of the United Kingdom as they do at present.

My thanks to Mike Masnik for following this depressingly long series of cock-ups and for bringing it to public attention through his superb blog, Techdirt. Read more here. from OpenMedia has a simple signup form that just adds your name to a letter.

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