Thanks to Angelo Aimar for collaborating on this article

The Italian Authority Communication Authority (AGCOM) recently issued a first of its kind resolution1, shedding light on the fair remuneration due by media monitoring agencies to publishers for the online use of the latter's press publications. This Resolution provides useful insight on relevant aspects of this newly established procedure.

Legal Background

The Resolution was adopted between a media monitoring agency (the "MMA") and a publishing group for the determination of the fair remuneration due in relation to the online use of their press publications.

At the outset, AGCOM summarized the applicable legal framework and the factual background underlying the Resolution. AGCOM referred to resolution no. 3/23/CONS, by which the Authority adopted the regulation for the identification of the reference criteria to quantify the fair remuneration due to publishers by ISSPs (information society service providers) and MMAs for online use of their press publications (the "Regulation").

Under the Regulation, if the parties fail to reach an agreement on the amount of fair remuneration within 30 days of a request to initiate negotiations, each may apply to AGCOM for the purpose of determining it. AGCOM has the power to choose between the parties' economic proposals or ex officio determine the amount of fair remuneration.

For criteria to establish the amount of fair remuneration, AGCOM cited Article 6 of the Regulation (bearing in mind this is a specific provision, distinct and partially different from the provision on ISSPs). Such Article stipulates that renumeration shall be determined on the basis of the MMA's relevant turnover from activities in any way related to media monitoring and press review, while also taking into account the following criteria, to be considered cumulatively and in order of declining importance:

  1. number of articles reproduced in the press review, including through compilation of articles or a media monitoring service, in the reference year;
  2. actual number of subscribing end-users;
  3. benefits derived from the publisher's position in the reference market assessed in relation to the contractor's interests;
  4. number of journalists, as categorized under national collective bargaining agreements, employed by the publisher;
  5. years the publisher has been active, based in part on the newspaper's history in the national and local market.

Factual background

With respect to the relevant factual and procedural background, AGCOM reported that the parties had engaged in negotiations and both formulated their own economic proposals without reaching an agreement. This triggered the procedure in question. Interestingly, in a sign of the unique character of the Italian market, the application was filed by the MMA rather than the rightsholder.

Furthermore, AGCOM asked the publisher to formulate another economic proposal containing detailed components and to indicate the average number of journalists employed by the newspapers over the last two years; the year each newspaper was founded (there were multiple newspapers involved in the same proceedings); the circulation and online audience for each newspaper over the last two years; and any other information that might be useful in determining fair remuneration.

Notably, during the proceedings AGCOM issued a few requests for information, including to third parties, in a bid to gather information it deemed relevant for the purposes of determining fair remuneration.

AGCOM's process for determining fair remuneration

AGCOM then described the business model of MMAs in general and noted that determining fair remuneration must provide adequate incentives to promote the quality of information on press publications, as this is essential for the exercise of fundamental rights.

With regard to the relevant market for MMAs, AGCOM noted their annual aggregated turnover and maintained that determination of fair remuneration must take into consideration the market's size and its evolution over time. In addition, AGCOM looked into the gap between the Italian market for MMAs and those in other European countries, such as France, the United Kingdom, and Germany. The latter have much higher market value.

AGCOM determined that the basis for calculating fair renumeration should be the relevant turnover of the MMA deriving from related business activities. According to AGCOM, these activities include all activities related to the processing, reproduction, and dissemination of press publications. This definition is meant to identify revenue that is relevant for calculating fair compensation, including all activities related to media monitoring and press reviews, but exclude revenue unrelated to the use of press publications. In addition, the Resolution specifies that costs incurred by the parties cannot be deducted from the basis.

Notably, AGCOM found that the relevant turnover of the MMA in question derived from the latest available financial statements, but the activities relevant for the purposes of calculating fair remuneration were only those related to press review made through the MMA website, and not press review made through social media. In addition, AGCOM found that press content on social media consists of reposts of content available in digital versions of the newspapers, and since this content was already included under the website press review, a double taxation would not be justified. Finally, AGCOM addressed each of the criteria of Article 6 of the Regulation listed above.

Since the parties did not reach an agreement and neither of their economic proposals was deemed appropriate, AGCOM determined the amount of fair remuneration to be paid by the MMA (though the actual figure was omitted from the published version of the Resolution). AGCOM also noted that if the parties fail to enter into the relevant agreement, each may take legal action in court.

Conclusions

The Resolution is an interesting first application of the provisions implementing in Italy Article 15 of the DSM Copyright Directive and provides useful insight from at least two perspectives. First, from a procedural standpoint, the Resolution tries to make sense of how the procedure works generally in practice, including use of AGCOM's investigative powers and the almost impossibly tight deadlines provided under the Regulation for testing. Second and more significantly, the Resolution offers an outlook on a unique aspect of the Italian news publishing market: the role of media monitoring and press review agencies that are only mentioned in Recital (54) of the DSM Copyright Directive and yet expressly covered in the Italian transposition. It remains to be seen, however, how AGCOM will apply the Regulation to ISSPs, and how courts will interpret the new, relevant framework if employed.

Footnote

1. Resolution no. 221/23/CONS (the "Resolution")

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.