Musings, Pentacles

The EU Copyright Directive and its impact

EU flag with copyright symbol

The EU Parliament has given its blessing to the new Copyright Directive which aims to strengthen the position of EU-based creators – filmmakers, actors, musicians, journalists and writers – when negotiating with publishers and producers. It should lead to a fairer system of exploitation of their works and performances, but a lot of people, including academics who have reported on this issue, seem to believe the Directive will actually lead to less available content, legal confusion that can be taken advantage of, and more censorship within Europe.

The “Directive on copyright in the Digital Single Market” seeks to ensure that the online world and the internet are on par with the offline world when it comes to giving creatives, news publishers and journalists what they are entitled to. It applies to all for-profit online services, except marketplaces and cloud services like Dropbox. 

Google, Facebook and such platforms often imply that artists, news publishers and journalists should be happy their work is circulating freely and when they actually pay a fee, it’s usually a tiny fraction of what the platform or aggregator is making. In contrast to what platform lobbyists – this Directive has been one of the most lobbied of all times – seem to suggest, the new Copyright Directive does not create any new rights for creatives and journalists, nor does it in se create new obligations for online platforms and news aggregators. It does, however, represent the first decent attempt to create a level playing field. 

However, the Directive has serious flaws. It all starts with the Directive being a political instrument rather than a well-wrought attempt to create a legal framework for the future. The lobbying on the US-side was not terribly successful, but the lobbying on the EU-side from giant European publishers seems not to have fallen on deaf ears. In fact, MEPs like Julia Reda, a member of the German Pirate Party, part of The Greens–European Free Alliance, found the original draft submitted to the European Parliament lacking a fair balance between the rights of content consumers and publishers, while producers’ rights – creators – were nowhere to be seen (See: Reda, Julia. ‘EU Copyright Reform: Our Fight Was Not in Vain’. Julia Reda (blog). April 2019. https://juliareda.eu/2019/04/not-in-vain/).. 

Her group managed to restrict Article 17 (which used to be Article 13), which risks forcing platforms to implement so-called upload filters, to for-profit platforms. The restriction to services which “play an important role on the online content market by competing with other online content services, such as online audio and video streaming services, for the same audiences” can also be written on their account, although that made it into a recital, rather than the article itself. 

Reda’s group also took care to insert the fair remuneration clause. She adds that even though the text didn’t end up banning so-called “total buyout contracts”, Article 18 does establish fair remuneration of artists as a fundamental principle at the EU level for the first time.  In the Commission’s draft, creators were not mentioned as if they are not involved in content creation.

The group also ensured that digitisation of a work of which the copyright has already expired will not lead to having copyright applied to it again. The availability of out-of-commerce works, as well as the fact that the Directive represents the minimum standards rather than levelling down, were also the group’s doing.

Furthermore, the Directive is flawed in that it won’t unify national law across the 27 (or 28, depending on Brexit’s outcome) Member States. After publication in the Official Journal of the EU and contrary to, for example, GDPR, Member States will have to transpose the Directive into their national legislation within 24 months, creating uncertainty and non-uniform rules across the EU. As the Directive is a minimum standard, it allows countries with a more restrictive copyright regulation to keep theirs, while other countries with a less restrictive regulation than the Directive provides for will be forced to adjust their copyright laws so it at least matches the Directive’s rules.

Fair licensing agreement

One of the most important minimum rules states that producers to which creators have assigned their rights will have to share how and where a workpiece is used and which revenues are generated. The reasoning behind this obligation is that authors and performers tend to be in a weaker contractual position when they grant licences or transfer their rights, so they need the information to evaluate their value. They can then compare that value to the fees they receive for the licence or rights transfer. 

In the case of long-term contracts, a contract adjustment mechanism will need to be put in place that allows a creator to get a bigger share of their success if the originally agreed fee is clearly disproportionate to the generated revenues. This does not apply to marketplaces like eBay or stock image websites, for example, but it does to all creators, including, for example, screenwriters. It requires producers, publishers and platforms to negotiate contracts that are fair to the creator and allow them to revoke the work when it’s not exploited. What is fair is not regulated by the Directive.

