New Leak Confirms: Brussels Has Learnt Nothing from Brexit

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Trying to Tax the Internet.

By Don Quijones, Spain & Mexico, editor at WOLF STREET.

The European Commission seems determined to make itself even more unpopular among Europe’s disaffected public. This is just about the only conclusion that can be drawn from its latest decision to steam ahead with plans to adopt a controversial ancillary copyright law — A.K.A. snippet tax — that would open the way for Big Media in Europe to charge news aggregators and other websites a special fee for linking to their works.

The Commission has repeatedly denied that it has any intentions of introducing such a tax. Just two days ago Commissioner Ansip state unequivocally: “This Commission does not have any plans to tax hyperlinks.”

It was a hugely disingenuous claim, as was confirmed by the publication on Friday of a leaked draft of the Commission’s own impact assessment on the modernization of EU copyright rules.

Business As Usual

In the document, the Commission clearly states that it intends to introduce an ancillary copyright for press publishers, giving them the ability to levy a fee (or tax) on links with accompanying short snippets of text. It may not be obligatory but it will set a very clear precedent: once the law is passed newspaper publishers across all 27 EU Member States will have the right to extract fees from sites that link to their works.

Citing dwindling revenues at news organizations, the Commission claims that failure to push on with such a policy would be “prejudicial for… media pluralism.” In other words, it will do whatever it takes to protect Europe’s established media from the cruel vagaries of a new market reality in which by and large the biggest winners are large US tech companies.

The fact that the same policy was rejected — not once but twice — by European Parliamentarians in last year’s copyright report is, much like the European Parliament itself, of little relevance. The policy was also shunned by over 37,500 Internet users in a recent public consultation.

But who cares?

Certainly not the Commission, which has shown once again that it has learnt absolutely nothing from the Brexit experience. It continues to legislate with no consideration for the public interest, serving the exclusive interests of the most powerful lobby groups in Brussels, while continuing to say one thing in public and doing the exact opposite in private. In other words, it’s business as usual in Brussels.

A History of Failure

The link tax is the brain child of EU Commissioner for Digital Economy and Society, Günther Oettinger, as we reported last year. Now his scheme could be on the verge of being unleashed across all 27 EU Member States, even though two of them — Germany and Spain — have already piloted almost identical schemes, with disastrous consequences.

The first country to introduce the link tax was Germany, in 2013. As the Electronic Frontier Foundation (EFF) notes, the law was a manifest failure since most publishers willingly forfeited their right to payment from Google as soon as they realized just how much traffic they would lose from not being indexed on news aggregators such as Google News. Now, three years on, not a single journalist or newspaper has received a single cent from the tax.

The Spanish government, under concerted pressure from Spain’s biggest media lobby, AEDE, went a step further, by installing a mandatory scheme instead of a voluntary one, with the result that even the news organization quoted is not permitted to waive it. In a perfect example of cartel economics at work, every link on a Spanish website was to be taxed every time it was used by a Spanish-based user, and the funds raised would go directly into the AEDE’s coffers, to be distributed as it — and its sponsors — saw fit.

The goal was clear: to insulate the traditional (and extremely loyal) gate-keepers of public information, the mainstream press, from the consequences of declining sales and shrinking relevance.

But then reality – in the form of a company called Google – got in the way. Refusing to be shaken down for providing a useful service to Spain’s newspaper publishers free of charge, the world’s most powerful tech firm suspended the Spanish edition of its news service. It also removed all links to Spanish newspapers from all its Google News sites around the world.

Big Media Changes Tune

It didn’t take long for the impact to be felt. In the last year and a half small publishers are estimated to have lost 14% of their Internet traffic as a result of the closure of sites like Google News and Planeta Ludico. Even some of the major media groups that initially lobbied for the measure to be passed are now begging for its repeal. They include Grupo PRISA, the owner of El País, Spain’s biggest selling newspaper, and the radio broadcaster Cadena SER, which announced that it won’t charge the fee, even though the law specifically states that it must. “Nobody likes the new law,” said PRISA’s CEO Juan Luis Cebrián.

For the moment Spain’s so-called Google Tax has raised no funds and nobody seems to have any idea how the fees will be collected or distributed. What is clear is that opposition to the law, even among those who initially lobbied for it, is intense and growing. Yet that hasn’t stopped the European Commission from trying to roll out a very similar scheme across the whole of Europe.

Clearly, forging ahead with the scheme will do little to improve the already rocky relations between Brussels and Silicon Valley, which, as the FT reports, are embroiled in fractious arguments over issues covering competition, tax, and privacy. But it’s the EU’s relations with the increasingly disaffected people of Europe that are most at risk. By showing, once again, utter contempt for their concerns, the Commission risks distancing itself even further from the people over whose lives it nonchalantly rules, just at a time that a rash of popular referendums and make-or-break national elections is about to be held in countries across the old continent. By Don Quijones, Raging Bull-Shit.

In the same vein, the ECB is expanding its Program of Financial Darwinism. Read…  Revealed: ECB Secretly Hands Cash to Select Corporations

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  18 comments for “New Leak Confirms: Brussels Has Learnt Nothing from Brexit

  1. A.L.
    August 28, 2016 at 4:11 pm

    Most of your reports are hard hitting and good, but this one is excellent: a true eye opener. I hope that it may be read widely (and Google-tax free) across Europe. :-)

  2. Tyler from Grand Rapids
    August 28, 2016 at 5:23 pm

    You know I gotta give it to them, most politicians won’t tackle the unpopular choices….. but taxing the internet, they are really asking for it lol.

