1. Clear rules for a fair balance of interests
Copyrights and ancillary copyrights are intellectual property rights that unalterably number among the fundamentally guaranteed rights of freedom. They form an integral part of the framework that guarantees freedom and plurality of media and the press. With the ancillary copyright for press publishers, the regulatory framework is being adjusted to the requirements of digital media markets.
The German economic system adheres, inter alia, to the principles of the social market economy. The state defines the regulatory framework for fair competition, innovations, and freedom.
Further developing proven legal frameworks
There is a clear, constitutional legal framework for the treatment of property, regardless of whether said property is material or immaterial. Copyright law has applied to intellectual property since 1965. For 50 years copyright law has also proven to be successful: Thus, there have been ancillary copyrights, which protect the services and investments of media companies, the manufacturers of recording media, radio companies, film production companies and many more, for decades.
The ancillary copyright for press publishers merely fills a gap in German copyright law that opened up because digital technology has made possible so much that was previously unthinkable. Search engines and news aggregators compile and categorize publishers' content and use it to enhance their own offers. While they profit from value added to their own offerings by using press products and, thus, increase their ad revenue by doing so, publishers are not involved in this process. Yet it is them who shoulder the enormous investments necessary to create media content and innovations. It is the publishers who hire countless journalists, editors and freelancers.
The German legislator identified this gap and, by passing the ancillary copyright for press publishers in 2013, made a contribution to a fair balance between right holders and users. The ancillary copyright grants press publishers the exclusive right to decide on the usage of their products, or extracts thereof, by commercial providers such as search engine operators or news aggregators. It is the declared intention of the legislator to enable publishers to request reasonable compensation for each usage. In this way it is ensured that there is a fair balance of interests between the creators and the users of press products in the digital media markets. The principle of copyright, which is to establish a balance between right holders and user, thereby also applies to the digital world of media.
2. A law for fair compensation and distributive justice
After intense debates in the German Bundestag, the ancillary copyright for press publishers came into effect on 1 August 2013 and was confirmed again by Parliament on 11 June 2015. What does the text of the law say? And what is actually being regulated?
The German Bundestag incorporated the ancillary copyright for press publishers into the existing body of German copyright law (UrhG) with the three new paragraphs 87f to 87h. The creators of press products, press publishers, are thus guaranteed the exclusive right to make the press product or extracts thereof publicly accessible for commercial purposes. This especially applies when it comes to operators of search engines and news aggregators. In case press products are commercially used by such services, the provider of the service has to obtain a license from the press publishers to do so since 1 August 2013. The explanatory memorandum for this law stipulates explicitly that this right shall enable publishers to link the issuing of licenses to the payment of reasonable compensation. The German ancillary copyright for press publishers has thus been deliberately structured in such a way that both sides negotiate the adequate compensation. In Spain, for instance, legislators took a different route and stipulated a compulsory, fixed compensation for all usage in the so-called news services, but not for utilization by search engines.
The law in detail
§ 87f UrhG defines the press product as the technical, editorial determination of journalistic pieces that periodically appear under a title and which are overall typical press publications. By this definition, articles and images that serve to convey information, form an opinion or entertain are generally protected as part of a press product. Individual words or very short text extracts may be made publicly accessible without consent from the press publisher. In particular it shall be permitted to quickly and briefly name the linked content in search engines and news aggregators without having to obtain consent. In an attempt to define this legal exception further, the arbitration board at the German Patent and Trademark Office, suggested that the ancillary copyright shall be applicable if more than seven words (not incl. search term(s)) are displayed. As a cogent procedural prerequisite the case had to be brought before the arbitration board as a first instance. It has issued its settlement proposal on 24 September 2015. Only if the display of press products exceeds this limit consent for usage in accordance with ancillary copyright for press publishers is required, according to the arbitration board.
The authors’ claim to participation
One special feature of the ancillary copyright for press publishers is the authors' claim to participate in any remuneration paid to the publishers. § 87h Copyright Law states: "The author must be reasonably involved in compensation." The ancillary copyright for press publishers thus not only compensates the service and investment provided by the publisher, but also ensures reasonable involvement by authors, such as text and photo journalists as well as freelance editors in compensation for the usage of press products online.
3. The legal enforcement of the ancillary copyright for press publishers
VG Media currently represents the ancillary copyright for press publishers of more than 200 publications vis-à-vis operators of search engines and news aggregators who use these published products.
