Dr. Andreas Leupold LL. M. (UT)
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Dr. Andreas Leupold LL. M. (UT)
German Lawyer / Business Mediator
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German publishers reconsider position on use of snippets

January 12, 2015

The recent announcement from Germany’s largest news publisher Axel Springer that it is discontinuing its efforts to stop Google from running snippets of its newspaper articles, citing significant falls in site traffic, has thrown a spotlight once more on the dispute over search engine snippets in Germany. The battle began in 2013 with the introduction of a new ancillary right for publishers by the German legislator, granting the producer of a press product the exclusive right to make the press product or parts thereof available to the public for commercial purposes, unless this pertains to individual words or ‘the smallest of text excerpts.’ Dr. Andreas Leupold of Leupold Legal discusses the background to this dispute and what the future may now hold.

It was not a good year for the German newspaper and magazine industry, which is facing a continuing decline in revenues from its core business, i.e. print media. While 661 newspapers have their own internet presence now1, all of them are still struggling to find new compensation models for their online content that are convincing enough to make consumers give up their expectation that everything available on the web must be free of charge. Against this background, major German publishers came up with a different approach and recently sued Google for showing small text excerpts (‘snippets’) and pictures (‘thumbnails’) from their newspapers in its search results, as they considered this as being an infringement of their exclusive right of use. This dispute raises the question as to whether other providers of search engines - regardless of where they are based - must be prepared for exposing themselves to damage claims from German publishers if they continue to show snippets or thumbnails of newspaper articles in their search results. To answer this question, a healthy dose of some background knowledge regarding the German publishing sector’s war against snippets can be helpful with respect to where it currently stands and what the likely outcome will be.

Act one: The introduction of a new ancillary right for publishers by the German legislator

The root of the current discussion on the permissibility of search engine snippets can be found in the recent introduction of a new ancillary right for publishers by the German legislator in August 2013. As Article 87f of the German Copyright Act currently provides, the producer of a press product (press publisher) shall have the exclusive right to make the press product or parts thereof available to the public for commercial purposes, unless this pertains to individual words or ‘the smallest of text excerpts.’

Act two: Failing efforts to enforce the publisher’s right

When the new right was passed by the German Parliament and entered into force in the summer of 2013, the collecting society VG Media, which currently represents 138 publishers in the enforcement of their newly acquired right, demanded that Google pay a fee for each snippet of a newspaper article in its search results. And then the unthinkable happened: Google not only refused to make any such payment but simply decided to limit its search results from newspapers to the headlines of the newspaper articles that originated from any publisher that sought to enforce its ancillary right in such content. This was not well received by major publishers such as Axel Springer who had fought so long for their ancillary right only to see Google escape its payment obligations by stopping any use of their content that exceeds ‘the smallest of text excerpts.’ The consequences were disastrous as the publishers soon realised that their content could no longer be found on the web, if search engines stopped showing the snippets. Traffic on the newspaper sites quickly plummeted to an all-time low and so did advertising revenues. The effects were so drastic that the publishers asked VG Media to grant Google a revocable licence to use snippets of their content in search results free of charge. VG Media reluctantly followed this request but complained, accusing Google of blackmailing the right owners2.

Act three: Who’s afraid of Google?

Axel Springer’s CEO Mathias Döpfner then wrote an open letter to Google’s Eric Schmidt, in which he claimed to be afraid of Google and likened the dispute between Google and Springer to the fight between David and Goliath. Döpfner opined that the statement ‘if you don’t like Google, you can remove yourself from their listings and go elsewhere’ is about as realistic as recommending to an opponent of nuclear power that he just stop using electricity and join the Amish3. After all, Google has acquired an unprecedented market share of 93% in Germany, so surely no serious newspaper can abstain from having itself listed by this mother of all search engines.
This charge of an abuse of Google’s market power to the financial detriment of publishers was soon rejected by Google’s Managing Director in Germany, Phillip Justus, who pointed out that Google directs more than half a billion clicks to German news sites every month and that the Newspaper Association of America estimated the net worth of every single click to range between 12 and 16 cent4. But the discussion didn’t stop there. The Head of Germany’s Federal Cartel Office, Andreas Mundt, pointed out that antitrust laws do not require search engine providers who own a significant market share to purchase text excerpts from the publishers, so they are free to limit their search results to news headlines as long as they do not unlist single publishers entirely5.

