Google Tells FTC Enforcing “Hot News” Would Create a Hot Mess

The media industry may be in upheaval as a result of the web, but having the government step in isn’t the right response, Google (s goog) has told the Federal Trade Commission. The search company’s comments are a response to the FTC’s draft proposal, released last month, on policy changes to support the media business and journalism in particular. The draft document includes proposed changes to intellectual property laws to protect news entities from aggregators (such as Google News), a loosening of anti-trust laws to allow media outlets to collaborate on paywalls and other methods of charging for the news, as well as a proposal for government subsidization of the industry.

In a blog post on the Google Public Policy blog, public policy director Pablo Chavez said that while the Internet has presented challenges for traditional publishers, Google is “optimistic about the news industry’s future.” But Chavez said the company strongly disagrees with many of the recommendations in the FTC draft paper, including the suggestion that the government should enact a “hot news doctrine” — that is, legislation that would prevent others from reporting the same facts as a traditional publisher for a period of time after a news event. In effect, this would alter the principles of fair use under existing copyright law.

The concept of “hot news” protection for publishers dates back to 1918, when the Associated Press newswire sued a rival wire for republishing information from AP’s reporters, claiming the other newswire rewrote its stories and distributed them via telegraph. The Supreme Court sided with AP, but the resulting law has been rarely used — although the wire service did employ it last year to go after a news aggregator called All Headline News. The FTC paper proposes this principle become an explicit part of federal law, along with other changes to the concept of fair use.

Chavez said that a hot news law “would not only hurt free expression, but also the very profession of journalism that the proponents of hot news say they support.” Such a change would also make it virtually impossible for aggregators such as Google News and Yahoo News to function the way they currently do, publishing excerpts from news stories without explicit permission from media outlets. In its submission to the FTC, Google also noted that its AdSense platform “helps publishers generate revenue from their content by providing relevant advertising and improving the connection between advertisers and consumers,” and noted that in 2009 alone, Google shared more than $5 billion in revenue with its AdSense partners. The company also noted that many newspapers use Google‘s DoubleClick ad platform on their websites.

Other key points from the Google submission include:

* “The large profit margins newspapers enjoyed in the past were built on an artificial scarcity: limited choice for advertisers as well as readers. With the Internet, that scarcity has been taken away and replaced by abundance. No policy proposal will be able to restore newspaper revenues to what they were before the emergence of online news.”

* “Newspapers have had periodic business model challenges since long before the Internet: Circulation by U.S. household has been on decline since the early twentieth century; the number of newspapers distributed peaked between 1890 and 1920.”

* “In 1957, newspaper editors – foreshadowing the rhetoric used by some against the Internet – called television reporters ‘parasites’ and observed that they ‘should handle their own news instead of cashing in on our brains and experience.'”

* “[T]he Discussion Draft does not acknowledge the basic economics of search engines and similar services and instead erroneously suggests that search engines are somehow cannibalizing newspaper advertising revenue rather than serving as an important connection to potential consumers.”

* “The newspaper business is not immune from the truism that, in order to succeed, a business must respond to the demands of its consumers by delivering products and services that they want.”

The FTC paper says that the proposals it includes are not guaranteed to become legislation, but are merely intended as a starting point for discussion. The full text of Google’s response is embedded below:

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Post and thumbnail photos courtesy of Flickr user Zarko Drincic