On October 8, 2020, the Paris Court of Appeals dismissed the appeal brought by Google against an interim measures decision issued by the FCA on April 9, 2020 in favor of publishers unions Syndicats des éditeurs de la presse magazine and Alliance de la presse d’information générale, and news agency Agence France Presse. It thereby approved the FCA’s third interim order against the tech giant in a decade. Pending the FCA’s decision on the merits, the Court of Appeals’ order addresses Google’s refusal to engage in negotiations with news publishers and agencies to determine an adequate remuneration for the exploitation of their copyright-related rights.
In April 2019, in order to address the structural crisis faced by the press industry, particularly as a result of digitization, the European Union adopted the Copyright Directive, which created a sui generis exclusive right for news publishers to authorize (or prohibit) the reproduction, communication and public availability of their content. As a result, extracts of protected content can no longer be displayed by information society services without prior authorization from news publishers, including an agreement on their remuneration or lack thereof. These rules were transposed into French law by Law no. 2019-775 of July 24, 2019, which came into force on October 24, 2019 (the “French Law”).
A month before the entry into force of the French Law, Google announced that it would only continue to display the protected content of publishers who had agreed to grant it a free license for said display. This prompted complaints to the FCA by news organizations, quickly followed by the interim measures decision of April 9, 2020. These interim measures, which are applicable until the FCA issues a decision on the merits, require Google to negotiate in good faith with any news publishers and agencies that request remuneration for the use of their protected content. In addition, during negotiations, Google must refrain from altering the referencing of the protected content on its search engine. Google also cannot undermine the effects of negotiations by requiring publishers to use some of its services or otherwise affect its other economic relations with publishers.
On appeal, the Court considered that the conditions required to impose interim measures had been met and therefore largely upheld the measures.
The Court of Appeals’ assessment
First, the Court considered, in line with the challenged decision, that Google’s unilateral decision to change its display policy shortly before the entry into force of the French Law did amount to the imposition of unfair trading conditions under Articles L. 420-2 of the French Commercial Code and 102(a) of the TFEU. In this respect, the Court rejected Google’s argument that it had merely made use of short extracts, which are excluded from the protection granted by the Copyright Directive. The Court held that Google could not rely on this exception as a general rule to avoid negotiations with news publishers.
Second, the Court found that Google’s conduct was likely to negatively impact both (i) news publishers and agencies, observing, in particular, that the removal or demotion of content had caused a sharp decrease in traffic for publishers who had refused to license their protected content for free, and (ii) those of Google’s competitors who had agreed to remunerate news publishers for the use of their content.
Third, the Court confirmed the existence of a risk of serious and immediate damage to the press sector. Google’s conduct indeed forced news publishers to choose between losing financial resources by granting Google free licenses or forgoing a large share of their online revenues as a result of demotion, frustrating the very purpose of the French Law.
As a result, the Court considered that the interim measures were necessary to guarantee equitable transaction conditions until the adoption of a decision on the merits.
In its defense, Google notably claimed that the interim measures were disproportionate. In particular, it contended that the measures wrongly granted publishers a guaranteed right to remuneration and were structural in nature, altering its gratuity-based business model and infringing its fundamental freedoms. However, the Court rejected these arguments and found that the FCA did not impose any obligations of payment. While the interim measures require Google to make an offer for adequate, objective and transparent remuneration, said remuneration can be equal to zero should the content not generate revenues or require any particular investments. The Court here appears to establish a subtle, albeit arguably artificial, distinction between the obligation to pay content providers, and the obligation to extend a binding offer for the remuneration of content.
The Court therefore confirmed the analysis of the FCA, modifying only slightly the fifth interim measure to clarify that the injunctions are without prejudice to Google’s right to roll out enhancements, as long as it does not directly or indirectly harm copyright-related rights holders.
Interim measures as a solution to the difficulties of regulating digital markets?
Over the past few years, regulators across Europe have engaged in an in-depth discussion about how to effectively regulate digital markets. Competition authorities often struggle to intervene before market conditions become too distorted and before dominant companies tip markets. One of the solutions often put forward is to make greater use of properly designed interim measures. This was recommended, for instance, by the UK and German Expert Panels. The European Commission has certainly heard these calls, as evidenced by the fact that, last year, it imposed interim measures for the first time in nearly two decades. Executive Vice-President Vestager also indicated that the Commission would not hesitate to impose interim measures or remedies that go beyond cease-and-desist orders.
For its part, the FCA has already been strongly relying on interim measures. Since 2007, it adopted 16 interim measures orders, three of which were ordered against Google. Occasionally, these decisions go further than mere cease and desist orders, and the latest FCA order is particularly far-reaching. Indeed, it requires Google to engage in negotiations, which must result in a fair offer for remuneration, and during which Google is not permitted to demote protected content.
Following the decision, Google announced that its priority remained to reach an agreement with French news publishers. Failure to comply with the interim measures would expose Google to fines of up to 10 percent of its global turnover, and daily fines of up to 5 percent of its daily global turnover until it complies with the injunction.
On November 19, 2020, although negotiations are still ongoing with a number of publishers, Google announced that it had come to an agreement with several major French news organisations.
 Paris Court of Appeals, ruling of October 8, 2020, no. 20/08071.
 FCA Decision no. 20-MC-01 of April 9, 2020, regarding requests for interim measures filed by the Syndicat des éditeurs de la presse magazine, the Alliance de la presse d’information générale and others and Agence France-Presse.
 Directive (EU) 2019/790 of the European Parliament and of the Council of April 17, 2019 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC (the “Copyright Directive”).
 Article 15 of the Copyright Directive.
 The display of hyperlinks and isolated words or very short extracts is however excluded from that protection.
 The law resulted in the creation of articles L.218-1 to L.218-5 of the French Intellectual Property Code.
 The fifth measure ordered Google to leave the publishers’ referencing, ranking, and displays unaltered during the three-month negotiation period.
 Report of the Digital Competition Expert Panel chaired by Professor Jason Furman, Unlocking digital competition, March 13, 2019, pp. 20 and 110.
 Report by the Germany Competition Law 4.0 Expert Panel, A new competition framework for the digital economy, September 9, 2019.
 Commission Decision of October 16, 2019 in case AT.40608, Broadcom.
 Answer given by Executive Vice-President Vestager on behalf of the Commission on April 6, 2020, to Parliamentary question number E-000591/2020.
 In addition to the case at hand, see FCA Decision no. 19-MC-01 of January 3, 2019, regarding a request for interim measures filed by Amadeus and FCA Decision no. 10-MC-01 of June 30, 2010, regarding a request for interim measures filed by NavX.
 Le Monde, Droits voisins : accord entre Google et plusieurs médias français pour rémunérer les extraits d’articles dans le moteur de recherche, November 19, 2020.