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Facebook and Google ‘will have to pay’ for content that generates ad revenue

Media firms and artists set for pay deal due to new EU law


The logo for Google LLC is seen at the Google Store Chelsea in Manhattan, New York City, U.S., November 17, 2021. REUTERS/Andrew Kelly

The logo for Google LLC is seen at the Google Store Chelsea in Manhattan, New York City, U.S., November 17, 2021. REUTERS/Andrew Kelly

The logo for Google LLC is seen at the Google Store Chelsea in Manhattan, New York City, U.S., November 17, 2021. REUTERS/Andrew Kelly

Big tech firms will be forced to come to financial arrangements with traditional media companies, artists and performers whose content they use under a new EU directive signed into Irish law.

The move will mean Google and Facebook will have to negotiate pay deals with newspapers and other creative content creators featured in their news feeds and online search results.

Ireland is one of seven countries to introduce the EU directive that was agreed by the European Council two years ago and signed into law this week by Tánaiste Leo Varadkar. Mr Varadkar said the internet has “utterly changed” the way in which “we create, read and watch the news, books, music, TV and films”.

“The law needs to catch up with this change and ensure that the rights of our creators, writers, journalists and performers are upheld when it comes to their work being shared online,” he added.

Spain, Holland, Hungary, Germany, Croatia and Malta have enacted the directive while France has partially signed the new copyright rules into law.

The aim of the legislation is to ensure multinational tech companies compensate content creators such as media companies whose work appears on their platforms and generates billions of euro in advertising revenue for them. To date, media companies receive no money from tech firms when their content features in their searches or on their news feeds.

The new law will strengthen the rights afforded to various categories of copyright holders, including journalists and authors, when their work is shared online. It will be up to publishers or representative bodies to negotiate financial arrangements with tech companies who use their material.

The legislation sets out in law a content provider’s right to “appropriate and proportionate remuneration” from tech firms using their work. There will also be a transparency obligation on tech firms to tell copyright holders how they are using their material.

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A so-called ‘contract adjustment mechanism’ will also be required in any deals reached to ensure content providers receive fair compensation for their material if the originally agreed terms become disproportionately low compared to the success of their work or performance.

“From now on in Ireland, press publishers such as newspapers have a new legal right in relation to the use of their content by online service providers,” Mr Varadkar said.

The Tánaiste said in the absence of an agreement with publishers, online platforms will not be permitted to make use of their work but will continue to be able to use hyperlinks or short extracts.

“Consumers shouldn’t see any difference in the way they see articles appear on their feed. You will continue to be able to share content on social media and link to websites and newspapers via hyperlinks,” he added.

The new law also provides exceptions to allow for copy-right-protected material on- line and across borders for education, research and cultural heritage purposes.

Last month, Facebook reached an undisclosed financial deal with a representative group for French publishers whose work they use online. While in July, France’s antitrust watchdog fined Google €500m for failing to act in good faith during talks with publishers on reaching an agreement under the EU copyright directive.

Facebook and the Australian government clashed earlier this year when similar laws were introduced. Facebook initially removed content from Australian media companies but eventually agreed arrangements with local publishers.

It  has since announced a $1bn (€880m) fund for paying news outlets for their content.

In a recent blog post, Google’s director, news and publishing partnerships Sulina Connal said the company is open to reaching arrangements with media companies in EU member states.

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