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Has the German government’s Leistungsschutzrecht just protected the Internet by mistake?

1 Mar

This is a reprint  from ORGZine which is an online magazine affiliated with the Open Rights Group. The original is available here.

German newspapers have been lobbying for a change to German copyright law for several years. They think that search engines and news aggregators like Google News threaten their businesses by reproducing their content without permission. Google News shows its users links to newspaper articles, a 240 character snippet of those articles.

Google argues that they’re increasing the amount of people who visit newspapers’ websites and see the adverts on those sites. Google doesn’t sell any adverts for its Google News pages. German newspaper groups, including Axel Springer – a News International-style corporation – think that Google and others should pay a licence fee if they want to put links and snippets of articles on sites like Google News.

Germany’s coalition government of Angela Merkel’s Christian Democrats and the Liberals proposed in their 2009 coalition agreement to pass a law to “improve the protection of press products on the Internet.” They then introduced a Bill in November 2012 (often referred to as Leistungsschutzrecht or ancillary copyright) saying that websites would have to pay for a licence if they wanted to show links to or snippets of publishers’ copyrighted content just like the newspaper groups had asked for.

Internet advocacy groups like Digitale Gesellschaft ran campaigns against the Bill as did Google with its Defend Your Net campaign and Wikimedia Deutschland. Despite those campaigns and the opposition of the Social Democrats, the Greens and the Left Party, the German Parliament passed the Bill this morning. Victory for the newspaper publishers then. Actually, no.

There had been last-minute changes to the Bill which actually allowed websites to show short snippets of copyright text without paying a licence fee. Websites that want to use longer extracts or an entire article will still have to pay a fee. The Bill has done a complete about-turn and the German Parliament has in fact legislated to protect Google News’ model.

The easiest conclusion to draw is that the German government just hasn’t realised what it’s done. It’s legislated to allow Google and others to continue what they’re doing anyway. Even though their instincts seem to be to ensure that newspapers can continue with their current outdated business models, the German government has passed a law which may well ensure that newspapers have to change the way they make money.

Whether that’s what the German government intended or not, we should hope that the newspaper publishers dedicate their efforts to developing a business model that doesn’t rely on Governments passing laws that cripple the internet. Getting people to pay for the privilege of increasing another site’s traffic and advertising revenue just doesn’t make any sense and it discourages innovation. The newspapers should concentrate on doing some innovation themselves and work out how they can use the Internet to make money without charging those who want to link to their articles.

If the German newspaper industry wants to carry on pushing for licences for links and snippets then they’ll come up against dedicated opposition from Digitale Gesellschaft, Wikimedia and others again and again.

Capitalism in the Offline and Online Worlds: the Domination of Tesco, Facebook and Google

29 Sep

Nothing particularly ground-breaking here. Just some thoughts that’ve come to me in over the last few days on the similarities between the development of the domination of supermarkets in the modern retail industry and that of Facebook and Google in online social media and services. (I’m trying to take away the pressure to write something particularly insightful when I post and accept that it’s ok to make mistakes in public.)

Facebook announced this week that users of online music streaming services like Spotify will soon be share or every song they listen to to Facebook automatically, so-called frictionless sharing. I’ve used a similar service for years called Last.fm which is owned by CBS. Every song I listen in Spotify or my desktop music player foobar2000 to is sent to Last.fm, who then build a picture of my listening habits and recommend music I’d probably like. I’ve found countless new bands this way and it’s only been possible because lots of other people with similar listening habits use the service too. It’s one of my favourite web services.

Facebook has about 750 million users while Last.fm has about 40 million. Facebook is in a very strong position to become dominant in yet another aspect of online life. Facebook already offers many services within one website. which other  websites and mobile apps focus entirely on: location sharing (Foursquare and Gowalla), instant messaging (countless services), surveys and questions (Ask MetaFilter etc, Survey Monkey) and so on. A similar observation could be made of Google who have a huge array of products and services.

What strikes me about this is how similar this is to the relationship between supermarkets and independent traders. Supermarkets like Tesco offer everything from fruit and vegetables to laptops. Independent traders sell either fruit and vegetables or laptops. Speaking recently on the ‘Tesco-isation’ of Britain, the Labour leader Ed Miliband commented

I think it is a problem that people think the character of their local high street is being changed and they have no power against big corporations in this country.

In its report The Guardian made the point that

Labour…has to make a judgment on whether the big four [Tesco, Sainsbury, Asda and Morrisons] dominate simply because they are popular and more efficient, or because they can stifle competition and choice.

The same questions need to be asked about the domination of large internet companies like Facebook and Google. Is it in the interests of the online public for small companies offering specific services to be dominated by much larger companies who can offer a myriad of services?

I haven’t completely made up my mind on that yet. The concentration of shopping and online activity on companies who offer lots of services within the same site or building do seem to be the effect of the same phenomena though. I made a similar point a while ago here where I said

In the same way that small, independent shops are going out of business because customers find it easier and more efficient to go to large shopping centres to do their shopping, internet users have turned from complicated HTML sites, to slightly less complicated Myspace pages and finally to the easy-to-use Facebook to create their online identity. What both of these phenomena have in common is a societal shift towards a more market-friendly behaviour.

Supermarkets are more similar to Facebook and Google than shopping centres but my general point is the same. The effects of capitalism of companies driving towards making efficiencies by reducing costs and of increasing profits by expanding into different markets apply to the online world just as they do in the offline world. This is having effects on small internet companies just as it does to small traders on the high street.

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