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Gedi vs Microsoft, Agcom sets fair compensation for online content: $780,000 for two years

Calculated the amount of fair compensation due from Microsoft for the online use of Gedi Gruppo Editoriale's journalistic publications on the Bing search engine

25 July 2024

3' min read

The Council of the Communications Guarantee Authority - reads an Agcom note - at its meeting yesterday resolved, with commissioner Elisa Giomi voting against, the amount of fair compensation due from Microsoft for the online use of the journalistic publications of Gedi Gruppo Editoriale SpA on the Bing search engine. The amount paid to the publishing group, according to Sole 24 Ore, is $780,000 for the two-year period 2021-2022. Microsoft must therefore pay Gedi this amount for the online use of the publishing group's journalistic publications on the Bing search engine.

This is the first such measure taken by the Authority, in application of the regulation it adopted in January 2023. It is 'the first measure involving an information society service provider (Microsoft) other than media monitoring and press review companies', the note explains.

The fair compensation owed to publishers, as set out in the Agcom regulation at the beginning of the year, was decided by Agcom by applying various criteria such as, to give just one example, the advertising revenue recorded by the provider deriving from the online use of the publisher's journalistic publications, net of the publisher's revenue attributable to the redirection traffic generated on its website by the journalistic publications used online by the provider.

The Agcom regulation on fair compensation transposes the European Copyright Directive. It states that publishers of journalistic publications must be paid fair compensation for the exploitation of their content. Moreover, in April, the Council of State, in a decision that represented a victory for Agcom and Fieg in the legal dispute with Meta-Facebook, overturned the decision of the TAR that had suspended the AgCom regulation on fair compensation.

Fair compensation fixed

This is the first measure adopted by Agcom involving an information society service provider other than media monitoring and press review companies. "The Authority, in accordance with the procedure governed by the Regulation set out in Resolution No. 3/23/CONS," reads the note, "assessed the economic proposals made by the parties and found that none of them complied with the criteria set out in Article 4 of the same Regulation. It therefore determined the fair compensation due to Gedi in accordance with Article 12 of the Regulation'.

"With this decision, the Authority has also expressed itself on the definition of 'very short extract'," it continues, "interpreting the qualitative criterion dictated by the legislator in the light of the change that has characterised the supply and demand for information in the new social context.

The advertising revenue parameter

"In the event of the use of publications of a journalistic nature by providers other than media monitoring and press review companies," Agcom continues, "the fair compensation due to publishers is calculated on the basis of the provider's advertising revenues deriving from the online use of the publisher's publications of a journalistic nature, net of the publisher's revenues attributable to the redirection traffic generated on its website by the publications of a journalistic nature used online by the provider. A rate of up to 70 per cent shall be applied to this basis of calculation'.

The calculation criteria

"In determining the basis of calculation, the Authority has taken into account the operating mechanisms of the provider's services and its business model, considering in detail the operating mechanisms of the Bing search engine," the note adds. "To this calculation basis, the Authority applied a rate determined on the basis of the criteria set out in Article 4(3) of the Regulation, considered cumulatively and with decreasing relevance: (a) number of online consultations of the publications (to be calculated with the relevant reference metrics); (b) relevance of the publisher on the market (online audience); (c) number of journalists, classified under national collective bargaining agreements; (d) proven costs incurred by the publisher for technological and infrastructural investments intended for the realisation of publications of a journalistic nature disseminated online e) proven costs sustained by the publisher for technological and infrastructural investments exclusively dedicated to the reproduction and communication of publications of a journalistic nature disseminated online; f) adherence and compliance, by the publisher and the provider, with self-regulatory codes (including journalists' codes of ethics) and international standards on information quality and fact-checking; g) years of activity of the publisher in relation to the historicity of the publication.

"For each of the aforementioned criteria, percentages have been applied, calculated on the basis of the provisions of the Methodological Note, which provides detailed indications on the various elements that make up the calculation model to which Agcom adheres when assessing the conformity of the economic proposals of the parties or when defining the amount of fair compensation," the Authority concludes.

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