AN UPDATE ON THE LINK TAX

The past few days have been decidedly turbulent for web companies, with the government constantly seeking new ways to tax the internet. But are these measures really the best solution for our country?

The proposed reform of the Copyright Directive, one of the European Commission’s most hotly debated regulations, does not appear to be gaining traction during discussions in the European Parliament.

In particular, the introduction of a new levy (Art. 11) in favor of publishers (the “link tax”) and the requirement (Art. 13) for online intermediaries to implement filters for user-generated content in order to remove content that infringes copyright.

The mechanism attempts to monetize one of the web’s core features—hypertext—but the concern is that it could lead to a repeat of what has already happened in Spain and Germany, where publishers have the right to charge Google News for their content. The result has been a sharp drop in traffic to publishers’ websites.

Recently, however, the apparent negative consequences of Spain’s adoption of the link tax do not seem to have deterred the Italian government from pursuing a similar initiative. The government is reportedly considering legislation that would require news aggregators such as Google News to reach a commercial agreement with publishers. Should this agreement fail, a mediation process could be initiated before AgCom or the relevant division of the Prime Minister’s Office before proceeding to litigation.