Global Economics

Belgian Court Deals Google a Bombshell


Publishers who sued the Internet giant for copyright infringement have won their case. A one-off glitch—or the end of search-engines as we know them?

It has all the makings of an epic David vs. Goliath battle: A band of scrappy Belgian publishers, citing copyright infringement, have taken on Google and emerged victorious. On Feb. 13, a Belgian court said the search giant could not reproduce certain copyrighted titles and summaries on its Belgian Google news or Google.be Web site. What's more, the Mountain View (Calif.) company must pay €25,000 a day ($32,500) until it removes all related content. Google says it will appeal.

At first glance, it might be easy to dismiss the case as a one-off. After all, the ruling only applies to French- and German-language publications in Belgium, including Le Soir and La Dernière Heure, that are represented by Brussels-based copyright group Copiepresse.

But if the Belgian case is upheld, or if similar cases are filed and won in other jurisdictions, it could have radical implications for Google (GOOG). "A lot of the value of the [Google] service is its comprehensive nature," says Frédéric Louis, a partner at the law firm Wilmer, Cutler & Pickering in Brussels. "The more national exceptions you have to make, the more it loses that value."

An Internet in Disarray

Indeed, the search powerhouse has traditionally taken a very aggressive position on copyright, citing the principle that "fair use" allows it to use snippets of material and a link to the full story on the copyright-holders' sites, says Lee Bromberg, an intellectual property attorney at Bromberg & Sunstein in Boston. "The Belgian ruling suggests that…they're going to have to be more compromising," Bromberg says. "That's a pretty serious wake-up call."

And it's not just a wake-up call for Google. That's because the entire concept of search indexing and news aggregation relies largely on compiling Web pages and online content for free. "I think if the Belgium decision holds up on a broader basis the whole Internet will be thrown in disarray," says Mark P. Kesslen, an attorney with Lowenstein Sandler who chairs the firm's intellectual property group. "Go to Yahoo! news; go to any of the sites that are an aggregator of content, and they are not getting approval."

No question, search engines and portals direct vast amounts of traffic to Web sites. But the Copiepresse case underscores publishers' concern that, while their sites may get more visitors thanks to Google and the like, it's the news aggregators who take more of the revenue. In many cases material is being reproduced outright, with no return to the copyright owner. Copiepresse has also accused Yahoo! (YHOO) of copyright violation, and Microsoft's (MSFT) MSN has also landed in hot water with some Belgian newspapers.

Not Even Summaries

"All publishers are worried that they have developed too great a dependence on portals, which now makes it hard to oppose them and get a fair deal," says François le Hodey, chief executive of Brussels-based publisher IPM, which puts out La Libre Belgique and other publications and is represented by Copiepresse. "It's time to say 'hold on' and take some time to establish the rules of the game."

To be sure, Google News doesn't reproduce entire articles. Instead, it posts news summaries and includes links to the full articles on the original site. But the Belgian group argues that even Google's use of headlines and story summaries violates copyright law.

The Belgian papers aren't alone in taking issue with Google. Two years ago, Agence France-Presse filed a suit seeking damages after Google put photos and story snippets from the French newswire on its news search page. The case is still pending and Google has dropped AFP content in the interim. Google has also run into trouble with publishers and authors over the scanning and digital reproduction of books. (The McGraw-Hill Companies, parent of BusinessWeek.com, is among them.)

Defining Fair Use

Google said in a statement that it believes its news service is entirely legal and that it was "disappointed" with today's judgement, which affirms a preliminary ruling last September (see BusinessWeek.com, 9/27/06, "Google in Tussle for Digital Rights"). Google has long held that any publisher not wanting to be indexed on Google News can opt out, or use a tool called robots.txt, which enables publishers to block items from being indexed.

Le Hodey of Copiepresse believes the ruling could embolden other publishers that operate under EU copyright directives to initiate proceedings against Google, Yahoo!, and MSN. Perhaps, but copyright laws aren't harmonized across the EU. For example, the concept of what constitutes "fair use"—usually sufficient acknowledgment of authorship—is more elastic in some countries than in others.

While some copyright holders are bound to try to exploit the ruling, "it would be a consumer tragedy if [the decision] became globally accepted," says Scott Devitt of Stifel Nicolaus & Co., who views the ruling as a one-off. "I think that Google will do what it needs to do to set it straight."

That seems to be exactly what Copiepresse wants. While some papers are happy to get whatever exposure they can from being included in Google News, le Hodey says most are eager to establish a more rewarding arrangement. "Finding a fair deal is in everyone's interest," le Hodey says. "The portals need content, and to keep producing that quality content, while we the publishers need to keep reinvesting in the publications that generate it."

With Dan Carlin, Robert Hof, and Catherine Holahan

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