This week MEP Julia Reda shared an unpublished report of a study examining the effects of copyright infringement on sales of creative works. Apparently the contract for the economic research was tendered by the Commission in 2014 for €360,000. It was completed in 2015 but never published, and Reda received a copy of the report after several freedom of information requests.
The background of the study hinges on the assumption that “illicit use of copyrighted material reduces revenues of rights-holders and thus their incentives to produce content.” (p. 19). As our friends at EDRi are pointing out, this assumption is one of the underlying motivations for the Commission’s deeply flawed crusade against open online platforms. So what does the research show? From the report (our emphasis):
In 2014, on average 51 per cent of the adults and 72 per cent of the minors in the EU have illegally downloaded or streamed any form of creative content […] In general, the results do not show robust statistical evidence of displacement of sales by online copyright infringements.” (p. 7)
This result is not shocking. Many online content providers are finding that users will pay for content when that content can be conveniently accessed at a fair price—hence the significant growth of popular online film and television streaming services like Netflix. But this is not the narrative that the Commission wishes to promulgate, as it doesn’t fit their worldview. Or more accurately, it doesn’t align with the interests of the incumbent content industries, who, as we’ve argued, want nothing more than “to minimize the impact of the fundamental changes brought about by digital technologies and the internet on legacy business models.”
One assumes that the findings from this study would have been a useful input into the Commission’s proposal for the Directive on Copyright in the Digital Single Market. And surely it would have been interesting to creative sector economists, the startup and technology communities, consumer rights organisations, civil society advocates, and the public at large. Instead, the Commission pushed ahead and introduced restrictive copyright reforms that blindly tries to stop something, which according to research commissioned by the Commission itself is not a problem.
This incident makes a few things crystal clear: 1) the Commission has confirmed it has no interest in pursuing evidence-based policymaking, and 2) freedom of information laws are an increasingly vital tool by which to shed light on the shady workings of some public institutions.
Two weeks ago we highlighted the fact that six EU member states had asked questions to the Council legal service about the legality of Article 13 of the proposed Digital Single Market directive. Yesterday it emerged that the government of Germany also has serious concerns about Article 13 and asked its own set of questions to the Council legal service. As our friends at copybuzz.com point out, this move by Germany adds a lot of weight to the questions raised by Belgium, the Czech Republic, Finland, Hungary, Ireland and the Netherlands before the summer. While the questions asked by the German document more or less mirror the concerns of the other six member states, there are also some important differences.
A lot of the concerns raised by the six member states centered on the relationship between the Commission’s proposed Article 13, user rights granted under exceptions and limitations, and the rights enshrined in the EU fundamental rights charter. In contrast the intervention by the German government seems to be motivated by a different set of concerns. In the introductory paragraph of the document they write (emphasis ours):
We welcome the fact that the Commission has addressed the matter of how to fairly distribute the value created by internet platforms. We must ensure that creative individuals receive fair pay, also if their work is available on the internet. Concurrently, platforms must not be jeopardised in their function as a societal medium of communication. Moreover, it must be ensured that the competitiveness of European enterprises and the freedom of scientific communication are not impaired.
Based on this is seems clear that the German government is primarily worried about the potential negative impacts that Article 13 would have outside the narrow confines of the music industry. The German government is concerned that the Commission, driven by the the music industry’s desire to cripple the liability exceptions of the E-Commerce directive, will undermine the economic basis for much of Europe’s digital economy.
A threat to the digital economy and academic research
Similar to the six member states before it, the German government is not at all convinced that the Commission’s proposal will leave the legal principles established by the E-Commerce directive intact. From the German point of view this is especially worrisome as the liability exceptions apply to many platforms other than the video sharing and social media services targeted by the music industry. And while the music industry is without a doubt an important contributor to the EU economy, so are other sectors that rely on online platforms and the protections granted by the E-Commerce directive (see for example this excellent report by the Open Forum Europe and the Free Software Foundation Europe that highlights how Article 13 would create substantial burdens for collaborative software development in the EU). Continue reading
Last week (the same day that we published an updated version of our position paper on article 13) our friends at copybuzz pointed to a paper by The Max Planck Institute for Innovation and Competition on article 13, published in response to a set of questions raised by six EU member states over the summer. As we have reported here, the questions related to the relationship between the measures proposed in article 13 and recital 38 of the Commission’s proposal and the existing EU legal framework (the E-Commerce Directive, the InfoSoc Directive and the Charter of Fundamental Rights of the EU).
