Ahead of today’s discussion of a new copyright mandate in the Council, which would pave the way for a final trilogue at the beginning next week, the situation is becoming increasingly messy. Over the last 24 hours various groups of rightsholders ( Europe’s biggest entertainment company , a number of smaller associations from the Audiovisual sector and an unprecedented coalition of big AV holders and half of the music industry ) have come out against the proposed directive as a whole and Article 13 in particular. With the defection of major music industry organisations from the pro-article 13 movement, the once-united front of rightsholders in favour of Article 13 seems to have completely disintegrated. This makes it clear that the EU copyright reform process has been hijacked by the legacy entertainment industry in an ill-conceived attempt to re-establish their control over the distribution of cultural goods. Under these conditions it starts looking increasingly unlikely that the copyright directive will be adopted before the EU elections later this year.
In part these last minute statements are tactical interventions intended to maximise pressure on the negotiators to adopt rightsholders friendly positions, but they also point to a much more fundamental problem: Copyright is simply not suitable as a tool to support the specific business models of one part of the creative sector without causing massive problems in other sectors. In an environment where pretty much every online transaction somehow triggers copyright, messing with the contours of copyright (especially when it comes to liability for infringement) will have lots of unintended consequences that manifest themselves as collateral damage in other sectors of the digital economy.
Together with large numbers of leading academics we have pointed out from the beginning that Article 13 will be damaging for users’ freedom of expression . We have also argued that Article 13 will consolidate the market power of the dominant platforms while causing collateral damage among platforms that have nothing to do with the sharing of music . These concerns are relatively easy to counter by rightsholders and other proponents because they fit into the classical understanding of copyright as zero-sum game between rightsholders, on the one side, and platforms and users, on the other side. From the very beginning, the declared intention behind Article 13 of the proposed directive was to strengthen the position of rightsholders by weakening the position of intermediaries and users. For many policy makers this seemed to be a perfectly reasonable tradeoff to make, in order to please the music industry.
Clashing business models
Over the past few months, as discussions about Article 13 have intensified, it has become clearer that this is a rather limited understanding of how changes in copyright affect different sectors of the creative industry. Increasing the liability for intermediaries creates risks not only for the big platforms that were the target of Article 13 but also for countless other types of businesses. This has lead to hectic ( but fundamentally flawed ) efforts to exclude certain types of services from the scope of Article 13. More importantly it has also resulted in a Council position that includes “mitigation measures” that try to limit the negative effects of increased liability for platforms. Based on these “mitigation measures” platforms would not be liable as long as they cooperate with rightsholders.
Such cooperation is relatively unproblematic for the original backers of Article 13 from the music industry. Their core business models consists of issuing licenses to as many intermediaries as possible. However, for those types of rightsholders whose business models are based on selectively licensing to the highest bidder (most of the audiovisual industry), a requirement to proactively identify works that platforms need to block is actually a step backwards from the current situation. In other words, an Article 13 designed to boost the business model of one class of rightsholders would undermine the business model of another class of rightsholders. As this tradeoff has become more and more evident over the last few months, voices from the AV sector questioning the wisdom of Article 13 have started to emerge, culminating in the multitude of statements in the last 24 hours.
With rightsholders rolling over the floor fighting, the chances are increasing that the copyright directive will hit the wall for good. This would be a huge not only for the online platforms but more importantly for internet users and, as such, the last minute disintegration of rightsholder-coalition must be applauded. But it also means that copyright has been hijacked by the legacy entertainment industry in an ill-conceived attempt to re-establish their control over the distribution of cultural goods . In the increasingly likely scenario that Article 13 will fall, this will almost certainly mean that the rest of the directive will go down with it as well. This will mean that much needed improvements for cultural heritage institutions, the access to public domain works, and the strengthening of the position of individual creators will not happen for the foreseeable future. It will also mean that the European Union has been unable to adopt its copyright rules to the challenges posed by the digital environment for close to 20 years, which would amount to a declaration of legislative bankruptcy in one of the key areas of digital policy making.
A better alternative: Compulsory collective licensing
Such an outcome would be even more deplorable as the whole drama around Article 13 could have easily been avoided. Instead of falling for the music industry’s fever-dream that by changing the liability system for online intermediaries they could wrest control over the internet from the dominant platforms, the European Commission should have relied on a time-tested tactic from the copyright tool box. Historically, the tool of choice to address free-riding on the creative output of cultural producers by new classes of intermediaries has been collective licensing. It would have been a relatively simple (and largely uncontroversial) intervention to introduce a licensing obligation on platforms providing access to copyrighted works and to couple that with an obligation on rightsholders to collectively license the use of their works in musical platforms. Such a measure would have been second best from the perspective of both rightsholders (who prefer to have the ability to withhold licenses) and platforms (who are incentivised to avoid licenses whenever possible) but as proven again and again in the past it would have worked. And more importantly it would have allowed the EU policy makers to spend their time on adjusting copyright policy to ensure that it does not unnecessarily deprive the public of access to knowledge and culture.
Technically it is still not too late for the legislators to delete Article 13 (and Article 11) from the proposed directive and to move ahead with the rest of it. While unlikely to happen, such a move would go a long way toward preserving the ability of policy makers to constructively shape the EU copyright system. But in the absence of such a move, all that is left for us to do is wondering what that special place in hell looks like, for those who promoted Article13, without even a hint of concern for the collateral damage it would cause.