Summer School for Journalists
and Media Practitioners
Search engines, news aggregators
and intermediaries
Elda Brogi
Giova...
Intermediaries, who are they?
Internet intermediaries bring together or facilitate transactions between third
parties on t...
Intermediaries, who are they?
Internet access and service
providers
Web hosting
Search
engines and
portals
E-commerce
inte...
 Select and aggregate content according to neutral, automatic
systems
Aggregators
search engines
& portals
Participative
...
Aggregators
search engines
& portals
Participative
network plat.
App stores
Web Hosting
ISPs
E-commerce
Intermediaries, wh...
Intermediaries, a possible map
Main features
 Mere conduit
 Caching
 Hosting
 Lack of editorial control
 Neutrality
 Automation
Lack of editorial control
 Intermediaries do not have any control on content
 No influence on timing the content is deli...
Neutrality
 Do they have too much judgment (designing algorithms, defining
customised results for users…)….
 ….or should...
Automation
 Automation is when the conduit is merely technical and there is no human
intervention.
 It occurs when there...
Concerns about news intermediaries
 Bottlenecks of distribution of news: intermediaries control the
way users can access ...
News suppliers need intermediaries (?)
 In the digital economy, profits can be generated only if there is a wide
market.
...
Business models of intermediaries
 Intermediaries mainly base their business on advertising. Intermediaries
are typically...
The offline news value chain
Photo &news
agencies
Journalists
photographer
Content
creation
RetailerPrinting Wholesaler Re...
The online news value chain
Photo &news
agencies
Journalists
photographer
Content
creation
Aggregator
Wholesaler Reader
Ad...
Where is the advertising going?
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
2007 2008 2009 2010 2011
France Germany ...
The winner takes all
 It is difficult to set competition within the intermediaries
 Network effects: the more inclusive ...
The lack of investment in original content
 Intermediaries, and in particular aggregators, seem not to be interested
in p...
Some hints from a legal perspective
 The directive on electronic commerce 2000/31/EC sets up an
Internal Market framework...
E. commerce directive: mere conduit
 Art 12 Where an information society service is provided that consists of the
transmi...
E. commerce directive: caching
 Art 13 service provider is not liable for the automatic, intermediate and temporary
stora...
E. commerce directive: hosting
 Art 14 Where an information society service is provided that consists of the storage of
i...
No general obligation to monitor
 Art 15 1. Member States shall not impose a general obligation on providers, when
provid...
Some cases of the CJEU on the role of ISPs:
2008 Promusicae-Telefonica Case C-275/06
 The court held that European law do...
2011 Sabam-Scarlett C-70/10
 Case on the installation of a system for filtering electronic communications
in order to pre...
…
 prohibition laid down in the E-Commerce Directive, under which national
authorities must not adopt measures which woul...
Hybrids
 Search engines, aggregators, social networks, apps...they fall under
the e.commerce directive
 But they are “di...
2012 Sabam-Netlog C-360/10 (“neutrality”)
 Question raised: if it is consistent with European law a system for
filtering ...
Some argument against neutrality
 EU opened an investigation on the way Google ranks and displays Internet-
search result...
Some Italian courts have attempted to find Internet intermediaries liable for the content
that they or their services tran...
Conclusions (?)
 Intermediaries are affecting the business model of “traditional players”
 They offer new business model...
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Search engines, news aggregators and intermediaries

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Elda Brogi
Giovanni Gangemi

CMPF Summer School 2013 for Journalists and Media Practitioners
http://cmpf.eui.eu/training/summer-school-2013.aspx

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Search engines, news aggregators and intermediaries

