Jonathan Band and Sean Flynn

Next week, the Australian Parliament is set to vote on the “News Media and Digital Platforms Mandatory Bargaining Code” (“Code”). The Code has been a top lobbying priority of Rupert Murdoch’s News Corp, which dominates the news industry in Australia. The Code is incredibly worrisome from an international copyright law perspective, as it is the latest attempt to tax quotation rights protected by the Berne Convention. According to a newly published analysis by two leading international copyright scholars, enactment of the Code would likely violate Article 10(1) of the Berne Convention.  

The Code Compared to DSM Article 15

The Code is the latest example of an effort to tax Internet platforms through a levy on their quotations, paid to news publishers. Countries, of course, have the ability to tax companies that do business within their borders. But these so-called “snippet taxes” operate more like an extra copyright duty to license mere quotations, and as such appear to violate Article 10(1) of the Berne Convention.

Australia’s proposal is loosely modeled on one of the most controversial provisions of the 2019 EU Digital Single Market (“DSM”) Directive. Article 15 of the DSM granted “publishers of press publications” exclusive rights normally held only by authors under copyright “for the online use of their press publications by information society service providers.” Because the rights are given to publishers, rather than authors, this right is referred to as a “related” or “neighboring right.” Article 15 is currently being litigated for alleged infringement of free expression and other rights protected by the EU Charter of Fundamental Rights.[1] One question that has yet to be decided in the EU is the extent to which this new press publisher’s right can force licensing of mere quotations of content that would normally be a free use under copyright.

Australia’s proposed Code is far more disruptive.

1) The protection for press publications provided by DSM Article 15 does not apply to linking or the use of “very short extracts.” The Code explicitly applies to linking and the use of extracts of any length. Accordingly, the Code applies to search engines and social media feeds, not just news aggregation services.

2) The Code forces Internet platforms to bargain collectively with news publishers or to be forced into rate setting through binding arbitration. DSM Article 15 does not require any similar rate-setting mechanism.

3) The Code imposes burdensome obligations on the platforms, some of which directly implicate free expression. For example, platforms would need to provide news businesses with ability to “turn off” comments on individual stories they post to digital platforms. DSM Article 15 imposes none of these obligations.

4) The Code prohibits the platforms from differentiating between an Australian news business and a foreign news business. This provision prevents platforms from exiting the market by taking care not to link to Australian news content. If the platform links to international news content, e.g., articles from the New York Times, it must also link to (and therefor pay for) Australian news content. DSM Article 15 does not contain a non-differentiation provision.

Many of these elements will clearly implicate free expression rights in Australian and international law.[2] But a recent book by two top international copyright scholars suggests another reason the Code may be held to be unlawful–it violates the Berne Convention’s right of quotation.     

The Code Violates the Berne Convention

Article 10(1) of the Berne Convention provides that:

it shall be permissible to make quotations from a work which already has been lawfully made available to the public, provided that their making is compatible with fair practice, and their extent does not exceed that justified by the purpose, including quotations from newspaper articles and periodicals in the form of press summaries.

Australia is a member of the Berne Union and accordingly is subject to this provision. A new book by Tanya Aplin and Lionel Bently, Global Mandatory Fair Use: The Nature and Scope of the Right to Quote Copyrighted Works, argues that press publisher rights that have the effect of preventing, or charging for, quotations violates Article 10(1).

Aplin and Bently engage in a detailed analysis of the implications of Berne Article 10(1)’s mandatory nature. Members of the Berne Union must permit the free quotation from copyrighted works. But the EU and Australia press publisher rights are not literally copyright. They are related rights. The question is thus raised as to whether countries can circumvent the Article 10(1) quotation right via a regime that is not copyright law per se. According to Aplin and Bentley, the right to quote in Berne Article 10(1) cannot be legally evaded in this manner.

Aplin and Bently analyze the EU press publisher right and directly ask whether “the mandatory rule under Berne carries with it an ancillary obligation for the holder of such a related right to permit quotation.” (Aplin & Bentley at 53). They answer in the affirmative:

in any situation where a quotation of an underlying work cannot be effected without involving the related or other right, the Member State is obliged to ensure that the related right does not restrict or inhibit the ability to exercise the quotation right. The freedom granted by Article 10(1) Berne is preemptive.

Id. at 53-54.

Aplin and Bently thus conclude that EU Member States must recognize the right to quotation protected by Berne Article 10(1) as an exception to the press publication right. Member States, they argue, must “allow for the exercise of the mandatory freedom to quote works under the Berne Convention” as an exception to the EU press publisher right. Id. at 54-55. Aplin and Bently elaborate:

in any situation where a person proposes to quote from a published authorial work such as a newspaper article, cartoon or photograph, the press publishers’ right may not be invoked to restrict or prevent such lawful quotation. Were it to do so, there would be a breach of Article 10(1) Berne.

 Id. at 55.

As discussed above, the Code is far more restrictive than DSM Article 15. Aplin and Bently’s analysis concerning DSM Article 15 thus applies a fortiori to the Australian Code. In other words, the Code’s requirement for a digital platform to remunerate a news business for the use of extracts of any length or linking violates Article 10(1) of the Berne Convention, under the analysis offered by Bently and Aplin.[3]

Trade Remedies?

Berne itself does not have a complaint mechanism. But the Berne obligations are incorporated in the World Trade Organization’s Agreement on Trade Related Intellectual Property Rights and in the Australia-U.S. Free Trade Agreement. Each of these trade agreements permit dispute resolution that the U.S. could engage to challenge the Australian Code should it come into effect. The WTO provisions could also be used to challenge Article 15 of the EU DSM should it be implemented to require remuneration for mere quotations protected by Berne. Whether the Biden administration will take on such issues in its evolving trade agenda remains to be seen.

[1] Liptak, Andrew (25 May 2019). “Poland has filed a complaint against the European Union’s copyright directive”. The Verge. Retrieved 27 May 2019.

[2] See Nationwide News Pty Ltd v Wills (1992) 177 CLR 1; Australian Capital Television Pty Ltd v the Commonwealth (1992) 177 CLR 106 (recognizing implied freedom of expression right as incident of the system of representative government established by the Constitution); accord Unions NSW v New South Wales [2013] HCA 58.

[3] See Spiegel Online v. Volker Beck, C 516/17 (2019) (equating a hyperlink with a quotation).