    • BoyfromTottenham
      August 28, 2016 at 5:40 pm

      Hi from Oz. Aah, Tyler, you missed the key words “The European Commission” – which is not an elected (or apparently accountable) body, so they aren’t politicians as we know them. So what if taxing the Internet is unpopular and unworkable – they could care less. But it makes one wonder to whom they are really accountable, and what is their real agenda.

      • jan frank
        August 30, 2016 at 2:52 am

        Sorry to contradict you, but the EU commission has to be proposed by the EU Council. The Council is composed of the heads of the member states, who ARE elected. The members of the commission have to be approved by at least 50% of the MEPs.

        What you say is true in one sense, in that the commission is not DIRECTLY elected by the voters, but are chosen by people who have been elected by the voters. Just as the UK voters did not elect May DIRECTLY, but they did elect the people who chose May.

        • Georg
          September 1, 2016 at 9:57 am

          Yes, the EU commission is controlled by the council and the council is composed of the heads of the member states. But this arrangement plays the EU citizens for fools. What happens is, the heads of state in the council egg the commission on to push unpopular regulations they cannot get through their own parliaments and then during election years they blame the unpopular laws on the commission. And then they wonder why the citizens distrust the so-called European Project.

  3. Chip Javert
    August 28, 2016 at 6:18 pm

    What we’re seeing from the unaccountable & publicly unelected (to EU leadership offices) EU leaders is sheer power politics to maintain control over EU citizens.

    Europe is particularly susceptible to this behavior based upon centuries of being ruled by unaccountable & unelected aristocrats.

    It is encouraging to see actions like Brexit, but EU masters will fight to the end to maintain control.

    • Silly Me
      August 29, 2016 at 6:05 am

      It seems the same is true in the US; it’s ruled by an unaccountable and unelected aristocracy.

    • Dan Romig
      August 29, 2016 at 7:27 am

      Well stated Chip. The European Union is comprised of nation states who’ve given up their sovereignty to join the Union and be controlled by unelected power wielders.

    • Argus
      August 29, 2016 at 10:19 am

      Indeed. The way I see it heading is that it will be a medieval system of serfdom for the masses and great wealth and power for a handful of unelected overlords.

  4. Chicken
    August 28, 2016 at 7:58 pm

    Hubris has no bounds, truly. If you don’t believe it, just hang in there.

  5. BobT
    August 28, 2016 at 11:43 pm

    I am astounded that the EU elite cannot see that by their ridiculous behaviour they are committing political suicide. The days of the union are surely numbered and the reset will be incredibly messy. In parallel the future of NATO looks rocky too thanks to Trump, Turkey.

  6. Joe
    August 29, 2016 at 5:36 am

    Even though I’m an immigrant working in UK, glad that I voted Brexit.

  7. Kevin Beck
    August 29, 2016 at 6:31 am

    Rule #1 about speaking Bureaucrratese: Never believe a rumor until it’s been officially denied.

    Those morons in Bruxelles would prefer that Europe return to the days of buggy-whips. I’ll bet they have some really innovative models available for the generation that doesn’t bother with reading newsprint. I have some news for them that is fit to print: The world doesn’t need newsprint; there is such a thing as the internet, which is more a problem to you tech-phobes in Europe than it is to the real world.

    If you bureaucrats don’t wise up–quickly–you’ll be over-run with people invading from Asia and Africa, and soon you’ll end up as a petting zoo for the Chinese.

    • nhz
      August 29, 2016 at 10:08 am

      “If you bureaucrats don’t wise up–quickly–you’ll be over-run with people invading from Asia and Africa,”

      ?? seems to me the plan of the EU bureaucrats is that the invaders from Asia and Africa will keep them in power forever, if they manage to import enough of them …

      The only ones who will be over-run are the ordinary citizens of Europe, and we all know how much Brussels cares about those.

  8. Tom Welsh
    August 29, 2016 at 6:31 am

    “The link tax is the brain child of EU Commissioner for Digital Economy and Society, Günther Oettinger…”

    “Brain child”??? Surely some other body part altogether.

  9. Vooks
    August 29, 2016 at 3:03 pm

    Church of Latter Day Luddites

  10. d'Cynic
    August 29, 2016 at 3:13 pm

    Seem like EU bureaucrats do not have a good day today, so let me add a few historic pieces of my own:
    1. Project quore. The brainchild of EU bureaucracy to create a rival to Google. Congratulation if you manage to remember how to spell it, and figure out how to pronounce it. It is supposedly a latin for question, and no one know how the Roman pronounced such square word. With such obvious shackle from the get go, it is no wonder that we are googling, not quoring.
    2. Project Galileo. A project to rival GPS, and Glonass. The latter are dual use systems so there was a need to come up with the raison d’etre for the whole project, so it was declared to be become a better GPS, and wholy non-military. Right now, all commercial navigation devices I can buy use only GPS, and Glonass. Galileo for all intends and purposes is dead – no pun intended.
    3. An art project that was supposed to put all the exhibits in European museums and galleries online. Exciting indeed. Only on the launch day, the site crashed. However, that was the least of the problem. The site underwhelmed to say the least.

    With such obvious turkeys and more, it is no wonder that by the time the bureaucracy embarked on it’s own imperial projects, the money simply ran out.

  11. Randy
    August 29, 2016 at 10:26 pm

    “Citing dwindling revenues at news organizations, the Commission claims that failure to push on with such a policy would be “prejudicial for… media pluralism.”

    The joke is the aggregaters are driving more readers to their pathetic rags than they could attract on their own. I know I’ve read many odd-ball sites that I never would have found if it were not for Breitbart or Drudge.

Comments are closed.