One Problem With FTC/Google Settlement: Implies Fair Use Scraping Is An Antitrust Issue

from the not-good dept

While we've already covered the "settlement" between the FTC and Google, noting that it's basically a complete win for Google, there are some areas to be concerned about. In particular, Ed Black, from CCIA, calls out the agreement from Google to allow companies to opt out of being scraped and having snippets shown in vertical search results. While the details on this are fairly limited, and no one would have complained if Google had decided to do this on its own, by including it as part of the settlement, it can be read to imply, without any legal basis, that showing snippets of content from another site is an antitrust violation.

The wider impact of this could be serious, in that it could scare off other companies from doing this kind of activity, which is clearly protected under fair use laws. Of course, the FTC's official release on this issue didn't do much to clarify the thinking here, which is a part of the problem. Two FTC commissioners dissented on this particular bit, showing their concerns. Thomas Rosch's dissent (pdf) on this particular issue states he's worried about the implications, whether intended or not:

I am concerned that the majority's apparent position that scraping is a violation of Section 5 of the FTC Act will put the FTC in the position of becoming the enforcer of the copyright laws on the Internet—a task for which it has neither the resources nor expertise, and was surely not envisioned by Congress. As any casual user of the Internet knows, many websites make use of other websites' content; indeed, the business model for many popular websites is based on aggregating or summarizing the content of other websites. As a result of the majority's apparent condemnation of scraping, the legality of these aggregators may be called into question, and the Commission may be inundated with rent-seeking complaints from firms like the alleged 'victims' here.

In other words, in part due to the FTC's own refusal to clarify the thinking here, expect plenty of companies upset about scraping and the use of snippets to now go running to the FTC, using the Google settlement as "evidence" that the fair use aggregation and display of snippets is an antitrust violation. Elsewhere, Rosch points out that the whole issue of scraping seems silly since Google has no "monopoly" on scraping, so it's not even an antitrust issue -- and also that there had been no demonstration of any harm from Google's actions.

Similarly, Commissioner Ohlhausen, while not directly commenting on the copyright issues apparent in this decision, notes that scraping and displaying of snippets -- a key bit of fair use that is central to large parts of the internet -- seems like a bizarre thing to complain about since there is no legal basis for a complaint (pdf) and because the actions appeared to help, not hurt, the companies complaining:

Based on the evidence gathered in this investigation, I saw no factual or legal basis for pursuing... a standalone FTC Act Section 5 claim premised on the so-called scraping conduct.... In particular, there is no viable theory of harm ... for bringing a case....

I am not aware of any evidence that the alleged scraping resulted in either a decline in traffic from Google to the parties complaining about the scraping or any reduction in innovation by existing or potential rivals of Google. In fact, some of the complainants in this matter demonstrated significant growth both during and after the alleged scraping took place. Further, the investigation revealed that most websites appear to approve of Google's use of their content in Google's vertical properties because it leads to increased traffic to their sites. Moreover, the likelihood of possible future harm to competition or consumers from such conduct appears highly remote, particularly given the enormous growth of the use of apps to access rivals' sites or services directly.

In other words, the evidence seemed to show that such fair use of aggregating content and displaying of snippets actually drives innovation and consumer benefit forward.

Furthermore, in a press briefing after the FTC announcement, law professor Eric Goldman made a significant point. For many "review sites" that the settlement applied to, the sites themselves don't even hold the copyright on the reviews in question (the authors do), but the settlement seems to presume that the sites hold the rights.

Unfortunately, because of the nature of the settlement, and Google's willingness to allow companies to opt-out of parts of its aggregation efforts in vertical search, it's going to falsely lead some to believe that anyone else doing this may, in fact, be in violation of antitrust laws. The end result may scare companies off from doing useful innovation, relying on fair use to aggregate content online, and may also increase the burden on the FTC in dealing with similar claims from companies. That would be an unfortunate end result.

Filed Under: antitrust, copyright, fair use, ftc, snippets
Companies: google