Sarah Blair’s analysis of the European Copyright Reform for the ABA IP’s Journal

12.03.2019

First published in Landslide Vol. 11 No. 4, ©2019 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

The last two years have seen ferocious lobbying in relation to what many call Europe’s proposed “copyright reform” law. Following the European Commission’s implementation of its Digital Single Market (DSM) strategy, a draft copyright directive (a European legislative act that member states of the European Union (EU) must enact into their national laws) was proposed in September 2016 and has since been making its way through the
European legislative process. It has engaged the likes of Paul McCartney, Adele, Wikipedia’s Jimmy Wales, and U.S. tech giants such as Google and Facebook, as opinions have been voiced in support of or in opposition to the draft directive. Seen by some to be a necessary tool to rebalance the rights of content creators against the power of Silicon Valley tech giants, it has been purported by others to signify the destruction of the Internet and the so-called “death of the meme.” So controversial was the initial draft text of the proposed directive that the European Parliament voted against it in July 2018. However, following various amendments—which still leave many of its opponents concerned—September saw the amended text being adopted. The proposed directive has moved to the final stage before the vote, expected to be in spring 2019, to decide whether it is (or, less likely, is not) enacted into EU law.

This article provides a background to the EU legislative process, the context of the EU’s copyright reform, and an overview as to why the proposed copyright directive is so controversial. It will conclude with a brief comment on the consequence of Brexit for the United Kingdom in relation to the possible enactment of this reform.

EU Copyright Law and the Legislative Process

Copyright law in the EU is currently comprised of numerous directives that seek to harmonize the rules concerning copyright (and intellectual property more broadly) across the EU. These directives lay out the rules which individual EU member states must achieve through their transposition into national law, in contrast to regulations which have direct effect upon their being adopted. EU legislation is legally binding on each of the 28
EU member states, and will prevail should it conflict with national law. The Court of Justice of the European Union (CJEU) acts as the final arbiter of any questions concerning the interpretation of EU law, and whether a member state’s national laws achieve the intention of the EU legislation.

The European bodies responsible for passing legislation, among their other duties, include:

  • European Commission: This politically independent body is charged with promoting the interests of the EU as a whole and proposes and enforces legislation. It is comprised of 28 commissioners, one from each of the EU member states, in addition to its president (currently Jean-Claude Juncker of Luxembourg). This arm was established in 1958 and is based in Brussels, Belgium. The European Commission proposes laws for adoption by the Parliament and the Council.1
  • European Parliament: The European Parliament passes and enacts EU law. The members of the European Parliament, of which there are 751, allocated in accordance to each member state’s population size, are directly elected and represent its 500 million inhabitants. It was established in 1962, with the first direct elections being held in 1979, and is based in Strasbourg, France; Brussels, Belgium; and Luxembourg.2
    Council of the EU: Formed of government ministers from each member state, it is the Council’s role to adopt EU laws and coordinate EU policies, alongside the European Parliament. It was established in 1958 and is based in Brussels, Belgium. This is not to be confused with the European Council or the Council of Europe, which are different bodies, the latter of which is not an EU body.3
    EU Copyright Law Reform

EU copyright law is stemmed from and in accordance with the 1886 Berne Convention, to which there are now more than 176 contracting parties (including the United States and all EU member states). The Berne Convention protects copyright works and their authors by providing the minimal protections for which each contracting party must grant and provide reciprocal protection.

Through directives, the EU has sought to harmonize some of the specifics of these rights across its 28 EU member states—for example, the exclusive rights that member states must provide to the authors of copyright works,4 the duration of copyright protection,5 and the enforcement of intellectual property rights (including copyright).6

In May 2015, the European Commission adopted its DSM strategy, which “aims to open up digital opportunities for people and business and enhance Europe’s position as a world leader in the digital economy.” 7 As part of this broad strategy, the Commission identified that the EU’s copyright laws needed modernizing to be fit for purpose in an increasingly digitalized global economy.

