Copyright Directive: Has the EU Broken the Internet?

Introduction

On the 15th of April 2019, the European Council approved the Directive on Copyright in the Digital Single Market (the Directive). The controversial Directive has been staunchly criticised and many claim it could see the death of the internet as we know it. The Copyright Directive aims to bring intellectual property law into the digital era. The previous Copyright Directive dates back to 2001 when many of  the dominant online forces of today were yet to be created. There are two key articles in the new legislation which have sparked controversy, here’s what they say;

  • Article 11 (a.k.a the link tax) requires companies who share press publications to “share” their revenue with the relevant “press publisher”. This Article targets content aggregators such as Google News whose services consists of sharing third-party news article.
  • Article 13 will impose liability on social media platforms for failing to prevent the sharing of unlicensed copyrighted material. The rules under Article 13 apply to services that have been available for more than 3 years or to any company with an annual turnover of more than €10m. Individuals will also be liable for sharing such copyrighted material without permission.

The legislation was approved by the EU Parliament approved by 348 votes to 274. Parliament also rejected an amendment to remove Article 13 by just 5 votes. EU member states will now have 24 months to embed the directive into national law and so the specific details of the legislation will be finalised at member state level. This article will explore the Copyright Directive and whether it poses an existential threat to the internet.

What does the Directive mean for the internet?

The Copyright Directive, as it stands, does pose a legitimate threat to the current operation of the internet. The Directive is draconian yet worryingly ambiguous. The scope of liability for breaches has increased drastically yet the crucial practical details have been left wide open to interpretation. This creates the possibility for disparity in obligations within different member states.  This could result in online media companies simply adopting the strictest rules for their platforms to ensure their service can operate in all member states. The implications of this are severe.

Article 11

Article 11 in practice, requires media companies to pay licences to content producers for the rights to post links to the articles. Companies will be banned from sharing links with more than “brief snippets” without such a license. Member states will have the discretion to ban link share containing more than a word. Furthermore, no clear definition of “snippets” has been provided. This directive could see 28 different definitions of “snippets” ranging from one word to one paragraph until some precedence is set in the courts. This is hugely problematic for content aggregators. Even for large aggregators for the potential license costs could be too substantial. This is shown by Google’s warning that it may have to shut down its Google News service due to this article.

Small business and individuals

Small businesses are not exempted from the link tax. Publishers have the right to charge for sharing links or even ban sharing of links altogether. This means that publishers could prevent critique of their work by small companies through imposing such a ban. Individuals and non-commercial uses of publications are however, exempted from the link tax.

Publishers

Article 11 could even be harmful for publishers, the supposed beneficiaries of this Directive. Content aggregators such as Google News provide significant streams of traffic. If they require licenses to share just one word, many would opt to shut down the service. Google has predicted that the Directive could see publishers lose up to 45%1 of traffic under the directive.

Article 13

Article 13 now makes social media platforms liable for copyright infringement by their users. Under current legislation platforms are only required to remove copyrighted content when instructed by rights holders. Now companies must show they made best efforts to show no unauthorised material is shared on their platform. Users will also be liable for copyright infringements. Many viral memes are based on copyrighted images so this Article has been labelled the “meme-ban” .

Scope

The potential scope of responsibility is astonishing. There are no legal obligations for persons to register their copyright. The overwhelming majority of creative content is automatically copyrighted upon production; therefore, every internet user could potentially be a rightsholder at any given time. Even if companies obtained licenses to share copyrighted material from all major media companies, this would even not begin to suffice. Companies will need to meticulously restrict the content they share and for social platforms, comprehensive filters appear the only way to protect themselves. The only issue is that content filters of this scale and efficiency have not been developed. If the Directive is applied strictly, the software would need to pre-screen all user uploaded content against a regularly updated database of copyrighted content, both registered and unregistered. This is a potential minefield for SME social media platforms. While the Directive adopts a best efforts approach to liability, what constitutes best efforts in practice is still open for debate. In addition, if platforms must retrospectively identify unauthorised content previously posted by users, this creates another enormous challenge.

Filters

The Directive mentions the use “content recognition technology” as a means of preventing unauthorised use of copyrighted material. This would require companies to filter everything uploaded by users or buy licenses for anything that their users may upload. YouTube already operates a Content ID system which is able to identify copyrighted material. Google has already spent $100 million on ContentID but currently, it can only identify content of a few specific rights-holders. The cost and difficulty to roll this out to every potentially rights-holder is hugely problematic. For smaller companies, content filters of this scale are practically unfeasible.

In future, developers could create copyright filter products which firms can seamlessly integrate into their platforms. With tech giants still scrambling to create their own software however, the prospect of a comprehensive product is still in the horizon.

Creating effective filters is difficult and legitimate material is likely to be blocked. Blocking unauthorised content is already exceptionally challenging for social media firms. Notably, Facebook is facing staunch criticism for failing to filter and take down extremist videos. It will take some drastic  development and investment in the next two years for Facebook to accurately identify copyrighted material, particularly given the complex nuances of copyright law. In addition, companies must have an appeals system in case legitimately shared content is removed. The administrative task of handling appeals is significant. The drastic widening of the scope of liability could be fatal for the internet as we know it.

Conclusion

The Copyright Directive poses a substantial threat to the sharing culture of internet. The EU has been rightly keen to regulate online tech giants to prevent the exploitation of users and related industries. In this case however, they have thrown the baby out with the bathwater.  The online giants will inevitably adapt but the Directive hugely threatens SME internet-based companies. The costs of identifying practical obligations and then implementing them appear far too great for many SMEs. Smaller publishers may also suffer from reduced traffic. This may lead to only larger publishing surviving in these affected spheres, causing a centralisation of online media and a rise in fake news. The foreseeable closure of smaller online publishers would create less diversity of opinion on the web. Fake news publishers would undoubtedly charge less than reputable sources therefore their content is likely to be shared more widely. Even the sharing of memes on social media is threatened. Many popular memes are derived from copyrighted material so platforms may soon block such content through filters.

Taking all into account, this Directive is likely to stifle of sharing of content. As a result, instead of providing producers with their due renumeration, it could dry up their income. Whether this Directive will break the internet fundamentally depends on how member states transpose and enforce it. Watch this space meme-lovers. ority50 \l

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