The questions posed by the member states already implied that article 13 and recital 38 would violate a number of legal concepts established by existing legislation. The answers provided by the Max Planck Institute confirm this. As the paper, authored by Prof. Dr. Reto Hilty and Dr. Valentina Moscon points out, there are serious problems with all 4 aspects of the proposal that have given rise to the member state’s queries. Based on their analysis the Hilty and Moscon come to the same conclusion as we did in our own position paper:
Therefore, it is inadvisable to adopt Article 13 of the proposed Directive and its respective Recitals, 38 and 39. (page 2)
This opinion is based on an analysis that finds that the Commission’s proposal would create legal uncertainty, would risk conflicting with the user rights (exceptions and limitations) granted by the InfoSoc Directive, would be inconsistent with the E-Commerce Directive, and could enable abusive behaviour that threatens fundamental human rights, such as the freedom of expression and information.
A scathing takedown of the Commission’s Proposal
All in all, the responses to the questions posed by the six member states read as a scathing takedown of the Commission’s Proposal. Continue reading
Today we are publishing an updated version of our position paper on Article 13 of the European Commission’s proposal for a directive on Copyright in the Digital Single Market. Since we have published our original position paper in January of this year, Article 13 has generated an enormous amount of discussion and has emerged as the most contested part of the Commission’s proposal. The discussions within the parliament and among the Member States are still ongoing and so far there is no clear indication where these talks will end.
In the updated policy paper we re-iterate our concerns (a few of them have recently been taken up by a group of Member States in a set of questions to the legal services of the Council), analyse proposals for amending the Commission’s proposal that have been adopted in the European Parliament, and provide a set of recommendations. Our key recommendation remains to delete article 13 from the proposal as it addresses a problem that lacks empirical evidence confirming its existence. Article 13, as drafted by the Commission, would limit the freedom of expression of online users and create legal uncertainty that has the potential to undermine the entire EU online economy. As such it is unworthy of being included in a Directive proposal that is intended to modernize the aging EU copyright framework.
Read the updated position paper below. If you are familiar with the issues at hand and/or the previous version you may want to jump straight to the updated part.
Position paper: EU copyright should protect users’ rights and prevent content filtering
Article 13 of the European Commission’s proposal for a Directive on Copyright in the Digital Single Market attempts to address the alleged disparity in revenues generated by rightsholders and platforms from online uses of protected content (the so called “value gap”). The proposed article attempts to do this by introducing an obligation for “Information society service providers that store and provide to the public access to large amounts of works” to filter user uploads. It would also require these providers to set up licensing agreements with rightsholders.
These proposed measures are highly problematic as they violate fundamental rights of users, contradict the rules established by the E-Commerce Directive, and go against CJEU case law. The measures proposed in the Commission’s proposal stem from an unbalanced vision of copyright as an issue between rightsholders and infringers. The proposal chooses to ignore limitations and exceptions to copyright, fundamental freedoms, and existing users’ practices. In addition, the proposal fails to establish clear rules with regard to how citizens can use protected works in transformative ways—such as remixes and other forms of so-called “user-generated content” (UGC). As a result, a system of this kind would greatly restrict the way Europeans create, share, and communicate online. Continue reading
Hot on the heels of last week’s leak of a (rather depressing) Estonian council compromise proposal that contained two bad proposals for the upload filter comes another leak of a council document. Apparently not all EU Member States are convinced that the Commission’s plans to require online platforms to filter all user uploads is such a good idea! Statewatch has just published a document containing written questions from the governments of Belgium, the Czech Republic, Finland, Hungary, Ireland and the Netherlands to the council legal service regarding article 13 and recital 38.
These questions clearly show that these Member States have serious doubts about the Commission’s repeated assurances that the proposed censorship filters would not affect users’ fundamental rights, do not change the liability exemption of the e-commerce directive, do not constitute a general monitoring obligation and do not change the definition of what it means to make copyrighted works available online.
