META Meta Platforms Inc

By Daniel Michaels and Sam Schechner 

BRUSSELS -- Australia's fight with Facebook Inc. over media content is focusing attention on European efforts to force tech giants to pay more for news, as European politicians urge national governments to quickly enact new legislation that would strengthen the hand of news organizations in their battle with internet behemoths.

European Union countries face a June deadline to adopt national versions of a bloc-wide law, dubbed the Copyright Directive, that aims to improve media producers' bargaining position against tech powerhouses including Facebook and Alphabet Inc.'s Google. Under the law, passed in 2019, news publishers can demand payment for reuse of their content.

Australia on Thursday passed a law that tackles many of the same issues, terms of which recently prompted Facebook to remove news from its platform in the country for five days before reversing course after winning some changes from the government.

Both laws stem from the same debate: what, if anything, should publishers be paid when their news is available via tech platforms.

Publishers argue that news is a significant attraction for services like Google, and that they should receive a share of the companies' revenue. The tech companies, and tech advocates, respond that they already boost the media companies' revenue by sending them tens of billions of website visits monthly, and that free linking is the internet's lifeblood.

Senior EU officials have said Facebook's move in Australia shows that tech platforms wield too much power against the press and other media. The episode shows that "we just cannot leave decisions, which have a huge impact on our democracies, to computer programs without any human supervision or to the board rooms in Silicon Valley," said European Commission President Ursula von der Leyen at the Munich Security Conference last week.

EU Industry Commissioner Thierry Breton on Monday urged member countries to quickly pass national versions of the copyright law to strengthen their news publishers' right to compensation from tech platforms.

"Google and Facebook are excellent at dividing publishers and playing them off against each other," said Axel Voss, a center-right German member of the European Parliament who oversaw the copyright law's adoption. Mr. Voss said Europe's new law allows news-content producers to unite in negotiating licensing revenues for their content -- and could even do so across borders within the EU.

Nick Clegg, Facebook's vice president of global affairs, said in a blog post Wednesday that the Australian law stems from a misunderstanding of its relationship with media companies, which choose to post their content on social media. Mr. Clegg acknowledged that the internet has disrupted the news business, and said the company plans to spend $1 billion in the next three years to support it.

"But a new settlement needs to be based on the facts of how value is derived from news online, not an upside-down portrayal of how news and information flows on the internet," he wrote.

News Corp, the parent of The Wall Street Journal, has a commercial agreement to supply news through Facebook.

"We have funded journalism for many years," said Google on its European Twitter account Monday. The company has said it provides 24 billion visits to publisher sites world-wide each month, and that it also has hundreds of partnerships with news publishers. Google has signed paid licensing deals with more than 500 publishers in over a dozen countries, including Germany, the U.K. and Australia, for a product called News Showcase.

The battle in Australia over payments to news media outlets is the latest example of a topic that has arisen globally for more than a decade.

In France, the only country that has implemented the new EU law, Google in November signed licensing agreements for News Showcase with several publications, including Le Monde. The agreements came after a French court reaffirmed an order from the country's antitrust regulator that Google must negotiate.

French publications had complained to the regulator after Google said it would display only headlines in news search results in France, as is permitted under the new copyright law, unless a publication granted rights to show longer excerpts for free.

Australia's legislation in some ways goes beyond that in Europe, by compelling tech companies and news publishers to submit to binding arbitration if they can't agree on payment terms.

Google also initially opposed the legislation, at one time threatening to shut down its search engine in Australia. Recently, though, it opted instead to sign content deals with a number of publishers -- including News Corp, which also owns newspapers in Australia.

News Corp has supported the Australian and EU laws.

Some European officials expressed solidarity with Australia.

"I really find it very damaging that a platform behaves this way to protest against the law of a country. We must support Australia in this fight," said Mr. Breton, who is French, on Monday. "The European solution is the Copyright Directive, which provides the press with a new right to obtain a more fair and equitable share of the profit," he said.

Some politicians and analysts say Facebook's hardball tactics could show Europe must get even tougher.

"Rules protecting national publishers must be broadened [because] the economic sustainability of numerous companies, thousands of jobs, and national and European digital sovereignty are at stake," said Federico Mollicone, an Italian member of parliament for Brothers of Italy, a leading opposition party.

Some legal analysts say Australia's new legislation, based on competition law, has sharper teeth than Europe's copyright law. Martin Kretschmer, a professor of intellectual property law at the University of Glasgow, said copyright law is the wrong tool to protect publishers because it shouldn't prevent news content from being linked to or quoted.

"To tackle this issue, you need to shift market power. Stronger interventions may be needed, such as competition law," said Mr. Kretschmer. "The Copyright Directive is already yesterday's law."

Mr. Voss said the law hasn't really been tested yet because only France has put it to use.

"We thought it would be enough" to protect publishers, Mr. Voss said, but if it doesn't prove sufficient, "we may have to sharpen this instrument."

Eric Sylvers in Milan contributed to this article.

Write to Daniel Michaels at daniel.michaels@wsj.com and Sam Schechner at sam.schechner@wsj.com

(END) Dow Jones Newswires

February 25, 2021 09:57 ET (14:57 GMT)

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