Does the digital economy need strong copyright?

The European Union has been talking about digital commerce since the Internet’s early days. The success of European companies engaged in e-commerce is highly dependent on a well-connected and robust digital single market (DSM). While much of the work on the DSM is focused on removing barriers to access, one of the keys to ensuring a successful digital economy is the harmonization of European copyright laws. Consistent copyright rules will both help European companies compete on a level playing field, and copyright owners to obtain fair compensation for their intellectual capital.

Although the 2000 e-Commerce Directive and the Information Society Directive of 2001 cut regulatory burdens in the digital economy, businesses still face uncertainty with conflicting copyright regulatory regimes across member states, making e-commerce particularly laborious and costly for startups, SMEs, online platforms.

The 2000 e-Commerce Directive created a safe harbour for online platforms — with the intent to limit intermediary platform liability. Intermediary platform liability is the principle that online platforms should be held accountable for content on their websites. Platform liability suggests that YouTube should be accountable for the video content that end-users upload on their site.

The current system is considered to have two main benefits; firstly, platform communities engage in self-policing, so that members report copyright violations and other illegal material. Secondly, copyright holders are able to notify platforms of copyright violations and ask that material be removed from sites that use it without permission. In both cases, under the rules of the 2000 e-Commerce Directive, platforms are considered simple “conduits” and not liable for unlawful material posted on their sites as long as they made good faith efforts to remove copyrighted content once notified.

Those opposed to the current system say that copyright holders have an almost impossible task of policing the Internet for infringements of their copyrighted material, while platforms remain unaccountable for what takes place on their own sites. Those supporting the current system contend that platforms, especially startups and SMEs, do not have the resources to monitor everything that goes up on their sites. Moreover, privacy advocates, like the Open Right Group, warn that giving companies such as Google or Facebook responsibility for “policing” authority over free speech is tantamount to censorship.

Opponents argue that the latest Commission proposals on copyright diverges considerably from the 2000 e-Commerce Directive. The draft directive proposes giving broader legal rights to copyright holders so they can pursue copyright infringement cases in court. This includes a new right to remedy against online platforms and media aggregators that use so-called “snippets” that appear in most online news searches. Publishing rights groups say that the changes are necessary, as the 2000 directive was convoluted and meant copyright proprietors spent too much time battling simple copyright infringement in drawn out court battles. The Commission says its new proposal creates a level playing field, giving copyright holders tools to protect their intellectual capital.

Many tech companies and startups consider the latest copyright proposal to support an unfavourable and expansive interpretation of intermediary platform liability. They claim that the proposal will stifle innovation, places end-users at risk of incurring law suits for a tweet, and could even harm copyright holders themselves. MEP Julia Reda points to developments in Germany and Spain as proof that such laws hurt everyone involved. In both countries, ancillary copyright laws forced platforms to pay for all content, including snippets, and held platforms legally accountable for illegal content on their sites. The result was that platforms simply ceased their news services in both countries, and news publishers saw traffic to their sites plummet. In Germany, publishers eventually granted Google, and only Google, a free license to continue placing snippets on its search engine. In Spain, however, special licensing exemptions were forbidden and Google shut down its news search; as a result, Spanish publishers lost traffic and suffered major revenue losses.

Education advocates have expressed reserved satisfaction with the proposed general directive, which provides exemptions for “digital and cross-border uses in the field of education, text and data mining in the field of scientific research, and preservation of cultural heritage.” The Commission has also released a second proposal for a directive that should bring the EU into compliance with its obligations under the Marrakesh Treaty. Marrakesh facilitates universal provisions to accommodate the production and replication of books and other learning materials for the visually and print impaired.

Regulation of copyright in Europe should try to reconcile all competing interests. The Commission’s proposal is a first draft and now goes to the Council and Parliament for debate. Entrenched interests on both sides will do their best to influence negotiations in order to obtain a favourable outcome. Regardless, the final proposal will need recognise the fact that digitization of copyrighted material is here to stay. According to Eurobarometer, 72% of Europeans between 15 to 45 get their news online at least once a week. And if we want to encourage online platform diversity, we must make these resources readily available, while providing fair compensation to copyright holders.

Words Garrick Long, Elizabeth de Bony, Leo Cendrowicz & Andrew Cecil (Burson-Marsteller Brussels)

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