A last-minute proposal to the Digital Markets Act (DMA) could oblige gatekeepers to put in place fair conditions and an arbitration mechanism for the remuneration of rightsholders.
The European Parliament has been pushing for extending the provisions on fair, reasonable and non-discriminatory (FRAND) general conditions for access for business users. Originally intended just for app stores, MEPs wanted to extend FRAND to all core platform services.
When the DMA’s general approach was adopted in November, nine European countries, including heavyweights like Germany, Italy, Spain and Poland, showed openness to enlarge the FRAND obligations during the trilogue.
During a COREPER meeting with the other EU ambassadors on Wednesday (23 March), the French Presidency obtained a revised mandate that would allow for the extension of FRAND rules to social media and search engines.
However, a new proposal of the European Commission to extend FRAND conditions not only to access but also remuneration for the providers of digital content has been kept under the radar until now. The proposal has long been a flagship request from publishers in the context of the Copyright Directive.
According to a proposal for a new article (Art. 6.1.kb.), seen by EURACTIV, the gatekeeper would have to publish the general conditions for remuneration and the related methodology and respond in good faith to content providers’ request to apply them.
“In the general remuneration conditions, the gatekeeper shall identify, an easily accessible, impartial and independent arbitration mechanism that shall be available in case of a disagreement between the gatekeeper and the business user about the application of the general remuneration conditions or about the good faith of the gatekeeper in individual cases,” reads the text.
The Commission will oversee the application of the general remuneration conditions, which if not respected might lead to non-compliance with the DMA itself. Moreover, the EU executive could adopt implementing acts to introduce further requirements on the remuneration conditions and arbitration mechanism.
“Basically, the Commission becomes a price regulator for publishers,” an EU diplomatic source told EURACTIV. While the proposal was not openly discussed with the other member states, the diplomat said the French Presidency would certainly interpret the extended mandate as including it.
A second diplomatic source told EURACTIV that this could be seen as ‘last concessions’ other countries could make to Paris, as the French government has traditionally been sensitive to publishers’ interests.
“The unfair treatment of media by Big Tech led us to conclude that extending FRAND terms to all gatekeeper services is needed. Gatekeepers have asked for this, and we have responded in kind by supplying ample evidence of unfairness across different business areas, including in the field of copyright,” said Iacob Gammeltoft, policy manager at News Media Europe.
For publishers, the fact that platforms can choose who to reach an agreement for using and remunerating content empowers them to decide who are the winners and losers of the media landscape, thus defeating the principle of the Copyright Directive.
At the same time, critics stress that the battle for having this sort of obligation in the Copyright Directive was fought and lost.
“It’s a circumvention of the Copyright Directive,” the first diplomatic source said, noting that this could introduce remuneration obligations that were rejected before, for instance, for cloud services.
The rightsholder might refuse the authorisation to use certain content and legally challenge the platform in case that is not respected. As a result, large platforms like Google and Facebook might set up automated negotiation mechanisms to obtain the approval of content providers.
A concern is if this could pave the way to double remuneration, both under the Copyright Directive and the DMA, as the text does not explicitly exclude that. By contrast, publishers note that given the very little revenue the Copyright Directive has generated so far, even one source of remuneration would be a success.
The proposal is likely to be made during the political trilogue on Thursday (24 March), which several EU officials said with confidence might be the last one. The question is how much support it will receive from the EU lawmakers.
Andreas Schwab, the Parliament’s leading negotiator, told EURACTIV no such proposal had been discussed with him. Asked whether he would support, Schwab said that “FRAND for me is not only on remuneration. See court case on the App Store Placement.”
[Edited by Alice Taylor]