German media regulator says Google's AI Overviews subject to German media law

BERLIN, July 14 (Reuters) - Germany's media regulator said on Tuesday that Google's AI Overviews and Perplexity AI are subject to the country's media laws, stepping up scrutiny of AI-generated content after a German court found Google liable for inaccurate information produced by the feature.

The Commission for Licensing and Supervision, ZAK, which represents Germany's 14 state media authorities, said AI-generated news summaries and chatbot responses constitute content created by the providers themselves rather than merely displaying third-party material.

The ruling follows increased scrutiny of AI-generated search summaries in Germany and elsewhere in Europe.

In a separate case, a court in Munich held that Google could be directly liable for allegedly false statements generated by its AI Overview feature, finding that AI-produced summaries amounted to the company's own content rather than a mere display of third-party information, according to German newspaper publishers' association BDZV.

"AI search engines and chatbots are content providers, and we will consistently apply German media law to them from now on," ZAK Chairman Thorsten Schmiege said in a statement.

The regulator said the liability exemption under the European Union's Digital Services Act, which generally shields platforms from responsibility for illegal user-generated content, did not apply in these cases.

According to the regulator, Google's AI Overviews are displayed prominently within search results, making traditional lists of links less visible and thereby unfairly disadvantaging third-party media content.

It also argued that chatbots such as Perplexity influence the discoverability of news content when they select and present sources, links or recommendations alongside AI-generated answers.

Such services could therefore qualify as media intermediaries and be subject to rules designed to safeguard media plurality.

Google said it planned to appeal the decision, which a spokesperson said "fails to recognise how people's preferences when searching for information and the information ecosystem are changing."

"Our AI-powered summaries enhance the search experience in Germany - they help users discover new content and ask follow-up questions," the spokesperson said.

Perplexity declined to comment on the decision but said it complies with the EU's privacy rules, or GDPR, and holds SOC 2 Type II security and privacy certification.

(Reporting by Klaus Lauer, Writing by Friederike Heine, Editing by Louise Heavens)