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The implementation of the ‘AEDE levy’ would have a negative impact of 1.13 billion euros annually for Spanish Internet users

julio 10, 2014 Noticias Coalición No Comments

Según un informe de Afi para la Coalición Pro Internet, la introducción de un canon afectaría negativamente a la eficiencia en la búsqueda de información, a la libertad empresarial, a la competencia y a la seguridad jurídica

According to a report by Afi for the Coalición Pro Internet, the introduction of a levy would negatively affect efficiency in finding information and it would threaten free enterprise, competition and legal certainty

Madrid, July 3, 2014.

The implementation of the so-called ‘AEDE levy’ (canon AEDE) would have a negative impact of 1.13 billion euros annually for Spanish Internet users, due to an increase in the search time to access news. This is one of the main conclusions of the report commissioned to Spanish economic consultancy Analistas Financieros Internacionales (Afi) by the Coalición Pro Internet. The publication of these results takes place while the debate of the revised text of the Intellectual Property Law (IPL) is still in Parliament. The new law grants newspaper publishers an “inalienable right” to charge a levy on providers of electronic aggregation services.

Afi has estimated the additional time that users would have to devote to search and locate the desired information in the absence of aggregators, a time that would not be spent on alternative and arguably more productive activities. It is precisely this “opportunity cost” that has been valued in monetary terms from the average hourly income of Internet users. An increase of just a second in the time spent by an average Spanish user to find a piece of news would undermine her individual welfare in 65.7 euros per year.

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Afi’s report includes a comprehensive overview of the economic implications that would arise should the modification of the IPL finally be approved. Its conclusions highlight that the introduction of the ‘AEDE levy’ would have a negative impact on efficiency, competition, technological and business innovation, and legal certainty.

The introduction of a levy is intended to solve a market failure, but the existence of such imperfection is questionable, since there is no proof of the existence of direct competition between aggregators and media outlets in the provision of news. Moreover, the existence of opt-out mechanisms that allow publishers to prevent the distribution of their content through these tools provides a simple alternative for the media that do not want to be aggregated.

At the microeconomic level, besides the damage inflicted to Internet users in terms of loss of efficiency, additional negative effects can be identified. The market structure of the news publishing industry would be particularly affected, in the sense that new and emerging media would find more difficulties to position themselves due to the surge of new entry barriers.

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As it is now described in the proposed reform of the IPL, an inalienable compensation conflicts with free enterprise and can harm smaller publishers, especially those that produce content under copyleft licenses (Creative Commons, for instance) or those willing to negotiate bilateral agreements with aggregators.

From a macroeconomic point of view, activity and employment offshoring processes in high value-added sectors could take place. Technological and business innovation directly related to information and communication technologies would also be discouraged. Ultimately, should the legislative reform pass, it would constitute a discretionary policy modification to the detriment of the general interest, and it would undermine legal certainty in Spain.

Digital content aggregators are, according to the report, one of the instruments that have most contributed to offsetting the negative effects of information overload on the Internet. These tools provide specific and differential value to users, since they are not mere content linkers, but offer other value-added services that range from automated aggregation to crowdsourced mechanisms to offer relevant information to each user.

Afi’s report considers that the aggregation of content does not generate a market failure, nor does it preclude publishers from receiving a compensated for their productive activities.
About the Coalición Pro Internet

Several companies and organizations from various economic sectors have jointly decided to launch this year the Coalición Pro Internet. The members of this platform share a common open and innovative vision of the digital environment and their strong opposition to specific aspects of the proposed reform of the Intellectual Property Law (IPL).

The founding institutions of the Coalición Pro Internet are the Association of Newspaper Publishers – AEEPP, the Spanish Association of Digital Economy (Adigital), the Association of Internet Users, Google, Menéame, WeblogsSL, Hypertextual, Elocuent or Adslzone, online media 20minutos.es and eldiario.es and individual communication professionals from the digital sector.

After the founding members, other organizations have joined the coalition: TICbeat, yorokobu.es, Teleprensa – Madrid, Journalists around the world, Nexo Group, OKFN Spain, EcoInteligencia Editorial and Tek’n’life.

About Afi

Afi is a leading independent economic and financial consultancy that was founded in 1987 in Madrid. It has become a reference in the Spanish economic and financial fields and has developed an increasing international footprint. Our consulting model is based on technical solvency combined with a strong customer focus, excellent service and innovation.

You can read or download here the full analysis:


 

 


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