  1. 1. Summer School for Journalists and Media Practitioners Search engines, news aggregators and intermediaries Elda Brogi Giovanni Gangemi Summer School Florence, EU (Sala Teatro) 14/05/2013
  2. 2. Intermediaries, who are they? Internet intermediaries bring together or facilitate transactions between third parties on the Internet. They a) give access to, b) host, c) transmit d) index content, products and services originated by third parties on the Internet or provide Internet-based services to third parties (OECD, 2010).
  3. 3. Intermediaries, who are they? Internet access and service providers Web hosting Search engines and portals E-commerce intermediari es News aggregators Social networks App stores Third-party producers of content, products and services Users or consumers of content, products and services Payment sysyems
  4. 4.  Select and aggregate content according to neutral, automatic systems Aggregators search engines & portals Participative network plat. App stores  Aid in creating content and social networking  Aid in navigation on the internet  electronic retailers for news content and apps Web Hosting  Transform data prepare data for dissemination or store data or content on the Internet of others ISPs  Provide access to the internet to households, business and government E-commerce  Enable online buying or selling Intermediaries, what do they do? Payment systems  Process internet payments
  5. 5. Aggregators search engines & portals Participative network plat. App stores Web Hosting ISPs E-commerce Intermediaries, what do they do? ThirdpartiesConsumers/users Transactions Information Payment sysyems
  6. 6. Intermediaries, a possible map
  7. 7. Main features  Mere conduit  Caching  Hosting  Lack of editorial control  Neutrality  Automation
  8. 8. Lack of editorial control  Intermediaries do not have any control on content  No influence on timing the content is delivered (it depends on the users…)  No influence on the quality  No (direct) influence on the ranking (?)
  9. 9. Neutrality  Do they have too much judgment (designing algorithms, defining customised results for users…)….  ….or should they take more responsibility?  Is the lack of judgment a totally neutral approach? Or can it be considered intentional?  Internet bias: can advertising affect the neutrality of intermediaries? (e.g. TV)
  10. 10. Automation  Automation is when the conduit is merely technical and there is no human intervention.  It occurs when there is a lack of knowledge or control on stored data  “Google would not permit any human editing to refine the results” (Randal Stoss)  ISP have less opportunities to impose editorial control
  11. 11. Concerns about news intermediaries  Bottlenecks of distribution of news: intermediaries control the way users can access to news Control the access to news Selection / influence news agenda Impact future economic models Influence political agenda  The way these players may impact on news supply  The way intermediaries chose, select and promote news (content) can influence the news agenda and the newsworthiness criteria  The way they influence the political agenda as a result of the role they play as distributors of news
  12. 12. News suppliers need intermediaries (?)  In the digital economy, profits can be generated only if there is a wide market.  Intermediaries can play an important role for news suppliers because the allow them to reach a wider audience  Intermediaries are becoming an increasingly important source of information for news suppliers.
  13. 13. Business models of intermediaries  Intermediaries mainly base their business on advertising. Intermediaries are typically two sided markets.  Advertising is the main source of revenues for search engines and social networks  But revenues can be generated also using visibility to promote other services (i.e. Google can give priority to its services, such as Maps, by ranking them highly in the search results).
  14. 14. The offline news value chain Photo &news agencies Journalists photographer Content creation RetailerPrinting Wholesaler Reader Content creation Manufacturing Physical distribution Advertiser $ $
  15. 15. The online news value chain Photo &news agencies Journalists photographer Content creation Aggregator Wholesaler Reader Advertiser Content creation Manufacturing / Automation Distribution ?$ $ ?$ ?$
  16. 16. Where is the advertising going? 0 1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000 2007 2008 2009 2010 2011 France Germany Italy Spain UK  Aggregators & search engines are boosting their revenues  Advertising on newspapers is dramatically dropping  What correlation between these two phenomena? - 5.000 10.000 15.000 20.000 25.000 30.000 2007 2008 2009 2010 2011 million € Google Facebook Cagr: +26% Cagr: -8% Aggregators, search engines, portals Newspapers’ advertising
  17. 17. The winner takes all  It is difficult to set competition within the intermediaries  Network effects: the more inclusive a social network is, the better it works  The bigger a search engine is, the largest number of search result it will provide  Scales economies: intermediaries are based on technical tools (i.e. algorithms) that can be used worldwide. Any additional can be added at no additional cost  This makes markets very concentrated: Google is now 7 times bigger than its competitor Yahoo!
  18. 18. The lack of investment in original content  Intermediaries, and in particular aggregators, seem not to be interested in producing their own content and are rarely involved in content production,  However, there is a difference between the ones who exert some form of editorial control (e.g. Yahoo! News) and pure aggregators (e.g. Google).  These players challenge traditional media outlets moving online (BBC, CNN, FOX…).  The lack of resources allocated in new content induces a systematic re- use of existing content.
  19. 19. Some hints from a legal perspective  The directive on electronic commerce 2000/31/EC sets up an Internal Market framework for electronic commerce  The directive sets some rules on liability of intermediaries  mere conduit  caching  hosting
  20. 20. E. commerce directive: mere conduit  Art 12 Where an information society service is provided that consists of the transmission in a communication network of information provided by a recipient of the service, or the provision of access to a communication network, Member States shall ensure that the service provider is not liable for the information transmitted, on condition that the provider:  (a) does not initiate the transmission;  (b) does not select the receiver of the transmission;  and (c) does not select or modify the information contained in the transmission.  possibility for a court or administrative authority, in accordance with Member States' legal systems, of requiring the service provider to terminate or prevent an infringement.
