Online rights: EU copyright reforms seek to redress 'value gap' and rein in tech giants

Simon Fuller, IBA Managing Editor

The European Parliament voted on 12 September to adopt the Directive on Copyright in the Digital Single Market. The aim is to update copyright rules for the digital age, though it raises concerns over internet freedoms.

The reforms place more responsibility on internet platforms to prevent breaches of copyright and aim to better protect news publishers whose content is shared online. They also seek to address the so-called ‘value gap’ – the growing mismatch between the profits made by digital platforms who make artists’ work accessible and the revenue returned to the creative community.

The Directive, which includes revisions to the European Copyright Directive 2001, will now be further developed through a fast-track legislative process before the European Parliament votes on it again early next year.

But the planned law continues to prove divisive, prompting concerns over the restrictions it could have on internet use and its potential to further fragment national copyright laws across Europe.

‘The reforms impact a balancing of three fundamental rights recognised in European law: freedom of expression, freedom to do business, and IP rights,’ says Ben Allgrove, a partner at Baker McKenzie who leads the firm’s IPTech Practice Group. ‘Views legitimately differ on where the balance should lie.’

There’s been particular focus on Articles 11 and 13 of the Directive. Before the European Parliament’s September vote, these two parts were amended after MEPs rejected the proposals in an earlier vote in July 2018.

The reforms impact freedom of expression, freedom to do business, and IP rights

Ben Allgrove
Partner, Baker McKenzie’s IPTech Practice Group

Article 11 seeks to make internet platforms pay publishers to use snippets of their work – for example, when Facebook shows headlines and accompanying pictures on a user’s news feed. A group of 20 major news agencies issued a statement in July urging MEPs to pass the Directive, in order to prevent Google and Facebook ‘plundering’ their content – referring to the free use of their news content by the platforms.

But opponents say the proposals would amount to a ‘tax’ on linking to news, and warn that it might inadvertently lead to an increase in false or misleading online information. German MEP Julia Reda argues that ‘since “fake news” and propaganda outlets are unlikely to charge for snippets, their content could as a result become more visible on social networks’.

Article 13 of the Directive would make internet platforms liable for copyright infringements for content they host – meaning they will need to prevent it from appearing. Platforms would need to deploy ‘upload filters’ to meet this requirement, says Allgrove. ‘The difficult question is how you then differentiate at the point of upload a use permitted under copyright law – for example, a parody – from a use the rightholder is entitled to restrict,’ he says. ‘It flips the notice and takedown regime on its head – a takedown and appeal regime.’

Ted Shapiro, a partner and Head of the Brussels office at media-focused law firm Wiggin, says most major platforms are already using some kind of filtering, and warns that Article 13 could cause confusion. ‘While arguably it will be hard to comply with the obligations established by Article 13 without using some form of technological measures, the text in its current form is unclear and rife with internal inconsistencies,’ he says.

Disagreements over the Directive have seen intense online campaigns waged by both supporters of the reforms – often characterised as being publishers and artists – and opponents, typically seen as being large tech companies and groups concerned about the restrictions it could have on internet use.

But the battlelines are not as clear as first appears. For instance, in September rapper Wyclef Jean bucked the trend of many other musicians by speaking out against the proposals and highlighting the benefits of using internet platforms to promote music. Jean argued that the ‘value gap’ between the money artists get and the profits made by digital platforms does not exist, and that ‘this line of thinking – even if well-intentioned – takes musicians in the wrong direction’.

Shapiro says the different provisions in the Directive would pit different rightholders groups against different user groups – and sometimes rightholders versus rightholders. ‘For example, Article 11 is only relevant to press publishers,’ he explains. ‘Other publishers are excluded and, of course, authors are already protected, and other groups – producers, performers and broadcasters – already have related rights.’ On the ‘value gap’, he says the music sector has been – artists like Jean aside – pushing hardest, while sectors like film and TV have been more ambivalent.

Following the European Parliament’s vote to adopt the Directive, the proposals will be developed through the ‘trilogue’ process, which also involves the European Commission and the Council of the European Union. Closed-door negotiations began on 2 October, with more scheduled over the next three months. The European Parliament will then vote on the refined legislation, likely in early 2019. Shapiro expects ‘further significant changes’ from the process.

But, whatever the Directive ultimately looks like, a complication will be that different interpretations will be made when it’s turned into national law by individual EU Members States. ‘The real complicating factor in the copyright space is that most exceptions recognised in EU law are optional for Member States. That is what creates the fragmentation,’ says Allgrove.

Nina Henningsen, Publications Officer for the IBA’s Media Law Committee and a partner at Horten, agrees. ‘As with all other EU legislation, the diversity of the individual interpretation by Member States can lead to an uneven market, where some Member States are quite tough towards, for example, tech giants, and others are not.’

How European courts interpret the provisions of the new Directive when it’s enacted will also have an impact. The existing European Copyright Directive has resulted in a number of closely-watched rulings from the Court of Justice of the European Union, including in the GS Media and Svensson cases relating to linking to content, and the BestWater case involving embedded video. ‘Our final understanding of the changes and amendments will await the cases brought before the court’, says Henningsen.

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