All of these questions may sound like technical details but they are not. Instead they are at the heart of the discussion about article 13 of the commission’s proposal. Since the commission presented the proposal, a broad coalition of civil society, technology companies and academics has pointed out the problematic relationship between the commission’s proposal and fundamental rights and the principles established by the e-commerce directive.
Member States have serious doubts about legality of upload filters
The music industry organisations are the driving force behind the attempt to censor user uploads and regain control over the ability of millions of online creators to express themselves online. Together with the Commission they have flat out denied that the proposed in article 13 and recital 38 would change existing EU law. The fact that the six member states have formally asked the legal service of the Council (which is independent of the Commission) shows that they are not buying into this narrative. Continue reading
Summer is definitely over in Brussels and in member states – everyone seems to be back to work, which means in our case back to the copyright discussion. Yesterday Statewatch published a first compromise proposal by the Estonian Presidency. The document refers only to parts of the Commission’s draft directive, namely Articles 1, 2, and 10 to 16. From the very beginning we have been involved in the discussions on ancillary copyright for press publishers (Art. 11) and the upload filter (Art. 13). On both of these issues the Estonian proposal contains two different approaches, each a fact which further highlights how divisive these provisions are among the member states on article 11. One of the versions somewhat improves the Commission’s proposal while the other one makes it much worse. On article 13 both versions would make the Commission’s already terrible proposal even worse.
Ancillary copyright for press publishers – to be or not to be?
On the issue of new rights for press publishers the Estonian compromise proposal does not really present a compromise. The two versions mark different sides of the spectrum. On the one hand a version that would enact a massive expansion of the rights of publishers that goes well beyond the Commission’s proposal that dealt with rights in digital uses of press publication only. On the other hand, we have a version that does not create new rights while still giving publishers tools to act against infringement.
The first option (which can probably be attributed to France) expands the original bad European Commission’s proposal if it comes to the scope of the ancillary copyright from digital publications to publications published in any media, including on paper (in the proposal the article would also apply to videos and photos). What is even worse, hyperlinking is explicitly included in the scope, as long as such links constitute a communication to the public (in the absence of clear guidance this would open a whole new can of worms). This version would be a clear win for big publishers, and a major restraint for free flaw of information online. Continue reading
Tomorrow the Members of the Culture and Education Committee of the European Parliament (CULT) will vote on their position on the proposal on Copyright in the Digital Single Market directive. This will be the second vote in the European parliament after last month’s vote in the IMCO committee. While the CULT committee is nominally responsible for Culture and Education it seems rather likely that tomorrow’s vote will result in an one sided opinion that would support the key elements of the flawed directive, making them worse in many areas. Below is a quick rundown of what is on the table during tomorrow’s vote. We have listed voting recommendations for CULT MEPs interested in enacting real copyright reform that will foster Europe’s cultural and educational sectors:
Expand the scope of the text and data mining exception
We have argued many times that Text and Data mining should not be covered by copyright at all. A TDM exception such as the one proposed by the Commission would then be unnecessary. Any TDM exceptions enacted in spite of this would need to be as broad as possible both in terms of beneficiaries and in terms of purpose. Unfortunately the compromise amendment on the issue does nothing to broaden the scope of the proposed exception and merely reaffirms the Commission’s backwards looking proposal. MEPs should reject the compromise amendment and vote for AMs 337, 356, 360, 362 and 364 Instead.
Broaden the education exception to fit the needs of education in the 21st century
On the proposed education exception the Culture and Education committee seems intent to abandon the needs of 21st century educators. Instead of improving the Commission’s half-baked proposal, the compromise amendment reaffirms or worsens the most problematic elements of the proposal: Continue reading
Politics is full of plot twists and we have witnessed that today during the IMCO Committee vote on its opinion regarding the copyright directive proposal. The new rights for publishers that seemed to be red line for so many Parliamentarians have made their comeback. The upload filtering provisions have been removed—despite some MEPs’ efforts to make them even stronger. If the reform package was actually a coherent vision instead of a wish list of shortsighted interventions, we could be celebrating an entirely different vote.
