Bernard Arnault, the billionaire head of luxury conglomerate LVMH (Mot Hennessy Louis Vuitton), is spearheading a legal battle against Elon Musks social media platform X (formerly Twitter), accusing the platform of using his news organizations content without proper compensation. The lawsuit, filed in France, has garnered significant attention, with newspapers like Arnault’s Le Parisien and Les Echos, and other prominent newspapers like Le Figaro, and Le Monde joining forces to challenge Xs failure to adequately compensate news outlets for their work.

The legal action is based on a provision of the European Union Copyright Directive, which aims to ensure that publishers are paid for the use of their content by digital platforms. Under this EU law, platforms like X, Google, and Facebook are required to compensate publishers when they display or share news content, such as articles or snippets, that contribute to the platforms advertising revenue.

The European Union Copyright Directive

The core of the lawsuit lies in Directive (EU) 2019/790, also known as the EU Copyright Directive. This directive, which came into effect in 2021, introduced a crucial provisionArticle 15which gives news publishers the right to request payment from digital platforms when their content is used to generate commercial value. It was specifically designed to address the growing power of large tech platforms, which have long benefited from the content created by journalists and news organizations, without properly compensating the original publishers.

Under this directive, digital platforms are obligated to negotiate licensing agreements with news organizations or pay for using their content. However, the dispute between X and the French publishers stems from claims that X has not complied with these obligations. The French group argues that X has failed to properly compensate them for using their content, in violation of European copyright law.

A Paris court already ruled in favor of the plaintiffs, ordering X to provide detailed data on how it uses their content on the platform. This decision, which was made in late 2023, was seen as a significant win for the news organizations. However, X has reportedly failed to comply with the courts order, prompting further legal action.

News Publishers Push for a Fair Share

This lawsuit is part of a broader trend in Europe, where news organizations have long criticized tech platforms for profiting off their content without adequate compensation. The issue has become particularly pressing as digital platforms like X, Google, and Facebook dominate online news distribution, exerting significant control over what content users see.

One of the major players in the effort to secure fair compensation for news publishers is Google, which has taken steps to address these concerns. Google launched Google News Showcase, a program designed to pay publishers for featuring their content. Through this initiative, Google has signed agreements with over 300 news publications across Europe, compensating them for the use of their stories on Google News. This has been seen as an effort to address some of the imbalance in the digital news ecosystem, and Google has repeatedly highlighted its efforts as a model for compensating publishers.

In contrast, X, under Musks ownership, has not yet made similar moves to secure licensing agreements with publishers or compensate them for their content, leading to the current legal standoff.

Billionaire Standoff

This case pits two of the worlds richest individuals against each other in a high-stakes legal battle. Bernard Arnault and Elon Musk have often swapped positions as the worlds wealthiest person, with Musk currently holding the top spot. His net worth has surged by $105.5 billion in 2023, now totaling around $334.5 billion. This increase follows the recent U.S. presidential election, where Musk, a vocal Trump supporter, is said to be preparing for a significant role in the new administration.

In contrast, Arnault has seen his fortune drop by $36 billion this year, primarily due to weaker demand for luxury goods among Chinese consumers. As a result, his net worth stands at approximately $171.5 billion, reflecting the difficulties faced by the global luxury market, particularly in China.

The Broader Global Context

This legal case also highlights broader international efforts to ensure that digital platforms fairly compensate content creators. For instance, in 2021, Australia introduced its News Media Bargaining Code, which mandates that platforms like Google and Facebook negotiate directly with publishers and pay for the content they display. The law was introduced in response to concerns that tech giants were abusing their monopoly power over news distribution, leaving publishers without the ability to negotiate fair compensation.

Similarly, the European Union’s Copyright Directive was also driven by concerns over the growing dominance of platforms like Google and Facebook and their control over online news. By establishing the right of news organizations to be paid for the use of their content, the EU sought to rebalance the power dynamics between tech companies and publishers, and to ensure that news organizations could continue to thrive financially in the digital age.

For Musks X, this lawsuit represents a significant challenge to its business model. The platform has already faced scrutiny over various issues since Musks acquisition, including its content moderation policies, financial struggles, and its ability to generate revenue from advertising. If the court rules against X, the platform will be forced to comply with the EU Copyright Directive and pay compensation to news publishers. This would set a precedent for other digital platforms operating in the EU, potentially reshaping the landscape of online content distribution and advertising.