Saturday, 01 October 2016 02:28

Is EU digital copyright reform a Google news tax?


Many of us have changed our reading habits from hardcopy newspapers and magazines to digital and online services from social media and news aggregators. In the process the original writer, journalist or newspaper owner who developed the content has been lost, ignored and deprived of income due.

The digital reading habits have led to broader audiences, but have also impacted advertising revenue for the newsprint operators and made the licensing and enforcement of the rights in these publications increasingly difficult.

The European Commission, earlier this month, released its draft updated copyright rules in an attempt to regulate the digital economy and ensure rights are properly attributed and protected.

The new EU copyright rules recognise the important role press publishers play in investing in and creating quality journalistic content.


However, not everyone welcomes the proposals, with US tech giants such as Google among those most concerned.

The main meat of the Commission’s vision of copyright reform, an expanded publisher ancillary right for online content, has been dubbed a ‘Google news tax’, or more accurately a ‘link tax’.

The idea is that news aggregators, including Google news, should pay publishers for the content on their search engine — the headlines and article snippets that are displayed.

The scope and the enforcement of copyright in the digital environment have been among the most complex and controversial issues for lawmakers for the last decade.

Due to the ubiquitous use of digital technology, modern regulation of copyright inherently touches upon various areas of law and social and economic policy, including communications privacy as well as Internet governance.

In June, India’s finance minister Arun Jaitley announced in his budget speech the introduction of an equalisation levy on international digital services provided by the likes of Google and Facebook.

The idea is to indirectly tax internet giants for the money they make from Indian advertisers’ content by imposing a levy of 6% on the payments these advertisers make. The tax has been aimed at technology companies that make money via online advertisements but make no corporation tax returns in India.

Whereas the EU has not said it will introduce an equalisation levy, there is considerable concern that India’s first step to tax the digital economy may be followed by individual EU member states who have individual tax regulatory control within their own countries.

In the case of the equalisation tax in India, it remains to be seen whether the foreign company will stand to bear the loss by simply accepting lower margins because of the new tax or hike the advertising rate taking the new tax into account.

But Google may play hardball, as it did when Spain introduced strict copyright rules in January 2015, which made it impossible for individual publishers to waive their rights to remuneration.

Google shut down its news service in Spain and removed all Spanish publishers from its global newsfeeds, saying it could not afford the significant costs the law created for something that generated no advertising revenue.

A link tax could be bad news for all publishers, but particularly for smaller publishers that will find that this is not the way to address falling revenues from traditional print sales.

It must be recognised that news aggregators deliver huge traffic to publishers’ websites.

Also, very few young people get their news from one source anymore. News aggregators are the way they find out what content is available, before going on to buying access to those articles that are behind paywalls.

More than ever before, consumers are enjoying the freedom of news from multiple sources and, thereby, delivering advertising revenue to many different publishers.

And, yes, we need copyright laws in Europe that recognise the reality of the Internet, but they should be capable of being enforced without a damaging levy or linked taxation system.

Source :


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