What do the European Commission’s moves on copyright really mean for the music industry?

October 2016

All areas


In the context of its Digital Single Market Strategy, the EU Commission is currently engaged in a discussion of whether the liability principles and rules contained in the E-Commerce Directive should be amended – and the focus of commentators has shifted to how hosting providers have been increasingly using ‘safe harbour immunity’ in Article 14 – an alleged abuse which has led to a distortion of the online marketplace, and the resulting ‘value gap’ suggested by some right holders.
A proposal has been recently advanced in France advocating the removal – at a European Union level – of the safe harbour protection for hosting providers that give access to copyright works,  to enable the effective enforcement of copyright and related rights in the digital environment, particularly on platforms that disseminate protected content. In particular, the French document considers that the Court of Justice of the European Union (CJEU) has erred in its interpretation and application of relevant principles of online intermediary liability.
Statewatch has now leaked a draft version of the Commission Staff Working Document – Impact Assessment on the modernisation of EU copyright rules and this appears to suggest some of the areas where changes might made: In relation to online services, storing and giving access to user uploaded content, it seems that the EC is considering imposing an obligation on ISPs to seek, in good faith, agreements with right holders to allow the ISP’s users to the use of their content and that ISPs must put in place appropriate and proportionate measures, in cooperation with right holders, to avoid unauthorised content in their services. It also seems the EC is considering introducing into EU law a related right covering online use(s) of news publications and introducing the possibility for Member States to provide that publishers may claim compensation for uses under an exception – and it seems the Commission also wants to give news publishers a new exclusive right covering the online use of their content to give them more bargaining power vis-à-vis search engines such as Google when demanding payment for showing snippets of their articles.


Eleonora Rosati recently completed a new article which addresses some of the points raised by the French proposal.  Her main conclusions are that contrary to the view of the French document, the CJEU has correctly applied relevant provisions in the E-commerce Directive; that the removal of the immunity in Article 14 of the E-commerce Directive for hosting providers that give access to copyright works would not provide rightholders with significantly greater protection than the one already enjoyed under the existing legislative framework, at least as far as their primarily liability is concerned. This is also because the current understanding of the right of communication to the public within Article 3 of the InfoSoc Directive does not seem to suggest that intermediaries otherwise protected by the Article 14 safe harbour could be held primarily liable for the doing of unauthorised acts of communication to the public. Indeed Eleonora opines that the current framework already sets an adequate degree of protection: what is required is a rigorous application in Europe.
But platforms and websites such as Google’s YouTube, DailyMotion and Pinterest are clearly concerned that they could be required by the European Union to seek licenses or revenue-sharing deals with artists for content that is uploaded by their users – to close what it calls the “value gap” and have contradicted claims by the music business that services such as YouTube makes vast sums from ad-supported services, but only a small share of the money goes to the music industry. The EC’s move to ensure platforms seek agreements with rights holders “reflecting the economic value of the use made of the protected content” will come as a welcome change as would an obligation on online sharing platforms to put in place “appropriate and proportionate measures, such as content identification technologies, to ensure the functioning” of the agreements with rights holders.
YouTube itself points to its Content ID, which automatically identifies an artist’s content, to give rights holders the choice of whether to leave it up, block it or monetise it through a revenue-sharing deal. Google says that more than 98 percent of all YouTube copyright removal claims use Content ID and the music industry chooses to monetise 95 percent of its Content ID claims. But rights holders say they do not have enough bargaining power and are presented with a “take it or leave it” deal since the online platforms have no obligation to negotiate with them.
The Initiative Against An Ancillary Copyright For Press Publishers, an initiative established in 2010 with 130 supporters including Google and Yahoo!, was critical of the draft, adding that the neighbouring right proposal is a catastrophe.
The heads of some of the biggest Hollywood studios, commercial broadcasters and European football leagues have urged the European Union to reconsider a planned copyright overhaul they fear will lead to lower investment in films and TV shows. At issue is the so-called “country of origin principle”, which allows satellite broadcasters to acquire the rights for content in their home country rather than in every country where the programme is received by satellite.


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