Competition vs. Copyright On Digital Platforms

The U.S. Copyright Office last week released a report on copyright protections for press publishers and whether the U.S. should adopt additional digital protections similar to the “ancillary right” included in the European Union’s Directive on Copyright and Related Rights in the Digital Single Market (“EU Copyright Directive”), which is designed to empower publishers to demand payment for the aggregation and display their content online by the likes of Google and Facebook.

The report concludes that press publishers already have ample and sufficient protection under existing U.S. copyright law and that additional protections are both unwarranted and unlikely to significantly improve publishers’ current, parlous economic situation.

The study had been requested last year by a bipartisan group of U.S. senators, including the chair and ranking member of the IP subcommittee of the Senate Judiciary Committee. Oddly, they made the request despite the fact that U.S. news publishers, by and large, are not seeking additional copyright protections for their content.

Instead, in comments filed with the Office by individual publishers and the News Media Alliance, news outlets emphasized that their current woes are the result of the extreme imbalance in bargaining power between individual publishers and the online giants like Google and Facebook, rather than a lack of copyright protection.

Their proposed solution, championed by the NMA and embodied in the Journalism Competition and Protection Act (JCPA) now pending in the House and Senate, is to rebalance the negotiating leverage between publishers and tech platforms by creating a temporary safe harbor from antitrust law to allow publishers to bargain collectively with online platforms over the manner and terms for the re-use of their content.

The Copyright Office largely concurs with the view that the challenges facing news publishers today is largely a competitive issue, rather than a question of rights, but the report sticks to its lane and declines to offer an opinion the best policy approach:

We believe that other agencies are better positioned to evaluate the merits of competition-based
protections for press publishers. For this reason, the Office does not offer any findings or
recommendations with respect to competition policy or alternative models for funding

Whether the report will have any bearing on the fate of the JCPA is unclear. But the NMA did its best to put a positive spin on it.

Still, the report is worth a read, if only for its overview and analysis of the different approaches to the problem adopted by different countries, including Australia, Germany, Spain, France and the EU as a whole.

The JCPA, in fact, is more closely modeled on Australia’s recently enacted Bargaining Code for online platforms, which requires they to negotiate with any new publisher or group of publishers that requests it of face binding arbitration if an agreement cannot be reached, than on the EU’s ancillary copyright approach.

News publishers are very differently positioned within the overall media ecosystem from music and movie producers. But by reframing the debate over the use of copyrighted content on digital platforms around competition rather than intellectual property rights, the JCPA, should it advance, could still prove to be a bellwether for other media sectors.

Much of the frustration that rights owners of all stripes have experienced in effectively monetizing their works online is rooted in the same gross mismatch in market power between producers and platforms confronting news publishers.

The extreme network effects created by the World Wide Web have invested a fortunate (some might even say predatory) few gatekeepers with near-monopoly power, over market access, over eyeballs and over advertising dollars. That extreme concentration of market power has grossly distorted the efficient functioning of digital markets for many types of goods and services, including for works protected by copyright.

Addressing that distortion at its root may require a different set of tools than copyright law provides.

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