The upload filter is gone, the e-commerce Directive is intact
In a surprising move, the Committee adopted the EPP proposal to include Article 13 as drafted by LIBE rapporteur Michal Boni into IMCO’s opinion. IMCO rapporteur Catherine Stihler supported these amendments over the compromise she had made with other Parliamentary groups: S&D, ECR, ALDE, GREENS and GUE. Since it was quite clear that the deletion suggested by some Committee Members is not an option for this article, it is seems like one of the best possible outcomes that MEP Boni’s proposal has been picked up by IMCO.
Rapporteur Boni’s take on how platforms should cooperate with rightholders offers a rational distinction between entities falling under the scope of Article 13 and those protected by the e-commerce directive exemptions. It also steers clear of content recognition and technological measures as the go-to solutions for shaping that cooperation regarding MEP Stihler’s compromise amendment.
Red line? What red line?
The big surprise of the IMCO vote is the U-turn it took on the issue of new rights for press publishers (a.k.a “the link tax”). Rapporteur Stihler proposal to delete all of Article 11 had gained some traction in the Committee, which resulted in about a dozen other IMCO Parliamentarians also tabling provisions to remove it. In the vote, however, the amendments to delete were almost entirely rejected. The Commission’s version of Article 11 has been adopted with some tweaks: hyperlinking would not fall under the new right, and the new law would not be applied retroactively.
Earlier today MEP Julia Reda has published two documents containing “EPP alternative compromise amendments” to the IMCO draft opinion on Copyright in the Digital Single Market directive. These documents propose alternative “compromise” AMs on the proposed publishers rights (article 11) and on the so called “value gap” (article 13). Both documents have been drawn up by MEP Pascal Arimont, the EPPs shadow rapporteur in IMCO and contain the most brazen attempt so far to push through a rightsholder agenda that goes even further than the commission’s flawed proposal. While it is unclear how much support these amendments have it is very clear that they express extremist positions rather than “compromises”.
Press publishers über alles
The first set of “compromise” amendments deals with article 11 and the associated recitals and represents an unprecedented land grab on behalf of press publishers. As part of this “compromise” proposal MEP Arimont wants to extend the term of protection for the new publishers right from 20 years (as proposed by the Commission) to 50 years. In addition he proposes to extend the right to include academic publications (which were explicitly excluded from the commission’s proposal) and also applies it to analogue uses.
This massive extension of the publisher’s rights will still be very unlikely to generate new income streams for publishers, not to mention delivering on the promise to ensure journalists get an “appropriate share of the remuneration”. Instead, it will cause substantial collateral damage. Libraries and other cultural heritage institutions will suddenly see themselves confronted with a new class of rightsholders who can make claims for publications that have been published many decades ago. As a result libraries will likely need to take archival collections off line and spend additional resources on clearing rights.
The EPP proposals will also introduce massive uncertainties for anyone linking to press publications online. According to the proposed language any hyperlink that contains “the key information which was to be conveyed” would be infringing. The proposed standard is as ridiculous as it is impractical. Unfortunately this does not seem to register with the EPP MEPs responsible for these “compromises” who are clearly willing to throw everyone else under the bus in their attempts to grant press publishers new exclusive rights. Continue reading
We were hoping that the Committee on Civil Liberties, Justice and Home Affairs (LIBE) rapporteur Michal Boni would make use of the Committee mandate to suggest deletion of entire article 13 from the proposed Directive on Copyright in Digital Single Market. That didn’t happen. The justification of the report reflects a hope that the idea to regulate agreements between platforms and rightholders can be sustained while respecting fundamental rights of users. But do the LIBE amendments meet that goal?
Looking beyond technology
The very good news is that Rapporteur Boni proposes to remove content recognition and all references to the use of technology as a default option from the directive. MEP Boni also explicitly says in his report that the implementation of the agreements should not impose any general monitoring obligations.
Here the report builds nicely on theapproach paved by the JURI’s rapporteur MEP Comodini in her report. The removal of references to technology opens the path to looking for a variety of solutions in negotiating the division of revenues between service providers and rightholders. No doubt that technologies will be employed to verify if content is uploaded legally. But the EU copyright legislation should not require a direct connection between the business discussion on who the revenue should go to and the surveillance of users uploading stuff on a platform. Continue reading