This article was first published in German at Übermedien.de on March 31, 2022.
Last week, the EU reached an agreement on a core piece of platform regulation, the Digital Markets Act. The Digital Markets Act contains rules for digital companies with high market power, so-called gatekeepers. These are large companies that provide an exceptionally widely used platform service, for example a smartphone operating system, a social network, a messenger service or a search engine. Unlike traditional competition law, which mainly intervenes after the fact, the Digital Markets Act is intended to prevent market abuses and make it easier for smaller competitors to enter platform markets.
A noble intention, but the last round of negotiations on Thursday, March 24, was overshadowed by a debate on the ancillary copyright for press publishers. At the last minute, the European Commission brought into play a proposed amendment to the Digital Markets Act that would have obliged search engines and social networks to offer publishers uniform tariffs for payment for press snippets displayed in search results or social media posts. It was only on the day of the final trilogue, i.e. the informal negotiation between the EU Commission, the European Parliament and the Council, in which the final compromise on the legislative text was negotiated, that Euractiv made this proposal public and attributed it to lobbying by publishers’ associations.
Must-Carry-Must-Pay
Already since the EU copyright reform of 2019, the ancillary copyright has been in force throughout the EU, enabling press publishers to restrict the use of excerpts from press articles by online services. The aim of the publishers’ associations, above all the Springer publishing house, which invented the ancillary copyright in 2009, has always been not only to put a price tag on the use of prses snippets, but at the same time to oblige companies such as Google or Facebook to also display this paid content. If publishers’ content appeared in search results and Facebook postings, the argument goes, Google and Facebook were unjustifiably enriching themselves from the investments of the media houses – if, on the other hand, the content was not displayed, this would be an unfair exploitation of the platforms’ market power and a suppression of press freedom. The only fair solution: platforms would have to be obliged to display publishers’ content and pay for it – a must-carry-must-pay obligation, or in other words a licence to print money for the publishers.
The EU copyright reform only partly achieved this goal: academia and civil society warned that the ancillary copyright would restrict freedom of information and have a detrimental effect on small news outlets, which gain particularly large shares of their readers through links from search engines or social networks. The European Parliament and the Council trimmed back the originally very far-reaching proposal of the then Digital Commissioner Günther Oettinger (CDU) in view of the extensive criticism. The rapporteur of the European Parliament Axel Voss (CDU) could not prevail with his proposal to force publishers to charge money for the ancillary copyright. Also, in the course of transposing the ancillary copyright into national laws, the EU Commission stressed that publishers could charge money for the display of articles, but that there should be no compulsion to contract. In other words: How high the price is and whether money is charged at all is left up to the publisher. And if this price is too high for a platform, it can always choose not to display the paid content.
After their partial success in the copyright reform, the publishers’ associations continued to pursue their “Must-Carry-Must-Pay” goal. It was only in November that the publishers’ associations were rebuffed in their attempt to anchor an obligation for platforms to display press articles in another bill, the Digital Services Act.
Digital Markets Act as missing piece of the puzzle
The EU institutions had already almost completely agreed on the Digital Markets Act ahead of the last trilogue on Thursday, March 24. Only a few questions were still open, among others whether exclusively app stores would have to offer fair, reasonable and non-discriminatory access conditions for all apps – this was the position of the EU Commission and Council – or whether these principles of non-discriminatory access should also apply to other types of gatekeeper platforms, as the European Parliament demanded.
On the last day of negotiations, the EU Commission now presented its “compromise”, which had never been discussed before: In addition to fair access to app stores, search engines and social networks – among the gatekeepers, that is, Google and Facebook – should establish fair remuneration rules for the display of protected digital content of their commercial users. The platforms would have to negotiate in good faith with these companies – i.e. press publishers – at their request. In case of violations, publishers could turn to an independent arbitration mechanism and the Commission would monitor compliance with the rules.
European Parliament unimpressed by lobby proposal
It is obvious that this “compromise” has little to do with the original provision, which is about platforms, especially Apple’s App Store, not being allowed to charge arbitrarily high fees to the third-party companies who depend on them. In the case of the ancillary copyright, however, it is the press publishers, i.e. the third-party providers, who demand fees from the platforms, not the other way around. Nevertheless, the Council, led by the French Council Presidency, which is known to be rightsholder-friendly, seemed ready to go along with the proposal. It was finally stopped by the opposition of MEPs, who expressed their displeasure about the lobby proposal on Twitter on the evening of the hearing.