  21. 21. E. commerce directive: caching  Art 13 service provider is not liable for the automatic, intermediate and temporary storage of that information, performed for the sole purpose of making more efficient the information's onward transmission to other recipients of the service upon their request, on condition that:  (a) the provider does not modify the information;  (b) the provider complies with conditions on access to the information;  (c) the provider complies with rules regarding the updating of the information, specified in a manner widely recognized and used by industry;  (d) the provider does not interfere with the lawful use of technology, widely recognized and used by industry, to obtain data on the use of the information; and (e) the provider acts expeditiously to remove or to disable access to the information it has stored upon obtaining actual knowledge of the fact that the information at the initial source of the transmission has been removed from the network, or access to it has been disabled, or that a court or an administrative authority has ordered such removal or disablement.
  22. 22. E. commerce directive: hosting  Art 14 Where an information society service is provided that consists of the storage of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that:  (a) the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or  (b) the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information. ...  3. This Article shall not affect the possibility for a court or administrative authority, in accordance with Member States' legal systems, of requiring the service provider to terminate or prevent an infringement, nor does it affect the possibility for Member States of establishing procedures governing the removal or disabling of access to information.
  23. 23. No general obligation to monitor  Art 15 1. Member States shall not impose a general obligation on providers, when providing the services covered by Articles 12, 13 and 14, to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity.  2. Member States may establish obligations for information society service providers promptly to inform the competent public authorities of alleged illegal activities undertaken or information provided by recipients of their service or obligations to communicate to the competent authorities, at their request, information enabling the identification of recipients of their service with whom they have storage agreements.
  24. 24. Some cases of the CJEU on the role of ISPs: 2008 Promusicae-Telefonica Case C-275/06  The court held that European law does not require Internet service providers (ISPs) to disclose their subscribers’ identities to trade organizations for the purpose of civil litigation against them.  Confidentially obligation to be limited where this is necessary to protect the rights and freedoms of others, including property rights in situations where authors are seeking to obtain protection of such rights before the competent courts. EU law does not preclude the possibility for the Member States of laying down an obligation to disclose personal data in the context of civil proceedings.
  25. 25. 2011 Sabam-Scarlett C-70/10  Case on the installation of a system for filtering electronic communications in order to prevent file sharing which infringes copyright  No general obligation to monitor information transmitted. EU law precludes a national court from ordering an ISP to install a general filtering system with the aim of preventing the illegal downloading of files…
  26. 26. …  prohibition laid down in the E-Commerce Directive, under which national authorities must not adopt measures which would require an internet service provider to carry out general monitoring of the information that it transmits on its network.  In this regard, the Court finds that the monitoring injunction in the case between SABAM and Scarlet would require Scarlet to actively monitor all the data relating to each of its customers in order to prevent any infringement of intellectual property rights. Such a general monitoring request is incompatible with the E-Commerce Directive and with the fact that the right to intellectual property is not to be regarded as legally absolute and inviolable.
  27. 27. Hybrids  Search engines, aggregators, social networks, apps...they fall under the e.commerce directive  But they are “different” from “common” ISPs (?)  Are they totally “neutral”?  Do they “select” (and so have a sort of editorial control) on contents?
  28. 28. 2012 Sabam-Netlog C-360/10 (“neutrality”)  Question raised: if it is consistent with European law a system for filtering most of the information stored on Netlog servers in order to identify files containing works in respect of which SABAM claims to hold rights, and to block the exchange of such files.  The Court affirmed Netlog is a hosting service within the meaning of article 14 of Directive 2000/31 as it stores information provided by the users on its servers.  So, a social network falls under the e.commerce directive
  29. 29. Some argument against neutrality  EU opened an investigation on the way Google ranks and displays Internet- search results and of its advertising contracts with other websites  Google proposals: Google has offered clearer labeling of results for its own products, such as YouTube, Google Shopping and Google+, so that users can distinguish them from other search results. Google also has been accused of copying, or "scraping" content from rival websites, and it also has proposed to give rivals an "opt-out" to prevent this from happening.
  30. 30. Some Italian courts have attempted to find Internet intermediaries liable for the content that they or their services transmit, store, or even index. the courts say that due to technological evolution, the activities of Internet providers can be no longer in line with those codified by EU legislation and therefore the system of liability exemptions therein contained needs to be re-interpreted. new genus of services, somewhere in between hosting and directly offering content. This new genus is not completely passive in the transmission of third parties’ content, and does not limit its activity to offer the storage of memory, but, on the contrary, has a specific role in organizing the content uploaded by users (revenue form advertisements that link to the infringing content, even if uploaded by users, the host can remove, according its terms and conditions of use, flagged contents. The system used to be informed of the abuses is a way to have some kind of control on the contents; the “suggested videos system” is an “editorial” service). Those are “active hosting providers”
  31. 31. Conclusions (?)  Intermediaries are affecting the business model of “traditional players”  They offer new business models and business opportunities, but the are also competitive for advertising revenues  The question about investment in original content is still open  Problems in defining neutral intermediaries and the scope of application of the e.commerce directive  Need of a new regulation in between AVMSD and ECD?  case-by-case analysis has to be made to determine the liability of a ISP or ISP-like?

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