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Tuesday, 9 May 2017

CJEU to rule on enforceability of German press publishers' right

Readers will remember that back in 2013 Germany adopted a new neighbouring right over news content and in favour of press publishers (Leistungsschutzrecht für Presseverlege, LSR).

The newly created sections 87f, 87g and 87h of the German Copyright Act provide for the exclusive right of press publishers to exploit their contents commercially for one year, thus preventing search engines and news aggregators from displaying excerpts from newspaper articles without paying a fee.

The rationale

The rationale underlying this legislative initiative was that of addressing declining revenues in the press publishing sector. 

Although this is not a new phenomenon (in some European countries newspaper circulation has been in decline since the 1950s, in parallel with the advent of television), since 2000 newspaper advertising sales in Europe have fallen across the board. This data is in line with what has also occurred in the US where, according to the Pew Research Center, from 2013 to 2014 newspapers’ annual overall revenues have fallen from approximately $46m to approximately $20m.

Some have indicated the internet, notably news aggregation services (ie aggregators of syndicated web content in one location, an example being Google News), as primarily responsible for this phenomenon. According to two studies by the Iowa University and ETH and Boston University respectively, not only are news aggregators unlikely to have complementary effects on the number of visits received by newspapers' homepages, but rather appear to have a substitution effect, which is said to have contributed to declining online traffic.

Options on the table

Possible solutions to tackle this phenomenon have been discussed in a number of EU Member States. These have resulted in either the conclusion of agreements between Google and local press publishers (Belgium, France, Italy) or the adoption of legislative initiatives in relation to news content (Germany, Spain). 

Currently also EU legislature is considering whether a neighbouring right for press publishers should be adopted at the EU level (Article 11 of draft directive on copyright in the Digital Single Market).

Today's reference

Going back to Germany, the latest development in relation to the neighbouring right in favour of press publishers is today's decision [text here] of the Landgericht Berlin to make a reference to the Court of Justice of the European Union (CJEU) in the context of litigation between the collecting society responsible to collect royalties in favour of publishers and Google, to receiving guidance on the actual enforceability of the German press publishers' right. Readers will also remember that the same day when the new provisions in the German Copyright Act entered into force, Google News also became opt-in in Germany.

The reason why the German right might not be enforceable after all is that Directive 98/34 requires Member States to notify the European Commission of any  “technical regulations” that they intend to adopt. This is to allow the Commission to assess their impact on the internal market.

Apparently German Government failed to notify the Commission because of impending elections in Germany.

Already in 2015 Bo Vesterdorf (former president of what is now the General Court) had argued that both the German and Spanish initiatives in favour of press publishers would be unenforceable because of their lack of notification to the European Commission. 

The Berlin court has now asked the CJEU to determine whether the rules adopted in Germany should be considered "technical" and, if so, what the effect of their missed notification is.

Comment

It will be very interesting to see what the CJEU says. It appears that the scope of the reference is quite narrow, ie such as NOT to require the EU court to address the actual lawfulness [which I argued against here] of the German initiative in favour of press publishers. In this sense, any serious impact on the current EU debate around the desirability of introducing an EU-wide press publishers' right might be also excluded.

This said, even if the questions referred were actually as narrow as it would appear, it is not completely excluded that the CJEU will refrain from touching upon issues other than those relating to the lack of notification ... That would not be the first time.

More to follow: stay tuned!

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