Article 18 does establish fair remuneration of artists as a fundamental principle at the EU level for the first time

The main targets of the Directive are the producers, publishers, platforms and aggregators who benefit from your work and that is, of course, squarely in the face of the likes of YouTube, Facebook and Google News. It is hoped that the rules will force them to strike fair licensing agreements with artists and media houses who have identified themselves beforehand as the owners of a piece of work. This, the EU legislator claims, is not censorship as some will have it, but the introduction of legal liability applying to the platforms. In practice, it could well be that the platforms won’t bother and will block access to users across the entire EU.

Youtube beware

If you create a video and post it on Youtube, you’ll have to be paid a fee that can increase with the number of hits – advert views – your video receives. If there’s no agreement, the platform will be directly liable if they host a piece of work with an unpaid licence fee and you, the right-holder, has the ability to sue them.

But imagine you’ve created a movie that uses a scene containing a song performed by one of Europe’s performers at one of our festivals. You haven’t asked permission to the singer/songwriter and you upload the video to Youtube.

In that case — and without considering you were illegally capturing the performance in the first place — Youtube will need to make a best effort to obtain an authorisation (either by having the songwriter to agree to free usage or pay her a fee) and, when that’s impossible and the necessary and relevant information proves the content is unauthorised, remove your video and also make a best effort to prevent future uploads (the so-called ‘stay down’ provision). In this example, it would apply to videos uploaded by both EU- and non-EU nationals as there’s an EU-artist involved.

Because this becomes unwieldy when dealing with millions of uploads a day, quite a few people oppose this Directive as they fear it likely the platforms will block users from uploading content by installing so-called AI-based upload filters and we all know how accurate they are.

All of this becomes less stringent when you’re uploading to an online service provider which has been active less than three years in the EU and whose turnover is less than 10 million Euros with a visitor-base of less than 5 million monthly users. Those smaller players will avoid liability for unauthorised works by proving they have made their best efforts to obtain an authorisation and have acted expeditiously to remove the unauthorised works notified by right-holders from their platform. The ‘stay-down’ provision applies to them if they have over 5 million users a month.

How EU’s Big Publishing won a battle but not the war

When press publications went online, news aggregators and media monitoring services sprouted up as weed in a garden. These are built on a business model that has been frustrating Europe’s big publishing companies for some time now. That model is based on the free – free as in ‘gratis’ – reuse of at least part of a publication, a “snippet”. Sometimes those snippets are half the article, sometimes they are exactly that – small bits of a piece that summarise the entire article. 

Google’s defence – because we’re speaking of Google, of course, where the money is – has always been that publishers ought to be quite happy with the traffic the links generate as people click through on the links beneath those snippets.

Unfortunately, that’s not how EU publishers see the world. They have not been amused by seeing their advertising income water down due to Google and other platforms using their content and making a lot of advertising money off those snippet/link combinations because of their gargantuan traffic numbers. 

The “Directive on copyright in the Digital Single Market” seeks to ensure that the online world and the internet are on par with the offline world when it comes to giving creatives, news publishers and journalists what they are entitled to.

To them, the EU Directive was meant to become a vehicle for forcing Google’s arm and either share some of the cake or stop using those pesky snippet/link combinations. Often, this reflex is seen as the last quiver of a dying breed of publishers who don’t know how to cope with the new business models the Googles and Facebooks of this world force upon the rest of us. That is what we have been led to believe in the past decade. However, even in the US, where these platforms have been founded, the tide is turning.

I scoured the Internet and found different views on the subject, with an article by Peter Thiel, the only one that clearly states Google is a monopoly. Other commentators were not so sure (See Baer, Drake. ‘Peter Thiel: Google Has Insane Perks Because It’s A Monopoly’. Business Insider. 16 Sep 2014. https://www.businessinsider.com/peter-thiel-google-monopoly-2014-9. But for contrasting views, see also ‘Is Google a Monopoly?’ s.d. https://www.cnbc.com/video/2018/11/01/is-google-a-monopoly.html, Investopedia. ‘Is Google Becoming A Monopoly?’ Investopedia. 3 Jun 2015. https://www.investopedia.com/articles/investing/060315/google-becoming-monopoly.asp).

