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Final text of controversial Copyright Directive imminent

Posted on 18 January 2019

Final text of controversial Copyright Directive imminent

On 18 January 2019, 11 countries voted against the EU Council's proposed compromise text for the Copyright Directive.  Without a negotiating mandate, therefore, the final discussions with the EU Parliament on the text of the Copyright Directive which, as noted below, were due to take place on 21 January 2019, have been postponed.  We'll update our materials on the Copyright Directive as more information becomes available but our article below focuses on the key issues at stake in relation to Articles 11 and 13.

It has been over two years since the European Commission issued its proposals for a modernised copyright regime 'fit for the digital age'. In that time, we have seen a sustained period of intense lobbying pitting the interests of authors, copyright owners, publishers, tech companies and users against each other. We are now entering the end game, with the final proposed text of the Copyright Directive set to be confirmed in the concluding trilogue discussions on 21 January, with final votes in the Council and the Parliament to then follow, expected to take place in March/April 2019. Once approved and published, Member States will have two years to implement the Directive into their national laws (of course, for the UK, much will depend on the timing and current status of the Brexit negotiations).

The Directive contains a number of provisions of interest, including new exceptions to copyright infringement such as use for text and data mining for certain research; use of out-of-commerce works by cultural heritage institutions; and increased transparency, and fair and proportionate remuneration for authors and performers. However, the focus of the debate, and the lobbying, has been on the two most controversial proposals: the so-called 'link tax' in Article 11, and 'censorship machines' arising from Article 13. In September 2018, the Parliament introduced more controversy with its proposal (in a new Article 12a) that Member States should provide that organisers of sporting events have exclusive rights of reproduction and communication to the public in their events (although it appears that this proposal will not be in the final compromise text).

We discussed the Commission's proposals in our November 2016 bulletin. Here, we update on the current status of the key provisions under discussion. The Parliament has also issued a Q&A on its position, though this has been criticised by opponents.

Article 11: New 'related' right for press publishers

The proposal is for a new 'related right' for press publishers (such as newspapers, magazines, online news websites etc) which will allow them to seek licences for online use of their publications by 'information society service providers'. Key issues concern whether the provision will allow press publishers to waive their rights; exceptions for private and non-commercial use of press publications by individuals (e.g., bloggers), use of insubstantial parts of a press publication ('snippets'), and for text and data mining; journalists' entitlement to share in the revenues publishers receive; and the length of the proposed right (the Commission had proposed 20 years, the Parliament five years, and the Council one year).

Article 11 has been described as a 'link tax'. However, the Parliament suggested that the provision would not apply to "mere hyperlinks which are accompanied by individual words". Many suggest that, in fact, the ecosystem of the Internet requires more than individual words to provide context for a link, and so this proposal will still adversely impact the dissemination of news content to consumers. This is tied up in the discussion in relation to use of insubstantial parts, or snippets.

The provision will obviously impact on news aggregator sites such as Google News.  Google is publicising heavily on social media its Together for Copyright campaign, which has included publishing examples of 'denuded results pages' and articles arguing that the provision will have "unintended consequences for smaller news publishers". This is because it argues it will have to "pick winners and losers" in terms of the publishers with which it enters into licences, with a resulting adverse impact on consumers' access to information. Instead, it suggests that publishers should be given the option to waive the need for a commercial licence. Critics of Article 11 have also pointed in this context to the precedent set by similar laws in Germany (where the law is under challenge, and many publishers have waived their right) and Spain (where the right was not waivable, and Google News left the market). On the other side of the argument, however, press publisher associations such as the News Media Alliance have refuted Google's arguments, stressing, for example, that the Parliament proposed text in relation to Article 11 does not mandate publishers to charge for use of their content, but provides for them to do so, i.e., leaving it up to negotiation.

Article 13: Use of copyright content by 'online content sharing service providers'

The other controversial proposal, which has been characterised as leading to 'the death of memes' through 'censorship machines', is Article 13. The provision applies to "online content sharing service providers" (OCSSPs), which would clearly include sites such as YouTube, but would also extend to other platforms which publish significant amounts of copyright content uploaded by users such as Facebook, Twitter etc. An issue for discussion is whether SMEs and microenterprises should not be considered OCSSPs (non-commercial services, alongside, for example, providers of cloud services for individual use will not be covered).

OCSSPs will be required to enter into  licensing arrangements with right holders in order to communicate or make available their copyright content on their websites (and it appears those licences will then cover acts of uploading by their users, provided they act non-commercially or do not generate significant revenues). Issues for discussion include the efforts that OCSSPs must take to ensure right holders' works that are not licensed are not published. The Council has proposed a 'notice and staydown' mechanism – whereby an OCSSP will not be liable if, upon notice from a right holder, it has acted expeditiously to remove or disable access to the content and demonstrates that it has made best efforts to prevent future uploads. Co-operation between the right holders and OCSSPs should not lead to works that do not infringe copyright (or where an exception can be relied upon, such as parody or criticism or review) being filtered out from upload.

Supporters of Article 13 argue that it will address the 'value gap' between the exploitation of content through online services and right holders, but that it will not create barriers to entry for new entrants to the market. However, the provision has attracted a raft of criticism, amid concerns that it will 'change the Internet as we know it', with a particular focus on, for example, memes and parody uses. The point made is that, even though the reference to 'content recognition technologies' has been removed from the text of Article 13, in reality, OCSSPs will have to use such filtering technology to monitor the content that it is posted by their users. Aside from the concern that this could mean legitimate non-infringing material will not be uploaded, thereby damaging creativity and innovation, it is also argued that it contradicts provisions in the E-Commerce Directive which provide for safe harbours from liability for ISPs, particularly the requirement that there should be no general obligation on ISPs to monitor content.

What happens next?

The final compromise text (which as noted, will be still be subject to approval by the Council and Parliament) that emerges from the trilogue discussions on 21 January is hotly awaited and both those that support and oppose the proposals are ramping up their lobbying efforts as we approach the final stages of this controversial piece of legislation. Given the competing interests involved, it is likely a truly balanced copyright law will be difficult to achieve.

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