Among the issues subsequently identified by the European Commission, and the main source of the controversy surrounding the copyright law reform, was the need for clarification of the rules concerning online platforms and their increasing involvement in copyright content distribution online. The European Commission acknowledged that digital technologies have changed how copyright content such as TV, music, films, radio, and books are produced, accessed, and distributed. While this has significantly broadened their audience, it has also reduced copyright owners’ control over their works and has led to what is frequently referred to as the “value gap.” This is the “gap” between the revenue made by user upload services such as YouTube, Facebook, and Twitter and the revenue returned to the content creators or owners.

The value gap is evidently a key driver for the rationale behind the EU copyright law reform. The first draft of the copyright reform directive was produced for the European Parliament’s consideration in September 2016. Alongside its release, the European Commission’s president, Jean-Claude Juncker, stated in a press release: “I want journalists, publishers and authors to be paid fairly for their work, whether it is made in studios or living rooms, whether it is disseminated offline or online, whether it is published via a copying machine or commercially hyperlinked on the web.”8

The first draft was rejected by the European Parliament in July 2018. It was consequently sent back to the European Commission for further amendment before being put to the vote again in September 2018. On this second attempt, the vote carried the copyright reform directive, and it is now the adopted position of the European Parliament. The adopted text is now being negotiated in “trialogue”: closed-door discussions between the European Parliament, the Council of the EU, and the European Commission. It may or may not be further amended before the European Parliament votes on whether it will be adopted into EU law. While the proposed law could still be defeated and rejected, it is unlikely at this stage of the legislative process.

What is so controversial?

The source of the controversy surrounding the EU’s copyright reform is centered on Articles 11 and 13 of the proposed directive. While this directive, if passed, is to complement the rules laid down in the directives currently in force,9 many of those on each side of the debate consider that it will significantly alter—for better or for worse—the landscape of EU copyright law.

Article 13

Article 13 places an obligation on certain “online content sharing service providers” (online platforms, such as YouTube, Google, Twitter, and Facebook) to put in place “fair and appropriate” licensing agreements with copyright owners (referred to as “right holders”) for the use of their works on the platforms. If right holders do not wish to conclude licensing agreements, online platforms must prevent the availability on their platforms of
the unauthorized copyright-protected works.

Proponents of the copyright reform directive consider Article 13 to be an important advancement to address the value gap and to achieve fair remuneration to authors for the online use of their works. A group of 165 directors and screenwriters drew up a declaration in support of the directive, obtaining more than 18,700 signatories from over 100 countries worldwide.10 The declaration states that the draft copyright directive is necessary to “ensure freedom of expression and independence of creators as well as authors’ rights” and considers that the proposed measures will make a “big difference” to the positions of creators in the industry.11 Many support making online platforms explicitly liable for the content on their platforms, to acknowledge the increasingly active role they play in making copyright content available online, for their own profit-making purposes.

Its opponents, on the other hand, see it as a significant threat to the Internet as we currently know it.

Internet service providers (ISPs) have previously relied on safeguards provided by an existing EU directive known as the “E Commerce Directive,” which exempts ISPs from liability for infringements taking place on their services of which they have no knowledge or control.12 Another important safeguard provided for in the E-Commerce Directive and heavily relied on by ISPs is that there is no obligation on them to actively seek facts or
circumstances indicating illegal activity. Platforms consequently rely on notice-and-takedown procedures whereby a right holder can alert the platform to infringing activity and request that access to it be removed. A consequence of the copyright reform directive will be that those falling within the directive’s definition of online platforms may no longer be able to rely on these exceptions and will become liable for the infringing activity of their users.

The original draft of the copyright reform directive, which was rejected by Parliament in July 2018, provided that online platforms would have to put measures in place to prevent infringing content being available on their services, such as the use of effective content recognition technologies. In an open letter to Parliament, signed by prominent figures such as Tim Berners-Lee (inventor of the World Wide Web) and Jimmy Wales (cofounder of
Wikipedia Foundation), a group of critics acknowledged that the draft directive is “well-intended” but stated that Article 13 is an “unprecedented step towards the transformation of the Internet from an open platform for sharing and innovation, into a tool for the automated surveillance and control of its users.”13 The critics further suggested that it would inhibit smaller companies and European startups from entering the market consequent to the prohibitive costs of implementing such measures.

