EU Parliament approves contested Directive on Copyright in the Digital Single Market
Despite substantial push back and lobbying campaigns by Internet companies, online activists and MEP critics, the European Parliament has voted in favour of the Directive on Copyright in the Digital Single Market after a 348 to 274 vote. This does not mean that the Directive has been formally adopted, as it is now up to the different EU Member States to approve the EU Parliament’s text. If the Member States accept the text (which is considered to be a formality), it will take effect after publication in the EU’s official journal, after which Member States will have two years to implement it.
The new EU Copyright Directive, which was originally proposed back in 2016, has been amended several times with discord mainly revolving around the controversial (former) articles 11 and 13. The main objective of the new Directive is not to create specific new rights for copyright holders on the Internet, but rather to better protect, apply and enforce their existing rights in an online environment.
Article 15 (former article 11)
The current article 15 (former article 11), also dubbed the "news article link tax", conceives a new ancillary right for publishers of press publications for the digital use of their published articles.
The article will affect commercial online news aggregators, such as Google News and Facebook, which reproduce more than mere headlines or hyperlinks of news articles, such as short snippets or summaries. These news aggregators will no longer be able to freely use – and make revenue on the basis of – the online press publications of news publishers without concluding a licencing agreement with these publishers. The publishers, on their turn, must provide for a fair share of the revenues for the responsible authors of the articles. This new ancillary right will not, however, affect private or non-commercial uses of press publications by individual users.
Article 17 (former article 13)
The current article 17 (former article 13) introduces a new type of intermediary, the online content-sharing service provider. These service providers will be required to conclude fair and transparent licensing agreements with copyright holders and collective rights management organisations when they (i) store and give access to large amounts of works and other subject-matter uploaded by their users (ii) to obtain profit therefrom, either directly or indirectly, (iii) by organising it and promoting it in order to attract a larger audience. Examples of such online content-sharing service providers include Youtube, Facebook and Soundcloud.
The article will only affect online services that play an important role on the online content market by competing with other online content services for the same audiences, such as online audio and video streaming services (e.g. Spotify and Netflix). As a result, the article does not affect, for example, electronic communication services (such as Proximus), providers of (business-to-business) cloud services (such as Amazon Web Services), or online marketplaces the main activity of which is online retail (such as eBay). Providers of services such as open source software development and sharing platforms, not-for-profit scientific or educational repositories as well as not-for-profit online encyclopaedias (such as Wikipedia) are also excluded from the definition of online content-sharing service provider. A specific exemption for start-ups and SMEs is also provided.
The new liability regime for online content-sharing service providers seems to take account of the existing intermediary liability exemptions laid down in the eCommerce Directive as it does not specifically create a general obligation to monitor infringing content or to install automatic content filters on platforms. However, it does require that the service providers “make best efforts, in accordance with high industry standards of professional diligence, to obtain the necessary authorisation and to ensure the unavailability of specific works and other subject matter for which the rightholders have provided the service providers with the relevant and necessary information”. What exactly constitutes “best efforts” and which measures are adequate to meet this threshold is still unclear. It will be up to the individual Member States to strike the right balance when implementing the new Copyright Directive and avoid disproportionate costs and efforts for service providers trying to meet these new requirements.
We are keeping a close watch on any further developments as the text enters the final stages of approval in the coming weeks and is passed to the Member States for implementation.