Google and Facebook May Now Have to Pay For Their News

The European Commission is reviewing a proposal to overhaul copyright law in favor of newspaper publishers. In an age of digital traffic and content, how does this affect the publishers, search engines such as Google, and content aggregators like Facebook?

Google and Facebook To Pay For News

The European Commission is working to overhaul copyright law to help news outlets thrive in a digital world

Europe is once again going head to head with American tech companies. This past week, reports announced the European Commission is expected to pass judgement on Apple, saying the tech leader will owe as much as $19 billion as a result of striking a deal with Ireland to significantly reduce corporate taxes. While the US Treasury Department and the Obama Administration vehemently defends Apple, some sort of penalty is expected.

This time, the European Commission has Facebook and Google in its crosshairs.

Okay, so that may be a bit of an exaggeration. But the online goliaths will be the most drastically affected by the European Commission’s new plan. The Commission is working to overhaul copyright law in favor of news outlets. Under the current proposal, media companies will be compensated by search engines such as Google, or content aggregators like Facebook, each time a link is posted showing a preview or snippet of the story.

This new action could have huge consequences for not just Facebook and Google, but for news outlets as well. Alphabet, the parent company of Google, could see publishers start demanding pay to republish pieces of their content, particularly in the “Google News” feature of the search engine. And while this protection, known as “neighbouring rights”, already exists for musical artists,broadcasters, and record labels, the commission wants to extend it to journalism, as well.

However, Google has a strong negotiating position.

Spain also passed a similar intellectual property law. Google simply removed the preview feature in the county, which caused a drop in traffic of up to 14%, causing some local news apps to shut down. The drop in traffic in Spain will cost publishers about $11 million. With the new plan from the European Commission, that number goes to $655 million by 2026.

So what does this mean for Google and Facebook?

It all depends on how this plays out with the European Commission.

Talking about news in social medias, Facebook and Google tries to fight fake news! Watch it here from CBC.

Keep an eye on the news, especially overseas, for new laws. Those may have a big say in whether shares for FB and GOOG go up or down.

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