Instead, after eight hours of negotiations, a compromise close to the Parliament’s position was reached late in the evening: app stores, search engines and social networks must define fair, non-discriminatory conditions for access to their services. This means they must not arbitrarily exclude individual companies from their service, nor charge arbitrarily high fees for this access. Of course, this does not imply an obligation for these platforms to pay other companies who wish to use their service. But the French Secretary of State for Digital Affairs, Cédric O, put it differently at a press conference on Friday: Of course, remuneration for content is part of fair access conditions, he explained. Commissioner Vestager answered evasively, MEPs contradicted.
Commission does the publishers’ dirty work
Trilogue negotiations supposed to facilitate finding a compromise between the positions of the two European legislative bodies – the directly elected members of the European Parliament and the national governments represented in the Council. The EU Commission is supposed to take on the role of mediator between those positions. This is certainly not what happened in the case of the Digital Markets Act, because no reference to ancillary copyright was found in the original legislative proposal of the EU Commission for the Digital Markets Act nor in the negotiating mandates of the European Parliament or the Council. So what led the Commission to pull a press publishers’ lobby proposal out of the hat so late in the negotiations that the chief negotiator of the European Parliament told Euractiv on the day of the last negotiation that this proposal had never been discussed with him before? For the time being, we can only speculate, but at the latest after the conclusion of the legislative process, the Commission will have to provide some answers under the Freedom of Information Regulation.
It is probably thanks to Euractiv’s reporting that the Commission did not succeed in sneaking the ancillary copyright into the Digital Markets Act. This gave MEPs at least a few more hours to inform themselves about the proposal. The pressure for a quick agreement is considerable in the trilogue format: representatives of the EU Commission, Parliament and Council lock themselves in a room together and only come out when a compromise has been found. Often this happens late at night, and it is not necessarily the side with the better arguments that wins, but the one with the better stamina. Under the greatest stress, the negotiating parties have to grasp and weigh the implications of the compromises they negotiate. Text proposals can no longer be reviewed by independent experts or translated into the native languages of the MEPs before they have to make a decision. It is therefore all the more important that the Commission actually fulfils its role as a mediator between two opposing positions, instead of making itself the agent of private interest groups.
Trilogue procedure makes the EU vulnerable to lobbying
Incidents such as the negotiation of the Digital Markets Act raise the question of why the EU relies on the informal and completely intransparent trilogue procedure for lawmaking in the first place. The EU treaties actually say something different: according to them, there is an ordinary legislative procedure with three readings. Amendments are submitted in due time, discussed transparently in committees and finally in a conciliation committee and voted on individually in plenary, as can be read on the Parliament’s website. In order to save time in the case of particularly technical, non-controversial laws, the trilogue procedure was established, in which the Parliament and the Council agree before the first reading and simply adopt the same text of the law. In this case, the law is already passed after the first reading, a second reading becomes unnecessary. Of course, this only works if no more changes are made in the final vote, so either Parliament and Council agree to the entire, already pre-negotiated package, or the deal is off.
Over the years, this trilogue procedure has become the de facto standard for all EU legislation. The ordinary legislative procedure is practically no longer used. The adoption of trilogue results is only considered a formality. The result of this practice: Draft versions of the laws we all have to abide by remain hidden even from MEPs until the last minute and have to be painstakingly dragged out into the open afterwards through projects like “Black Box EU” by FragdenStaat. Politicians have to spend their nights in marathon negotiations, during which of course a lot of mistakes happen. In the best case, the result is ambiguous legislation, the meaning of which is debated in the press the next day. What these laws really mean is then decided years later by the European Court of Justice. In the worst case, lobby groups with a close relationship to Commission President Ursula von der Leyen (CDU) can exploit the weakness of the trilogues to push through their particular interests. The current dispute over press publishers thus clearly shows what is wrong with EU legislation – and should therefore be changed.
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Keep up the good work Felix!