When technological change disrupts industries, they can respond in one of two ways. First, they can adapt to this change by delivering innovative new products, even if this means cannibalizing their older products. This shift of the mapping industry from producing printed street maps to providing data for GPS devices is a good example. This is not to say that individual companies necessarily survived the shift, but the industry as a whole—and consumers—are better off for having moved on from established business models to embrace new technological possibilities.
A second way that industries can respond to technological change is by suing those whom they see as responsible for disrupting their old business models, or by lobbying for new protectionist laws to prop them up in a quixotic attempt to hold back the technological tide. Examples of this second approach to change include the music industry's ill-fated war on peer-to-peer file sharing, and lobbying by taxi cartels for new laws to make it impossible for ride-sharing companies to compete with them.
Guess which of these options European news publishers have taken?
The “Google Tax”
We've reported before on how news publishers in Germany and Ireland have demanded that Google pay royalties for the reproduction of news snippets and image thumbnails next to search results in its Google News product. In France and Belgium publishers took this claim to the courts resulting in an eventual settlement from Google, whilst in Germany, lawmakers unwisely caved in and passed legislation in 2013 to grant the special copyright-like rights in news snippets that the publishers had demanded.
Illustrating how pointless this was, Google subsequently called the bluff of the German publishers, replacing their news snippets with simple hyperlinked headings rather than paying the royalties the publishers demanded, while the befuddled publishers watched their traffic stats drop away. In a humiliating backdown reported this week, the publishers have since gone back cap in hand to Google begging it to reindex their content, snippets and all.
Last week, Spain passed a similar amendment to its own copyright law, but with a nasty twist—not only are news aggregators prohibited from including news snippets without payment, but this right to payment is made inalienable. This means that aggregators are prohibited from negotiating with the publishers to waive the payment, as has occurred elsewhere in Europe. This would also seemingly frustrate the intent of any news publisher who released their work under a Creative Commons or other open license for royalty-free use.
The same new Spanish law (here in PDF) makes other adverse and short-sighted changes to copyright law, bowing to the lobbying pressure of large content owners.
Worst of these other measures is the criminalization of hosting a website that merely links to infringing content, exposing them to crippling fines of up to €600,000. Liability is triggered as soon as the owner has been notified by email of the alleged infringement and fails to respond by self-censoring the allegedly infringing content. Even non-profit websites are exposed to liability, if they run advertisements to defray site expenses. This provision runs against a recent judgment of the European Court of Justice ruling that hyperlinks are not a reproduction of the copyright works they link to.
The law also newly targets businesses advertising on such websites, as well as those providing it with payment services, and authorizes the Spanish domain authority to cancel any “.es” domains under which they are hosted. (It is a shame that the Spanish legislators apparently think so little of Google News, because otherwise they might have read news snippets about a pair of ill-fated 2011 bills titled SOPA and PIPA that included similar Internet censorship provisions.)
In combination, these provisions will seriously chill speech online, casting a potential cloud of liability over website operators and the intermediaries who serve them. Rather than reducing the dissemination of copyright-infringing content, its only likely effect will be to drive Spanish websites offshore to a less hostile legal environment.
Unfortunately, it's likely too late now to do much about this ill-considered law—it is already scheduled to take effect in January 2015. This is particularly poorly timed, since the European Commission is in the midst of composing a new Directive to modernize European copyright law, which is likely to be passed in that same year. Whilst the new Directive may (we can only hope) include liberalized copyright limitations and exceptions, Spain's amendments to its copyright law go in precisely the opposite direction.
There is no doubt that technological change has hit newspaper publishers as well as other copyright owners. But a backward-looking law that penalizes innovators and threatens free speech on the Internet is not the solution.