The EU, on the other hand, is pretty sure it is and punishes the company with draconian fines (See ‘Google Fined Nearly $1.7 Billion for Ad Practices That E.U. Says Violated Antitrust Laws’. Washington Post. 20 Mar 2019. https://www.washingtonpost.com/technology/2019/03/20/google-fined-nearly-billion-ad-practices-that-violated-european-antitrust-laws/).

Publishing companies are finding it hard to attract advertisers as the business model Google and Facebook use, depend on visitor numbers. The higher these numbers, the more advertising money a website – potentially – collects, but the difficulty is to attract enough visitors – readers in this case – when the average attention span has been reduced to a few seconds. Charging high enough advertising fees to compensate for smaller numbers of readers who engage with an add is not working, either, due to a price erosion that – ironically – has been caused by Google’s very cheap per-click ads.

Earning money in this new world of publishing has got some publishers to embrace the concept of reader sponsorship – donations, actually – of which the Guardian newspaper is the most successful example (See ‘Support the Guardian | Make a Contribution’. s.d. https://support.theguardian.com/eu/contribute).

The Guardian pulls off this trick because of its worldwide appeal and high-quality content. However, most smaller, more locally oriented publishers cannot – even country-wide publications have too few readers willing to pay for content as most can read English – and what could be easier than lobbying with the EU to be recognised as right-holders who have enforcement rights regardless of the publishing platform or medium.

One of the problems with protecting publishers’ rights online, however, is that close to everyone can be considered a publisher these days, regardless of the content being “fake news” or well-thought-out information. The uprise of “fake news” – which my generation used to call the much less friendly and more correct “disinformation” – has allowed publishers to position themselves as the protectors of reliable content, even if that’s not always guaranteed (See Fichtner, Ullrich. ‘Manipulation Durch Reporter: SPIEGEL Legt Betrugsfall Im Eigenen Haus Offen’. Spiegel Online, 19 December 2018, sec. Kultur. https://www.spiegel.de/kultur/gesellschaft/fall-claas-relotius-spiegel-legt-betrug-im-eigenen-haus-offen-a-1244579.html).

Still, not to affect non-journalistic publications, it was necessary to define what a press publication actually is, so that it would only cover journalistic publications published in any media, in the context of an economic activity that constitutes a provision of services under EU law. It was decided that press publications contain mostly literary works, but increasingly include other types of works and other subject matter, in particular photographs and videos. 

Periodical scientific or academic publications, such as scientific journals – not science-based magazines the likes of National Geographic Magazine and EOS – are not covered by the protection granted to press publications under the Directive. The protection also doesn’t apply to websites, such as blogs. Blogs are defined by the EU lawmakers as: “websites that provide information as part of an activity that is not carried out under the initiative, editorial responsibility and control of a service provider, such as a news publisher.”

The rights granted to publishers of press publications also don’t extend to acts of hyperlinking or to mere facts reported in press publications. Quotations for purposes such as criticism or review are exempt as well.

Conclusion

When the Commission originally proposed the new Directive, it was far more detrimental to individual users’ rights and freedom than it is now. In this respect, the Parliament has done a good job. You and I can keep on linking, quoting, etc, as we did before. Scientific research won’t be hampered much by this Directive, either. But on the whole, the Directive does not reflect the transformation of the ways we look at intellectual property and how creators should be rewarded for their efforts.

The Directive risks worthwhile content to be harder to find from within the EU, while clever users will quickly find ways to break through the fence – essentially creating a two-speed Internet: that of users who know how to manipulate technology and exploit it to the fullest and those who only know how to browse and click a button.

Luckily, the Directive has few to no other consequences for individual users. Member states are required to also protect the free uploading and sharing of works for the purposes of quotation, criticism, review, caricature, parody or pastiche. The right for individuals to link, to use snippets in links – linking to your video containing a still frame of the festival or even a 5-second clip should be OK – and share content with others has also been protected thanks to the work of MEPs like Julia Reda.