This week was an important one in the progress of the Copyright Directive through the European legislative process, following months of furious lobbying. On one side are advocates of the proposed reform, calling for fair and proportionate remuneration to authors, and on the other its critics, concerned about ‘link taxes’, ‘censorship machines’ and the ‘death of memes’. On Wednesday 12 September 2018 the European Parliament moved the reform forward by approving the draft text (containing some 250 amendments since it was voted down in July earlier this year) and adopted its position on the proposed copyright rules. It will now proceed to negotiate with Member States to try and hammer out the final text, before requiring them to put the rules into effect in their national laws. To some, the decision on Wednesday marked a “big step forward”, for others, it was “catastrophic”.

Why are the copyright rules being reformed?

In 2015, the European Commission adopted its Digital Single Market Strategy to “bring down barriers to unlock online opportunities”[1]. As part of this strategy, the Commission explored how EU copyright rules might be modernised for the digital age. The pressures of the internet have arguably reduced the ability of rightholders to enforce their copyright and obtain remuneration for their works. In its press release unveiling its proposed text in 2016, the European Commission stated that the draft Directive would allow for “a fairer and sustainable marketplace for creators, the creative industries and the press”[2].

What’s so controversial?

Significant debate arose in response to the proposed Copyright Directive, which was voted down by the European Parliament in July 2018. The source of the controversy was (and remains) centred on Articles 11 and 13.

In brief, Article 13 places an obligation on music and video-sharing platforms and other online content sharing service providers to put in place “fair and appropriate” licensing agreements with rightholders or to prevent the availability of unauthorised use of rightholders’ works on their services. This is controversial because it is seen by many to undermine the exemptions in the E-Commerce Directive (2000/31/EC) which provide that there is no general obligation to monitor the information on provider’s platforms and that, without knowledge of the infringement, they are not liable for any illegal activity. Whilst the platforms must act expediently to remove or disable access to the infringing content, it is done at the request (and in the UK, following the Supreme Court’s recent decision in Cartier[3], at the expense of) the rightholder. Article 13 is seen by many to turn this on its head by requiring the platforms to actively filter its users’ content. Advocates for free speech are concerned that this would reduce freedom of expression by inhibiting user generated content, parodies and memes.  Furthermore, that these onerous obligations would discourage start-up platforms which would struggle to afford such technologies, resulting in a less competitive market.

Article 11 provides that publishers of press publications be granted rights in relation to the digital use of their content, specifically, a right to prohibit third parties from (i) reproducing their publications, and (ii) making them available to the public without permission. Its aim is to ensure that rightholders are compensated for the use of their copyright material on online platforms such as YouTube and Facebook, or by news aggregators which publish “snippets” of their material. Whilst this is heralded by some as a step towards ensuring fair remuneration for the use of rightholders work, others are concerned by the chilling effect that it might have on news circulation (and in turn, traffic to publishers’ sites) alongside failing to achieve its anticipated effect of ensuring a fair share of the profits. Both Germany and Spain have taken measures to provide similar rights, with questionable results. In Germany, Google News responded by changing its policy so that newspapers had to opt-in to their service which led to criticism that this forces newspapers to waive their rights or face losing visibility to their rivals. In Spain, the equivalent right cannot be waived, which has resulted in Google withdrawing its news service there altogether. However, advocates of the reform question whether Google would realistically withdraw its services from the whole of Europe if the draft Copyright Directive enacted.

Whilst it has been overshadowed by Articles 11 and 13 in the publicity surrounding the draft Directive, the text of Article 3 has also been criticised. This provides an exception to copyright infringement where reproductions and extractions are made in order to carry out text and data mining for the purposes of scientific research by non-profit research organisations and cultural heritage institutions. It is a mandatory exception which Member States would have to enact into their national legislation. This exception recognises the significant opportunities that such technology, namely electronic analysis of large data sets, can bring about. However, there are serious concerns that its application solely to non-profit organisations will limit Europe’s ability to compete in AI research, when other countries, such as Japan and the US, are providing broader exceptions. Many of the companies at the forefront of these technologies are for-profit and others sometimes receive funding with the condition that the recipient finds a way to commercialise its research. Whilst a new Article 3a was inserted following the draft Directive’s defeat in July, providing for an additional less restrictive text and data mining exception which would be available to for-profit companies/organisations, that additional exception is only optional – Member States will not be required to implement it.

What were the amendments?

Following the European Parliament’s rejection of the draft Copyright Directive in July 2018, over 250 amendments were made to the text, described by the European Parliament as “important tweaks”[4].

Immediately notable amendments – clearly aimed at reducing critics’ concerns relating to Articles 11 and 13 – include:

• Excluding small and micro platforms or aggregators from the Directive’s scope, which the European Parliament claims is “an attempt to encourage start-ups and innovation”[5].
• Limiting the rights in Article 11 so that they do not extend to “mere hyperlinks which are accompanied by individual words”.
• The remuneration to publishers for the use of digital content online provided for by Article 11 must be “fair and proportionate”.
• A carve out from Article 11 so that it does not “prevent legitimate private and non-commercial use of press publications by individual users”.
• Any measures taken to prevent the availability of infringing content online pursuant to Article 13 must “not lead to preventing the availability of non-infringing works or other protected subject matter, including those covered by an exception or limitation to copyright”. Platforms must also put in place a rapid redress system, operated by staff and not algorithms, to process complaints that an upload has been wrongly taken down.

Whilst these amendments go some way in trying to address the concerns raised by critics of the reforms, many critics remain unconvinced.

What’s next?  

Now that the European Parliament has approved the draft Copyright Directive and adopted its public position on the copyright reforms, the text will be negotiated at a ‘trialogue’ between the European Parliament, the Council of the EU (formed of ministers from Member States) and the European Commission. The draft Copyright Directive may still be amended before it is approved (or possibly rejected) and therefore lobbying is likely to continue.

The timescales for considering and potentially adopting the Copyright Directive are uncertain. It will remain to be seen whether the Member States are required to transpose it into national law before, or within a period inclusive of, March 2019 when the UK is scheduled to leave the EU, and whether the UK will do so.   If it is not required to do so before this time, the UK could seek to harmonise its laws with any possible Copyright Directive or to distinguish its laws from it. This could well produce a fresh battlefield for further, targeted lobbying efforts: the draft Copyright Directive may have some way to go before it reaches Britain’s shores.

Sarah Blair

[1] https://ec.europa.eu/commission/priorities/digital-single-market_en

[2] http://europa.eu/rapid/press-release_IP-16-3010_en.htm

[3]  [2018] UKSC 28

[4] http://www.europarl.europa.eu/news/en/press-room/20180906IPR12103/parliament-adopts-its-position-on-digital-copyright-rules

[5] http://www.europarl.europa.eu/news/en/press-room/20180906IPR12103/parliament-adopts-its-position-on-digital-copyright-rules