Last week, Spain followed Germany’s footsteps and passed a new copyright law called Intellectual Property Law (otherwise known as LPI or the ‘Google Tax’) effective January 2015. This new law would essentially require any aggregator such as Google to pay content owners for the ability to display snippets or quotations of content in search results. Failure to comply would result in steep fines up to about $758,000 per violation, presumably.
To make matters worse, it seems that there is new support for exporting the snippets law to all 28 European Union Member States. Recently, Gunther Oettinger, a German native and recently appointed European Union (EU) Digital Commissioner, announced his intentions to include this ‘Google tax’ concept as part of Europe’s existing copyright reform efforts. A spokesperson for his predecessor Neelie Kroes responded to this announcement by stating that the EU’s job is to focus on “market failures and enforc[ing] rules” rather than “target[ing] companies.” Oettinger reports to EU Vice President Andrus Ansip of Estonia, who is most influential on Internet-related matters and is likely to favor policies supportive of the digital landscape. From a political perspective, the verdict is still out as to how far this concept will go at the EU level.
Following Spain’s enactment of its snippets law, according to Hollywood Reporter, Google released a statement, “We are disappointed with the new law because we believe that services like Google News help publishers bring traffic to their sites.” If recent developments in Germany are any indication, Spain should take notice. In 2013, Germany was first to pass the ‘Google tax’ concept, formally known as ancillary copyright law. While some German publishers opted not to prevent Google from showing snippets of their content, others supporting the tax requirement experienced lost revenues due to a decrease in web traffic sans Google snippet displays of their content.
The ancillary copyright trend in European countries is concerning for a number of reasons, particularly since it contradicts international treaties and conventions which permit a right to quote and do not extend copyright to facts or news. Balanced copyright law is key to the continued development of Internet platforms.
The Internet industry supports copyright policies that protect content owners but also permit the public to make use of these works as well as create new content. Ancillary copyright policies present significant challenges to the Internet ecosystem and serve as a trade barrier, imposing increased compliance costs for existing market participants and will deter new market entrants. As the European Union seeks to bolster its digital economy, it should consider policies that promote rather than undermine the growth and development of innovative Internet services.