With the ancillary copyright for press publishers, publishers have the exclusive right to make press products or extracts thereof publicly available for commercial purposes. This right applies vis-à-vis operators of search engines and news aggregators. This includes the right to grant authorization to use the publications upon payment of compensation.
After establishing a tariff for the usage of extracts of digital press products and its publication in the German Federal Gazette, VG Media offered the operators of search engines and news aggregators to negotiate license agreements based on the published tariff. However, some large search engine operators, incl. the quasi-monopolist Google, neither recognize the applicability of the law nor the appropriateness of the tariff set up by VG Media.
Answering further questions about the legal proceedings
The arbitration board of the German Patent and Trademark Office (GPTO) in Munich acts as a first instance authority responsible for settling disputes of this type. Questions on the applicability and appropriateness of the tariffs set by collecting societies must be brought before the arbitration board. This is as a cogent procedural prerequisite. Only after the arbitration board has considered the case and issued a settlement proposal, the case can be brought before the courts. The arbitration board submitted its decision to the parties on 24 September 2015. The arbitration board confirmed the applicability of the press publishers' tariff. The arbitration board, however, has stated that the calculation method of the tariff should be improved. Furthermore, the arbitration board prompted the parties to settle the case amicably. The arbitration board's proposal was rejected by all parties involved in the dispute. Therefore the ancillary copyright for press publishers is now enforced before the Landgericht Berlin (district court).
Abuse of market position cannot prevent implementation of the law
Google uses its overwhelming market share of about 95 % of the search engine market to circumvent the ancillary copyright for press publishers. Due to its market position Google has been able to extort free-of-charge licenses from the press publications represented by VG Media in order to use text extracts in its own services free of charge. Google threatens to restrict the display of the press products of such publishers, who insist on the enforcement of the ancillary copyright granted by German law, in Google's various products.
Because Google – due to its market share – effectively determines whether press products may be found on the internet or not, this results in severe competitive disadvantages for those publishers, who insist on the enforcement of their ancillary copyright, compared to the publishers who abstain from doing so out of their intimidation by Google's threats.
The Federal Cartel Office has been very reticent in the application and implementation of German cartel law against internationally active internet companies. Several publishers have thus filed lawsuits before the competent courts – currently in the second instance before the Kammergericht Berlin (court of appeal) – directed against Google’s anti competitive behaviour.
4. All the diversity of media and opinions in one organization
VG Media represents the copyright and ancillary copyright of a large range of press publishers and private broadcasting stations. The companies it represents are exemplary of the diversity of media and opinions in Germany.
VG Media, based in Berlin, is the collecting society of the private media companies. It represents the copyright and ancillary copyright of nearly all German - and some international - private TV and radio broadcasters, as well as over 200 digital publications.
Media companies from a variety of fields are represented by VG Media, including TV stations like Sat.1, ProSieben, RTL, N24, SPORT1, CNBC Europe, Al Jazeera, Eurosport and VIVA; radio broadcasters such as ANTENNE BAYERN, Klassik Radio, RTL RADIO, Hit Radio FFH and radio ffn; and digital publications including welt.de, handelsblatt.com, haz.de, augsburger-allgemeine.de, derwesten.de, westfälische-nachrichten.de.
VG Media licenses the copyrights and ancillary copyrights of the media companies vis-á-vis a wide range of users. The basis for the compensation are tariffs published in the Federal Gazette. Like all other collecting society, VG Media is subject to legal state supervision. This ensures that the German law on collecting societies (Urheberrechtswahrnehmungsgesetz) is reasonably implemented and fair competition is enacted among both the right holders and the users.
Diversity of opinions and media in VG Media
As concerns the ancillary copyright for press publishers, VG Media currently represents more than 200 digital publication domains. These are exemplary of a large segment of the diversity of media and opinions in Germany - from the preferred local newspaper, the national daily press, and the special interest magazine, up to digital news stations from popular television and radio broadcasters.
By enforcing the ancillary copyright for press publishers, VG Media is making a major contribution to ensuring the constitutionally guaranteed existence of free press. The media play a crucial function in monitoring politics and the economy in a democratic society. Through their reporting the press helps organize the variety of information and make it possible for large sections of the population to form a social and political opinion. Especially the smaller regional press publishers are a living example and expression of this constitutional objective.