Other criticisms of the draft directive include the so-called “death of the meme” (the use of a picture or video clip that has been amended in some way, such as the overlay of a humorous phrase, which is copied and shared by Internet users). The underlying concern was that user-generated content might be caught and removed by such filtering measures, irrespective of whether it constitutes an infringement of copyright or falls under an exception.

The draft directive that was approved by the European Parliament in September 2018 incorporated various amendments in a bid to address these concerns. Most prominently:

The definition of online platforms was significantly narrowed so that Article 13 will not apply to microenterprises; small and medium-sized enterprises; providers that act in a noncommercial purpose capacity, such as online encyclopedias; and other services such as cloud services for individual use, open source software developing platforms, and online marketplaces. Instead, it now only applies to information society service providers (ISSPs). A service is an ISSP if one of its main purposes is to store and give access to the public to a significant amount of copyright-protected works or other protected subject matter uploaded by its users, which the service optimizes and promotes for profit-making purposes.
The reference to specific filtering measures was removed from Article 13 and replaced with an obligation to cooperate in good faith to ensure that unauthorized protected works or other subject matter are not available on their services. Article 13 states that such cooperation will not lead to preventing the availability of noninfringing works and that the automated blocking of content ought to be avoided. Complaints and redress mechanisms must also be put in place, subject to human review, for users to dispute any unjustified
removal of their content.

These amendments have done little to assuage its critics’ concerns. The copyright law reform will still provide that online platforms may be liable for the content available on their platforms if they fall foul of the provisions of the copyright reform directive. This is most clearly stated in a new recital—recitals being introductory text to a directive—which was also added by way of an amendment before the vote in September 2018. Recital 37a
provides that an online platform, as newly defined by the adopted text, “cannot benefit from the liability exemption provided for in [the E Commerce Directive].” While recitals are not binding, whereas a directive’s articles are, they provide context and assist with the interpretation of the purpose and intent behind a directive.

Relying on users to expend time and effort to dispute the removal of their content from an online platform also arguably fails to address the concerns about limiting access to legitimate content. Furthermore, given that the exceptions to copyright infringement are not harmonized across the EU (while an existing directive provides an exhaustive list of specific exceptions to copyright infringement,14 not all of these are mandatory for member
states to implement), a user’s ability to rely on a complaints procedure will differ between EU member states. In the United Kingdom, for example, it is not an infringement to use a copyright work for the purposes of caricature, parody, or pastiche,15 but this is not necessarily the case in other EU member states.

Article 11

Article 11 provides that publishers of press publications be granted rights so that they may obtain fair and proportionate remuneration for the digital use of their press publications by ISSPs. Such rights would enable press publishers to prohibit third parties from (1) reproducing their publications, and (2) making them available to the public without permission. Its aim is to secure compensation for the use of press publishers’ copyright
material on platforms such as YouTube, Facebook, and Twitter, or by news aggregators that publish “snippets” of their material, such as Google News. The amendments to the draft copyright reform directive, as approved by Parliament in September 2018, confirmed that hyperlinking, unaccompanied by individual words, would not constitute an infringement.16 It seeks to ensure that the organization and financial contribution of press publishers is recognized and encouraged to ensure the sustainability of the industry and to guarantee the availability of reliable information.17

Critics of Article 11, on the other hand, are concerned by the chilling effect that it might have on news circulation (and in turn, traffic to press publishers’ sites). Similar rights for press publishers have already been provided in Germany and Spain, by way of national laws, and many question the results. In Germany, Google News responded by changing its policy so that newspapers had to opt-in to its service. Many have criticized 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.

Advocates of Article 11 question, however, whether Google would realistically withdraw its services from the whole of Europe.

