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Spain: Publishers pay themselves in desperate effort to show that giving them extra rights actually has an effect

Two weeks ago the IMCO committee managed to give a new breath of life into the proposal for an ancillary copyright for press publishers that many observers (including us) had presumed to be more or less dead in the water. Following on the heels of this surprising development interesting information is emerging from Spain where a similar right has been existing since 2015. The situation in Spain shows how ineffective additional rights for publishers are and how publishers try to influence the EU policy debate on copyright reform by manipulating evidence.

Earlier this week the Spanish Association of Publishers of Periodical Publications (AEEPP) published an English version of a study that assesses the impact of the introduction of the ancillary copyright (article 32.2 of the Spanish Copyright Act) in Spain. This article states that a copyright fee must be paid by sites aggregating or otherwise linking to online news to the publishers of such news. These payments (referred to as a Google Tax, after the fact that they seem to be primarily intended to extract revenue from Google) are collected by the CEDRO copyright collection society.

The study comes to a pretty devastating conclusion that clearly shows that granting a new right to press publishers is highly problematic and will not have the desired result of stabilising the business models of struggling publishers:

This analysis concludes that there is neither theoretical nor empirical justification for the introduction of a fee to be paid by news aggregators to publishers for linking their content as part of their aggregation services. Likewise, the arbitrary nature of the fee, which prevents publishers from opting out of receiving the payments, inflicts harm on a large number of outlets, particularly small publications.

Moreover, the introduction of such a fee has a negative impact on competition, not just for the aggregator segment, but also for online publications and, ultimately, for consumers, including readers and advertisers.

[…] On the more distant horizon, the negative impact will be more significant, discouraging the development of innovative content and platforms in the ecosystem of online news consumption in Spain.

In light of these findings, it is clear that the reform followed the interests of a particular group of publishers which, given the decline of their business, sought to obtain an additional source of income from one of the Internet giants, even to the detriment of other publishers, to the development of the online news production and aggregation sectors in Spain and, ultimately, to consumers (including advertisers) and to social welfare.

Infighting between publishers

The last paragraph of the conclusion provides an interesting insight in the divisions among publishers. The AEEPP commissioned study is pointing the finger at “a small group of publishers affiliated with the Association of Publishers of Spanish Newspapers” (AEDE) which represents the big newspaper publishers and accuses them of putting the particular interests of large established newspapers above the interests of the wider publishing sector.

This clearly shows that the new right for publishers which affect all publishers is only supported by a small subsection of the sector. And even among newspaper publishers support seems to be waning as evidenced by a recent editorial in El Pais (the biggest daily newspaper in Spain) which argued that the new right was a mistake and called on European legislators not to follow the failed Spanish example.

Left pocket, right pocket

It seems that the proponents of the link tax have also realised that all of this severely undermines the case for new rights for publishers on the EU level (if there ever has been such a case). Incapable of pointing to evidence that the new rights have had the desired effect (more revenue for publishers and journalists) they have simply started to invent their own evidence…

On Tuesday last week, CEDRO (the collecting society in charge of collecting the link tax) announced that it had finalised its first licensing agreement with the online new aggregator and presented this  as evidence of the fact that the link tax “seeks a balance between” both publishers and news aggregators.

The problem with this logic? is owned by Axel Springer, the German publishing conglomerate that is the driving force behind the introduction of the German ancillary copyright for press publishers. It is clear that as such Axel Springer has a clear incentive to show that ancillary rights for publishers “work”, even if that means engaging in “left pocket, right pocket” transactions that do not generate a single extra euro for struggling publishers and the journalist working for them.

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