26 February 2016

German court dismisses German press publishers’ legal action against Google

On 19 February 2016, the Regional Court of Berlin dismissed a suit brought by 41 press publishers against Google. The press publishers sought to require Google to show teaser texts (so-called snippets) and full preview images of the publishers’ websites in a manner which would require Google to make compensation payments under national copyright law.

The grounds for the claim arise from the German ancillary copyright law, which was enacted in 2013, under which publishers have a right to prohibit third parties from using their publications without paying an adequate fee as compensation. It was not (and is still not) entirely clear whether snippets and previews of websites fall under the ancillary copyright law. To be on the safe side, Google asked publishers, including the claimants, to allow the free use of snippets and previews. Google indicated that if the publishers did not grant permission, it would show search results for the publishers without previews of texts and photos (i.e. only links to their websites) in order to avoid paying a compensation fee.

However, the publishers insisted that Google pay a compensation fee for the use of snippets and preview images of their websites’ content and launched a claim to prevent Google from showing only links to their websites. The Regional Court of Berlin (the Court) assessed the issue from a competition law perspective and concluded that Google had not abused its dominant position by refusing to show content which may be subject to copyright fees.

In assessing the case, the Court identified the relevant product market to be search engines which are gratuitous. This feeds into the ongoing discussion on whether market activity per se requires the generation of turnover. According to the Court, market activity should be considered in a wider context and should extend to include the disclosure of data as a payment method. The Court’s approach is in line with the approach followed by the German Federal Cartel Office, which recently indicated its intention to consider data disclosure as an alternative payment method when assessing cases in online markets.

The Court found neither any evidence of discriminatory and unequal treatment nor any evidence of an abusive behaviour. In fact, the Court found that search engines create a win-win situation for the benefit of all market participants: Google generates higher advertising revenues, its users get better information when using the search engine and press publishers increase their revenues by generating extra traffic through Google. In the Court’s opinion, this market balance would be disrupted if Google was faced with a choice to either pay for previews and snippets or abstain from showing them at all. The Court however did not comment on whether or not snippets and previews of websites may be subject to the ancillary copyright law and therefore liable to compensation fees.

The Court’s judgment is not yet final and can be appealed by the Parties within one month.

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