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EU Lawmakers Are Still Considering This Failed Copyright Idea

March 24, 2016, 7:32 AM UTC
Google Opens New Berlin Office
BERLIN, GERMANY - SEPTEMBER 26: A DJ plays music on September 26, 2012 at the official opening party of the Google offices in Berlin, Germany. Although the American company holds 95% of the German search engine market share and already has offices in Hamburg and Munich, its new offices on the prestigious Unter den Linden avenue are its first in the German capital. The Internet giant has been met with opposition in the country recently by the former president's wife, who has sued it based on search results for her name that she considers derogative. The European Commission has planned new data privacy regulations in a country where many residents opted in to have their homes pixeled out when the company introduced its Street View technology. (Photo by Adam Berry/Getty Images)
Photograph by Adam Berry—Getty Images

For years now, large European newspaper publishers have dreamed of charging news aggregators such as Google(GOOG) News for the privilege of sending readers to the publishers’ online articles. In other words, they want the advertising benefit of all that traffic, plus money on the side.

The publishers managed to get politicians on their side in both Germany and Spain, winning laws that demand just that. And now the German head of digital-economy policy at the European Commission, Günther Oettinger, is considering rolling out this “Google tax” on the wider EU stage.

Oettinger’s department published a consultation on Wednesday that covers this “neighboring rights” issue (more commonly referred to as “ancillary copyright”). The consultation will run until June 15.

The problem is, ancillary copyright proved to be a complete disaster in both Germany and Spain, failing to put a penny into the pockets of those press publishers — and in the Spanish case, causing losses of millions of euros.

The consultation (in English, German and French, but sadly not Spanish) asks whether those earlier attempts had “any impact” on consumers, authors, publishers and web firms. That’s a worthwhile question.

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Germany was the first to get an ancillary copyright law back in 2013, following intensive lobbying by politically connected players such as publishing giant Axel Springer. The law gave publishers the right to charge online news aggregators such as Google for reproducing snippets of their article text in search results.

However, when they tried to enforce this new right against Google, the giant simply stopped using those snippets. Referrals to Springer properties such as Bild plummeted by as much as 80% and the publishers quickly retreated, granting Google a temporary exemption from having to pay them.

The publishers then tried to take Google to the German competition authority, claiming it was using its dominance of the search market to strong-arm them into submission. The regulator decided Google was under no obligation to reproduce snippets of the publishers’ article text if it didn’t want to. Subsequent negotiations to decide a rate for the fees have come to nought.

In Spain, meanwhile, legislators came up with an even tougher version of the law that forced publishers to demand ancillary copyright fees from news aggregators, whether they wanted to or not (and smaller publishers, needing Google’s traffic, really did not want to). It was impossible for Spanish publishers to grant Google the exemption their German counterparts had granted.

Faced with this law, Google shut down Google News in Spain. A study commissioned by the Spanish publishing industry itself found the whole episode to be disastrous, concluding that there was “no theoretical or empirical justification for the fee.” Small publishers, of course, bore the brunt of the financial losses stemming from Google’s decision to withdraw from the market.

The big publishers, which have been lobbying Oettinger with vigor, must be hoping that an EU-wide ancillary copyright law would help them succeed by sheer scale — surely Google won’t axe Google News for the whole region.

That may not be a good bet. Google does not actually make ad money off Google News itself — although pertinent news stories do of course spice up Google’s standard search results, which do make Google money. Google could probably turn off Google News in the EU without too much impact on its bottom line.

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A deeply cynical reading of the situation might note that larger, traditional publishers such as Springer have huge marketing budgets and brand awareness (particularly in relatively segregated, non-English-speaking markets), while the smaller upstarts that use the web to challenge them rely heavily on their articles showing up in search. The death of the EU news-aggregation sector would be very much in the interest of the legacy players.

It’s no surprise, therefore, that a group of publishers (many of them quite small) wrote to the Commission last year to plead against a widespread introduction of ancillary copyright in Europe.

“We know such proposals make it harder for us to be heard, to reach new readers and new audiences,” they wrote. “They create new barriers between us and our readers, new barriers to entry for news publishers such as ourselves. It will be harder for us to be present, discovered and accessed by our readers online.”

It will be interesting to see whether anyone, other than the few mega-publishers who are behind all this, will take a more positive line when responding to the ancillary copyright consultation. And if, when all the results are in, Oettinger still thinks it’s an idea worth pursuing.