The death toll for the new ancillary right of publishers eventually started to ring even louder when prominent copyright scholars criticised it as “half-baked, pursy and lobby driven” in an expert hearing held in the German parliament on 3 December 2014

Act four: Increasing pressure on the German lawmaker to abolish the publishers’ ancillary right

The death toll for the new ancillary right of publishers eventually started to ring even louder when prominent copyright scholars criticised it as “half-baked, pursy and lobby driven” in an expert hearing held in the German parliament on 3 December 2014, pleading for abolishing it altogether6. By that time, the Left Party and the Green Party had already submitted a draft act for the annulment of the law that had introduced the ancillary right little longer than a year ago, arguing that publishers only profit from the search engine results as they significantly increase the traffic on their websites and create the chance for increased profits7.

Act five: Breaking up Google anyone?

While the move for abolishing the new ancillary right gained momentum, the publishers, however, did not give up so quickly but demanded that Google be broken up to tame its market power. And sure enough, blogs and papers soon buzzed with the news that the European Parliament allegedly had voted to break up Google8 although the European Parliament in its resolution on supporting consumer rights in the digital single market of 24 November 2014 had only called on the EU Commission to consider proposals with the aim of unbundling search engines from other commercial services as one potential long term solution to achieve certain aims in its resolution9. As Mark Twain may have said, the reports about Google’s break-up consequently were an exaggeration10.

Act six: The road ahead

What the future holds for Google and other search engine providers and commercial bloggers cannot yet be predicted in a conclusive way but it is more likely than not that the ancillary right of publishers will end up as one of the most short-lived additions to the German Copyright Act ever. VG Media’s action against Google is still pending before the arbitration board of the German Patent and Trademark Office (‘DPMA’). While anything can still happen, some commentators discussing the Copyright Act have already taken the view that snippets are the result of a common use of newspaper articles and do not fall within the scope of Article 87f of the German Copyright Act as they are necessary for understanding the search results effortlessly and quickly11. And even if the ancillary right of the publishers is not abolished altogether, it is entirely possible that German courts will consider snippets as ‘the smallest of text excerpts’ to which the publishers’ ancillary right does not extend in the first place. In the end, the furious dispute about the unauthorised and unpaid use of newspaper content by search engines may turn out as much ado about nothing and that may well be the final act of this drama.

1. See http://www.bdzv.de/fileadmin/bdzv_hauptseite/markttrends_daten/wirtschaftliche_lage/2014/assets/ZDF_2014.pdf (in German)
2. http://www.vg-media.de/images/stories/pdfs/presse/2014/141001_pm_vg-media_google.pdf
3. https://www.axelspringer.de/dl/433625/LetterMathiasDoepfnerEricSchmidt.pdf
4. http://google-produkte.blogspot.de/2014/10/news-zu-news-bei-google.html
5. See http://www.zeit.de/digital/internet/2014-10/kartellamt-google-vg-media-leistungsschutzrecht
6.
http://www.bundestag.de/mediathek/?action=search&contentArea=details&offsetStart=0&id=4178895&instance=m187&categorie=Ausschusssitzungen&mask=search
7. The draft revision act can be downloaded at http://dip21.bundestag.de/dip21/btd/18/032/1803269.pdf
8. See e.g. http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/digital-media/11257834/EU-Parliament-approves-motion-for-Google-break-up-Parliament-approves-Google-break-up-motion.html
9. http://www.europarl.europa.eu/sides/getDoc.do?type=MOTION&reference=B8-2014-0286&language=EN
10. See http://en.wikiquote.org/wiki/Mark_Twain
11. Graef in: BeckOK UrhG, § 87f marg. note no. 21; similarly Spindler, in his comment on the draft of the seventh law for changing the Copyright Act, 2013 p. 6,
http://www.bundestag.de/blob/343490/c9b809acc26911bfa94345793b1c830c/stellungnahme_prof_spindler-data.pdf

First published in E-Commerce Law & Policy (http://www.e-comlaw.com/e-commerce-law-and-policy).

 

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