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Google Fiasco: A Call for Reform in Italian Intellectual Property Law

Google Fiasco: A Call for Reform in Italian Intellectual Property Law

By Andrew L. Boughrum
The Digest, Chief Form and Accuracy Editor

In late November, 2010, the Italian Competition Authority and the European Commission, the European Union’s antitrust watchdog, began an investigation into Google’s alleged abused of a dominant position in the online search market in violation of Article 102 of the Treaty on the Functioning of the European Union (TFEU). Formal proceedings were commenced against Google following complaints from search service providers regarding unfavorable treatment of their services in Google’s unpaid and sponsored search results, as well as preferential placement of Google’s own services.

Among those upset with Google’s business practices was Italy’s Federation of Newspaper Publishers, which accused Google of lacking transparency in the handling of the ranking process of Google News. The Federation alleges that its members were unable to remove articles from the Google News service without pulling them out of Google’s main search engine. The Federation claims that this is an abuse of Google’s dominant market position. If the Federation members were to pull their articles from Google News, they would also be excluded from Google’s search results page, costing these members significant advertising revenues.

The investigation into Google’s alleged anti-competitive practices was closed January 17, 2011 when the company reached an agreement with the Italian Competition Authority to comply with more stringent rules regarding the rankings on its new search engine. Pursuant to this agreement, Google is to allow online publishers a greater amount of control over their content published on Google news. Specifically, Google has now made it easier for publishers to quit Google News without affecting their search results. Further, Google is also to make the news rankings and online advertising profits more transparent. Finally, Google has agreed to disclose the revenue-sharing arrangements for partners of its Ad- Sense program, under which Google directs advertising to other websites.

While Google has stated that they are in compliance with Italian and European Union competition laws, they are aware that there will always be ways to improve their services and business practices. Apparently, it was this understanding that led to Google’s cooperation with the Italian Competition Authority in quelling these allegations.

In response to this investigation, the Italian Competition Committee submitted a report to the Italian government calling for major reform in copyright laws. The committee seeks to pave the way for online publishers to earn more money from the use of their content by others, such as Google. In a statement, the Authority explained that “A national law that defines a system of intellectual property rights on the Internet can encourage virtuous forms of cooperation between owners of exclusive rights to editorial content and service providers that reproduce and develop innovative content protected by such rights. Thus, while the concerns that enveloped the Italian Competition Committee and the European Commission have been pacified, it has yet to be seen what will result from the Competition Committee’s report to the Italian Parliament calling for comprehensive Copyright law reform.

For more information, please see:

James Kanter, Europe Inquiry Focuses on Google Business Practice, N.Y. TIMES, Jan 13, 2011, available at http://www.nytimes.com/2011/01/14/technology/14google.html

Eric Pfanner, A Google Worry Recedes, for Now, as Italy Ends Investigation Into News Service, N.Y. Times, Jan 17, 2011, available at http://www.nytimes.com/2011/01/18/technology/18iht-google18.html

“EU launches antitrust probe into Google’s online search dominance,” available at http://english.cntv.cn/20101201/102615.shtml

“Italian antitrust body closes probe on Google’s dominance abuse with stricter binding commitment,” available at http://english.cntv.cn/20110118/101250.shtml