EU Court rules fair compensation for publishers over online use of press content is legitimate

Brussels – EU Member States may provide that newspaper publishers are entitled to fair remuneration when they grant online service providers – such as social media platforms – authorisation to use their publications. This was established by the Court of Justice of the EU in the context of an appeal brought by Meta against a decision by the Italian Communications Authority (AgCom), which, in 2023, on the basis of national law, defined the criteria for determining fair remuneration for the online use of press publications by information society service providers.

According to Meta, however, the Italian legislation, which establishes a framework to ensure fair remuneration for the online use of press publications, infringes the EU framework concerning publishers’
rights in the Digital Single Market. In particular, the US multinational contested the compatibility of AgCom’s decision and the Italian law with the freedom to conduct a business guaranteed by the Charter of Fundamental Rights of the European Union. It therefore lodged an appeal with the Lazio Regional Administrative Court seeking the annulment of the measure, and, in this context, the Italian court asked the Court of Justice to assess the compatibility of the national legal framework with EU law. 

However, it is clear from the Court’s ruling that Rome has simply transposed the EU Directive on copyright in the digital single market and that this does not infringe any other EU provisions. 

The starting point is that “developments in digital technologies have drastically reshaped the media industry, in particular that of the written press”, leading to “a sharp drop in publishers’ revenues, jeopardising their business model and undermining their
crucial role in democratic societies.” To remedy this situation, the Court noted, various legislative initiatives have been launched, including the Directive on Copyright in the Digital Single Market, which introduces a right for newspaper publishers regarding the online use of their publications by information society service providers. 

Therefore, the Italian legislature transposed that directive by providing publishers with a right to fair compensation for the online use of their publications and establishing a system to ensure that compensation. In practical terms, Italian law requires service providers to negotiate remuneration with publishers, without restricting the visibility of content in search results during negotiations, and to provide the data necessary for its calculation. It also entrusts AgCom “with the task of setting the criteria, determining the remuneration in the event of disagreement, and ensuring compliance with the obligation to provide information incumbent on service providers, including through penalties.”

Accordingly, the Court of Justice states in its judgment that “the right of publishers of press publications to fair remuneration is permissible, provided that such
remuneration constitutes consideration for the authorisation granted to providers to reproduce those publications.” In other words, it must be an agreed sum. Furthermore, “publishers may refuse to grant such authorisation or may
grant it free of charge” and “no payment may be required from providers when they do not use such
publications.” It will now be for the national court to determine whether Italian legislation complies with these conditions.

 Finally, according to the Luxembourg judges, the obligations imposed on suppliers to enter into negotiations with publishers, without limiting the visibility of content in
search results during that time, and to provide the data necessary to calculate the compensation, “while they restrict the
freedom to conduct a business, appear to be justified, in so far as they contribute to the EU law objectives of achieving a
well-functioning and fair marketplace for copyright and allowing publishers to recoup their investments.” According to the Court, such obligations, “which strengthen the protection afforded to publishers, make it possible to strike
a fair balance between the freedom to conduct a business, on the one hand, and the right to intellectual property and the
right to freedom and pluralism of the media, on the other.”