Midweek Mix: Google Blinks?

Plus: tech companies facing mounting pressure over safe harbors

Google has so far taken a hard line against the so-called link tax included in the EU Copyright Directive (it’s not a tax and it doesn’t apply to links, but whatev). In France, the only EU country so far to enact implementing legislation, Google flat-out refused to pay publishers for the right to display snippets of news stories in search results. Instead, the tech giant demanded publishers grant it a perpetual, no-cost license to display the snippets, or see their presence in search results reduced to a mere headline and link, likely undercutting publishers’ traffic considerably.

That brought howls of protest, as well as litigation from French publishers. It also brought a vow to impose sanctions on Google from French president Emmanuel Macron and a demand that the EU create a new tech regulator to oversee companies’ compliance with the new directive.

The EU’s competition commissioner, Margrethe Vestager, also weighed in with a threat of a probe into Google.

In the face of that pressure, Google has so far been fighting a lonely battle. Both Facebook and Apple have agreed to pay publishers to include the publishers’ content in their news aggregation apps.

News Corp., the parent company of the Wall Street Journal and Dow Jones, recently brought together 400 national and local news sources for the launch of its own news aggregation site Knewz.com.

In the face of that combined legal, regulatory and competitive pressure, the Wall Street Journal now reports, Google may have blinked. According to the Journal’s report, Google is in talks with leading news organizations in France and elsewhere in the EU about licensing their content on a paid basis after all.

Details remain sketchy. It is not clear that whatever Google is talking about with publishers would bring it into compliance with the Copyright Directive.

Indications are that it is discussing licensing content from selected publishers to use in a new paid subscription app to rival Apple’s Apple News + service, rather than a general commitment to pay for content to display in search results — a point Google itself seemed obliquely to acknowledge in a statement issued in response to the Journal report.

“We want to help people find quality journalism—it’s important to informed democracy and helps support a sustainable news industry,” the statement said. “We care deeply about this and are talking with partners and looking at more ways to expand our ongoing work with publishers, building on programmes like our Google News Initiative.”

I may be a cynic, but this feels more like of a chess move than a capitulation by Google. From Google’s perspective, better to shell out a few million euros to some high-profile publishers if that buys it some breathing room than to retool its entire approach to search to comply with the Copyright Directive.

Circumventing Safe Harbors, Part II

We’ve noted here before a new tactic by the Recording Industry Association of America (RIAA) in the copyright industries’ long-running fight against what they consider online piracy.

Late last year, the RIAA sent a series of take-down notices targeting several stream-ripping sites. Rather than invoking the notice-and-takedown procedure spelled out in the Digital Millennium Copyright Act, however, the notices cited Section 1201 of the act, which makes it a crime to circumvent “technical protection measures” (TPMs) that control access to copyrighted works, or to “traffic” in technology or devices designed to circumvent TPMs.

“To our knowledge, the URLs provide access to a service (and/or software) that circumvents YouTube’s rolling cipher, a technical protection measure, that protects our members’ works on YouTube from unauthorized copying/downloading,” the notices said.

The DMCA was enacted to give force in the U.S. to the WIPO Copyright Treaties. The multi-lateral agreements provide online platforms like YouTube with a safe harbor from liability for copyright infringement by their users, so long as the platforms promptly remove infringing content once notified of it by a rights owner.

Rights owners have long complained that that notice-and-takedown procedure, spelled out in Section 512 of the DMCA, quickly devolved into nothing but a game of Whac-a-Mole in which infringing content is removed only to be quickly re-posted.

The anti-circumvention provisions, however, as spelled out in Section 1201, provide for no such safe harbor. Under the DMCA, circumvention or trafficking in circumvention technology is a crime, full stop.

The RIAA’s new tactic of relying on Section 1201 in place of 512 to squelch infringing activity now seems to be catching on. Shortly after the RIAA sent its notices, its counterpart in the UK, the British Phonographic Industry (BPI) sent similar notices targeting the same stream-ripping sites targeted by RIAA.

Whether rights owners will have any better luck invoking the anti-circumvention rules than the notice-and-takedown procedure is another question. The sites targeted by RIAA/BPI remain accessible today, more than two months after the first notices went out.

But as we noted in December, rights owners have had much greater success getting courts to enforce the anti-circumvention rules than getting judges to narrow the safe harbors. It’s possible the 1201 notices are simply a predicate for eventual litigation that could lead to a better outcome for rights owners than their track record in 512 cases.

Watch this space.

Short Cuts

Tapped out

As a first mover, Netflix gained more than most streaming services from the growth of cord-cutting in the U.S. But according to MoffettNathanson, who usually know what they’re talking about, that vein has mostly been tapped out. “Our research shows that most pay TV households already have Netflix so even if cord-cutting accelerates, Netflix won’t get a whole slew of new customers,” a new report from the analysts predicts. “In [other] words, people are cutting the cord because they have Netflix. They don’t cut the cord and discover Netflix for the first time.”

Corona chaos

The Coronavirus is taking an increasingly economic toll. The Hollywood studios are restricting employee travel in Asia and are ratcheting down box office projections as fear of contagion keep people out of theaters. Meanwhile, Apple warned Wall Street this week that it will miss if Q1 numbers due to a slowdown in iPhone production at Chinese plants as workers stay away from work.

Barring section 230

The battle over the future of Section 230 of the Communications Decency Act, which shields tech companies from liability for potentially defamatory and other problematic content posted by users, reached new heights this week as Attorney General William Barr threatened government action to weaken tech company’s legal protections. Of course, Barr is also reportedly threatening to resign over President Trump’s mean tweets about the judge and jury in the Roger Stone case. So take his threats for what they’re worth.