Next Steps and the Consequence of Brexit for the United Kingdom

The draft directive, as approved by Parliament in September 2018, is now being negotiated between the European Parliament, the Council of the EU, and the European Commission. It may still be amended before it is approved, and, although it is increasingly unlikely at this stage of the legislative process, it could still be rejected. Lobbying is therefore continuing apace.

The final vote is expected in spring 2019. If the directive is approved, EU member states will be provided a transition period in which they must transpose the directive into their national laws. However, with the scheduled Brexit date of March 29, 2019, it remains to be seen whether the United Kingdom will be required to implement the directive before it leaves. In any event, depending on what deal is achieved between the United
Kingdom and the EU, the United Kingdom may no longer be required to harmonize its laws with that of the EU. It could therefore take a different position on these controversial issues in due course.

Author’s Note: Since writing this article, the text of the draft copyright directive has been negotiated and agreed upon at the trialogue meetings between the European Parliament, the European Commission, and the Council of the EU. At the time of this update, the agreed text has not yet been published, although a press release by the European Parliament suggests that there are no substantive changes to the text as approved by the European Parliament in September 2018 (and on which this article is based). The press release states that the agreed text provides that memes and GIFs can be shared freely, as can “very short” snippets of news articles for the purposes of, e.g., Google News newsfeeds. The European Parliament has also confirmed that it will not be imposing filter obligations in relation to Article 13. The text must now be voted on and approved by the European Parliament and the Council of the EU, likely to take place in spring 2019. If, as is likely, it is approved, it will be enacted shortly
thereafter. EU member states will have two years to implement the directive into their national laws.

———————————————————————
1European Commission, EUROPA, https://europa.eu/european-union/about-eu/institutions-bodies/europeancommission_en (last modified Jan. 30, 2019).
2European Parliament, EUROPA, https://europa.eu/european-union/about-eu/institutions-bodies/europeanparliament_en (last modified Feb. 13, 2019).
3Council of the European Union, EUROPA, https://europa.eu/european-union/about-eu/institutionsbodies/council-eu_en (last modified Feb. 13, 2019).
4Council Directive 2001/29/EC, 2001 O.J. (L 167) 10.
5Council Directive 2006/116/EC, 2006 O.J. (L 372) 12.
6Council Directive 2004/48/EC, 2004 O.J. (L 195) 16.
7Digital Single Market, EUROPA, https://ec.europa.eu/digital-single-market/ (last visited Feb. 14, 2019)
8Press Release, European Comm’n, State of the Union 2016: Commission Proposes Modern EU Copyright Rules for European Culture to Flourish and Circulate (Sept. 14, 2016), http://europa.eu/rapid/press-release_IP 16-
3010_en.htm
9See Proposal for a Directive of the European Parliament and of the Council on Copyright in the Digital Single
Market, at 13, COM (2016) 593 final (Sept. 14, 2016); Copyright in the Digital Single Market I: Amendments
Adopted by the European Parliament on 12 September 2018 on the Proposal for a Directive of the European
Parliament and of the Council on Copyright in the Digital Single Market (COM(2016)0593 – C8 0383/2016 –
2016/0280(COD)), EUR. PARL. DOC. P8_TA PROV (2018) 337 [hereinafter Copyright Reform Directive Amendments] (recital 4)
10Venice Declaration (Sept. 3, 2018), https://www.saa-authors.eu/file/475/download
11 Id.
12Council Directive 2000/31/EC, 2000 O.J. (L 178) 1.
13Letter from Vint Cerf, Internet Pioneer, et al. to Antonio Tajani, President, European Parliament (June 12,
2018), https://www.eff.org/files/2018/06/13/article13letter.pdf
14Council Directive 2001/29/EC, art. 5, 2001 O.J. (L 167) 10,16.
15Copyright, Designs and Patents Act 1988, c. 48, § 30A (UK).
16Copyright Reform Directive Amendments, supra note 9, at art. 11(2a).
17Id. at recital 32.

Related Articles