The Case of Google ‘Snippets’: An IP Wrong that Competition Law Cannot Fix

Abstract

Digitization of the news industry has increasingly stressed the revenue generation of publishers. While there is unanimity on the need for policy intervention to ensure the viability of publishers in the digitized world, choosing the correct policy tool is critical. With the objective of ensuring adequate and equitable incentives to publishers, the EU created neighboring rights in ‘snippets’, expecting information society service providers to seek licenses from publishers against monetary remuneration for using their works. Contrary to the expectation, however, Google, the dominant search engine, refused to use ‘snippets’ unless provided for free. This brought claims of abuse of dominance against Google. This paper breaks this scenario into two parts: it first shows, by referring to the design rights in spare parts debate in the EU, that the creation of neighboring rights in ‘snippets’ was unjustified in the absence of any market failure triggered by free-riding; subsequently, by analyzing the contrary stances of the German and the French competition authorities, it shows the limited ability of competition law to hold Google’s behavior illegal. Thus, the paper shows that the choice of policy tool to incentivize publishers by creating a new IP right was flawed.

Keywords: Digital markets, neighboring rights, ‘snippets’, Google, abuse of dominance, exploitative abuse

JEL Classification: K21, L40, L82, O34