Google News Showcase: Commitments prevent further action of German Federal Cartel Office

Google News Showcase: Commitments prevent further action of German Federal Cartel Office

The German Federal Cartel Office (FCO) had been examining Google News Showcase (Showcase) since summer 2021, after Corint Media – a copyright collective management organization – brought an antitrust complaint against Google. Showcase is a news offering that gives publishers opportunities to present content within the framework set by Google. The content made available is not selected based on Google’s mechanisms, but rather by the publishers themselves and influenced in its presentation. These “story panels” of the publishers are also displayed on Google Discover when people search for news in keywords via the search box. Corint Media’s complaint was related to the online news offering and the associated copyrights. The proceedings did not refer to the cooperation in the context of Showcase and the display of publisher content in Story Panels offered by Google as such. It was more problematic from an antitrust perspective that Google used the content to build up its own news product, which is given preferential treatment in existing Google offers or creates the risk of displacing publishers’ news offerings. For this reason, there were concerns about including Showcase content in Google search results.

The proceeding initiated in June 2021 was mainly based on the FCO’s new competences under the provisions for large digital companies which were introduced in early 2021, Section 19a of the German Competition Act, GWB. Just as the Digital Markets Act (DMA), this provision also serves to ensure the contestability and fairness of digital markets. In contrast to the DMA, which provides a regulatory framework, Section 19a GWB is an instrument of competition law at its core that enables the FCO to intervene. In December 2021, the FCO decided that Alphabet Inc., Mountain View, USA, and therefore also its subsidiary Google, is subject to extended abuse control by the competition authority pursuant to Section 19a (2) GWB. Google did not file a complaint against the market position decision itself, so that the circumstances which enable the FCO to open the proceeding pursuant to Section 19a (2) GWB were not at issue. Therefore, the only question arose as to whether the respective practice by Google was objectively justified. In this respect, the burden and proof lay with Google as the company with predominant cross-market significance for competition. Based on presented or known facts, a comprehensive balancing of interests had to be carried out by the FCO in light of the GWB. Furthermore, the interests of the publishers who decided to participate in the Showcase also had to be taken into account.

The FCO concluded the proceeding without binding commitments (Section 32b GWB), which would have a stronger effect for Google but also for the FCO. From the view of the FCO this might have been preferable since Google has already changed its conduct in many respects and that measures and clarifications still outstanding will be taken. According to the FCO, due to the proposed adjustment of the contracts by Google, there is now a clear separation between the participation in Showcase and the negotiations for the remuneration of the ancillary copyright beyond the Showcase content. Taking into account the changes made by Google in the course of the proceedings, no disadvantage relevant under antitrust law could be identified for publishers who have opted for collective enforcement of the ancillary copyright. On the one hand, the publishers can also participate in Showcase and receive remuneration for this. On the other hand, the publishers did not receive any payments for displaying press content in Google products, because no agreement has been entered between Google and the collective management organization Corint Media. However, Google has offered Corint Media compensation, also in form of an interim payment, which is comparable in its calculation and amount to what Google pays individual publishers under the Extended News Previews (ENP) agreements. Publishers in Germany can now license their ancillary copyright in relation to press content separately from a Showcase contract, similar to what had already been enforced by the antitrust authorities in France. The French competition authority had already issued a fine of around EUR 500 million against Google in the summer of 2021, after 121 publishers had lodged complaints against Showcase there. In addition to corresponding contract amendments, Google has now also formulated clarifications, e.g. if a publisher participates in Google’s Showcase and whether this has an effect on the ranking of the respective publisher’s content in Google Search.

Google will implement further measures in the coming weeks. In particular, it will provide even clearer information about the essential framework conditions of Showcase. This includes explaining how Showcase works and what the actual requirements for publishers to participate are. This will work towards non-discriminatory access to this platform, the details of which will then be subject to media supervision under the German State Media Treaty. According to the President of the FCO, the measures promised by Google would be constantly reviewed for effectiveness with the help of the market participants concerned.

While the proceedings of the FCO – the first of their kind in Germany – have now ended without an injunction, Corint Media, three publishers’ associations and Google are still arguing in parallel about the appropriate remuneration for the publishing products used by Google. For the question of the appropriate level of remuneration for ancillary copyrights, the legislator provides for special arbitration proceedings at the German Patent and Trademark Office under the German Collecting Societies Act (VGG). The parties have also initiated such proceedings in the meantime. The FCO has the opportunity to participate in the proceedings as “amicus curiae”.

Finally, the FCO does not expect potential changes in the presentation of Showcase content or the granting of access to Showcase to remain undetected for long as this will be is safeguarded by Google’s reporting obligations. Also from this point of view, the conclusion of the proceedings without an injunction may still leave scope for further actions in the future. In addition, it appears that this is just one of many cases that the FCO is now dealing with because of Google on the basis of Section 19a GWB. Thus, the FCO recently issued a notice to Google and sent its preliminary legal assessment in the proceedings because of Google’s conditions for data processing. In a press release dated January 11, the FCO states that Google will have to adjust its data processing conditions and the practices based on them. This request is also based on Section 19a GWB.

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