European Governments Seek to Tax Search Engines Under Copyright Law

Various governments in the European Union have enacted copyright laws intended to restrict search engines, such as Google, from displaying links to news organizations’ content, alleging that it constitutes copyright infringement.

In 2013, Germany was the first to enact such a law, the Leistungsschutzrecht für Presseverleger, alleging that the search engines benefitted from the free use of news organizations’ content. The final version of the law, however, did not require search engines to pay for using ‘snippets’ of content. Several media groups filed suit against Google, contending that it should be required to pay.

Google responded to the lawsuit by refusing to display the content of the media groups involved in the lawsuit. This action apparently led to disastrous consequences for the media groups resulting in a dramatic decrease in web traffic to those news outlets’ sites. Apparently, Google’s strategy worked, as the complaining news outlets reconsidered and granted Google “consent” to use their snippets without compensation, due to the “overwhelming market power of Google”.

A year later, Spain enacted similar legislation, known as the “Google tax,” which requires search engine aggregators to pay a monthly fee to the organization representing Spanish newspapers, the Association of Editors of Spanish Dailies, or face a fine up to 600,000 Euros. Spain’s legislation reaches further than Germany’s, however, subjecting any website to the fine regardless of whether they profit from the links to the news organizations’ content.

The news organizations contend that the search engines profit from their content without actually doing any news gathering. Google, on the other hand, counters that it brings millions of visitors to the news websites. The German reaction after Google removed the content seems to bear out Google’s position.  Ultimately, Google opted to shutter its Google News outlet in Spain prior to the January 1, 2015, enforcement date of the legislation.

Weighing in on the matter is incoming European Union Digital Commissioner, Günther Oettinger, who has recently said that an EU-wide tax on Google and other similar companies, similar to that enacted in Germany, is definitely on the table.  This news comes on the heels of the EU Parliament voting, in an antitrust action, to effectively break up Google, dividing the monolith into a search engine entity and the remainder of its products, after a finding that Google favored its own products in its search engine results. The vote is a paper tiger, in that it has no effect. However, most believe that Parliament was sending a signal to the European Commission, which does have that power. The United States has opposed such a move.

The EU’s rationale became clear as Oettinger indicated that the ultimate goal is to create a single digital market across the Union in order to create a level playing field. Oettinger said, “if they are playing in our European market then we have some instruments to come to a guarantee that they are acting on the basis of our rules.” A decision as to how the EU will proceed is expected by May of 2015.

If you have questions about copyright laws, you need an experienced attorney.  Anna Vradenburgh is a well-respected, business-minded expert in intellectual property issues.  Anna assists clients in patent and trademark prosecution, and represents clients in trademark opposition matters, domain name dispute matters, and patent and trademark litigation.  Anna can also assist your company in all manner of intellectual property protection.  For more information, visit her website, or contact Anna at (818) 488-8146.  This article is for educational purposes only and nothing in this article is intended to be, nor should be considered legal advice.

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