On 12 September 2018, the European Parliament (EP) voted in favour of a number of amendments that have been made to the draft Copyright Directive. This follows the previous vote on 5 July 2018 when the EP controversially rejected the previous draft (see our detailed blog here). Between July and September, over 200 amendments were put forward and these amendments were adopted last week – 438 votes in favour, 226 votes against and 39 abstentions. Some are hailing this a victory for the creative industry as it is hoped the Directive will provide for fair remuneration for copyright holders. Others, however, are up in arms that these provisions will restrict the free flow of content on the internet.
The European Commission (the EU executive body which proposed the original text of the Directive) will now work together with the European Parliament and the Council of the European Union (the EU member state governments) in trilogue negotiations in order to agree and approve what is hoped to be the final text of the Directive.The Joint Statement made by Vice-President for the Digital Single Market, Andrus Ansip, and Commissioner for Digital Economy and Society, Mariya Gabriel, states that, ideally, they would like to approve the Directive by the end of 2018. Other press reports have indicated that the next vote to approve the text will realistically be in January 2019, and even then, this may get pushed back even further depending on the state of the political situation at the time.
In our previous blog, we commented on the opposing views that have hampered the progression of the Directive, largely in relation to Articles 11 (press publishers' right) and 13 (in relation to the "value gap" or "transfer of value"). On the one hand, there has been huge support from rightsholders, such as musicians (including the likes of Sir Paul McCartney and Annie Lennox), songwriters, authors, journalists and publishers, who believe that the proposals will give them a higher level of protection for their online content and will provide a mechanism for them to seek fair remuneration for exploitation of their content on online platforms, such as Google and YouTube. On the other hand, online platforms are deeply concerned that the proposals will put huge pressure on them to police content and that the new law is akin to censorship of the internet.
With hindsight, it now seems that those fiercely opposing controversial Articles 11 and 13 were perhaps given a false sense of hope when the proposals were rejected in July. Some had hoped that the provisions would be re-written, or at best, scrapped. This was not to be the case, however. Although the provisions have been amended, concerns still remain that the proposals are detrimental to the way the internet currently operates.
Article 11 amendments
This concerns the protection for the digital use of press publications and has previously been dubbed the 'link tax'. Article 11 is a new press publisher's right which allows publishers to "obtain fair and proportionate remuneration for the digital use of their press publications by information society service providers" (amended text in bold).
"Press publications" include daily newspapers, weekly or monthly magazines of general or special interest and news websites. Scientific/academic journals are not covered by this right.
The provision was amended to exclude factual information from this right so will not prevent anyone from reporting factual information. It was also amended to include an exception for the legitimate private and non-commercial use of press publications by individual users.
Perhaps of more interest is the amendment relating to hyperlinking to news articles. Article 11 itself, as amended, reads, "The rights…shall not extend to mere hyperlinks which are accompanied by individual words." Whilst it is not 100% clear exactly what this means, it seems that it will still be possible to hyperlink to a news article, using a few words to describe it.
Another amendment to this right entitles journalists to seek a fair share of any of the additional revenues that a press publisher may receive for the secondary use of a press publication by information society service providers.
The revised Article 11 also introduces a reduced term of protection for the press publishers' right. The original proposal was 20 years but the revised Article 11 states that, "the rights.... shall expire 5 years after the publication of the press publication" and "shall not apply with retroactive effect".
Article 13 amendments
Article 13, which has received the most publicity to date, relates to the use of protected content by 'online content sharing service providers' that store and allow access to large amounts of content uploaded by their users. The concern within the creative industries has been that large amounts of copyright protected content has been making its way on to these large online platforms without rightsholders' authorisation and they are not being adequately rewarded for the use of that creative content.
New definition of 'online content sharing service provider'
There is new a definition in the recitals for an 'online content sharing service provider' (previously referred to as an information society service provider) which covers an online provider, "one of the main purposes of which is to store and give access to the public or to stream significant amounts of copyright protected content uploaded / made available by its users, and that optimise content, and promote for profit making purposes, including amongst others displaying, tagging, curating, sequencing, the uploaded works or other subject-matter, irrespective of the means….and therefore act in an active way". This definition refers to enterprises such as Google, YouTube and Facebook. The recital goes on to clarify that these online providers cannot benefit from the safe harbour immunity under Article 14 of the E-Commerce Directive.
The amended Directive does not apply to, and is good news for:
- Microenterprises (employs fewer than 10 persons with an annual turnover and/or annual balance sheet total does not exceed EUR 2 million) and small sized enterprises (employs fewer than 50 persons with an annual turnover and/or annual balance sheet total does not exceed EUR 10 million – as defined by the Commission Recommendation 2003/361/EC);
- Enterprises that act in a non-commercial purpose capacity such as online encyclopaedias (e.g. Wikipedia);
- Providers of online services where the content is uploaded with the authorisation of all right holders concerned, such as educational or scientific repositories;
- Providers of cloud services for individual use which do not provide direct access to the public, open source software developing platforms; and
- Online market places whose main activity is online retail of physical goods.
The likes of Wikipedia (whose Italian arm shut down in protest over the controversial proposals ahead of the plenary vote in July 2018) will therefore heave a sigh of relief, as they rely on contributions from the public. Although there may be some uncertainty surrounding whether some of the files that appear on these online encyclopaedias are actually licensed for commercial use.
Filtering of content
Article 13, as revised, opens with a clear statement that online content sharing service providers perform an act of communication to the public and must therefore "conclude fair and appropriate licensing agreements with right holders". Any agreement concluded will also cover the content uploaded by the users of the online content sharing service, provided the users are not acting for commercial purposes.
The previous requirement for online platforms to use 'content recognition technologies' to identify infringing content has been removed. When rightholders do not wish to enter into a licensing agreement, however, the new proposals introduce a further obligation on online platforms to 'cooperate in good faith to ensure that unauthorised protected works… are not available on their services'. Although the reference to 'content recognition technologies' has been removed, this may just have been to assuage the online platforms who in reality, may still need to use these filtering technologies in order to be able to 'cooperate in good faith' with rightholders and keep any infringing material at bay.
There was also previously an obligation for service providers to put in place complaints and redress mechanisms for users in case of disputes over the application of content recognition type measures. This has now been expanded in the current draft and tougher provisions have been inserted to require online content sharing service providers to put in place "effective and expeditious complaints and redress mechanisms", where there may have been the unjustified removal of content. The provision imposes further requirements for online providers to process any complaint "without undue delay and complaints must be "subject to human review".
The above amendments could be concerning for online platforms because they will be under pressure to ensure unauthorised protected content is "not available on their services". How they will do this in practice is unclear, but presumably, it will involve some form of filtering technology. Further, the requirement for complaints to be subject to human review could be time-consuming and expensive.
New wording in the recitals acknowledges that despite some overlap with existing copyright exceptions and limitations under EU law, such as pastiche and parody, some content that is uploaded or made available by users that reasonably includes extracts of protected content may not necessarily be covered by those exceptions and limitations. The draft proposals therefore envisage a 'new specific exception to permit the legitimate uses of extracts of pre-existing protected works or other subject- matter in content that is uploaded or made available by users'. The new proposal allows for the 'short and proportionate use of a quotation or of an extract of a [protected work].…for a legitimate purpose'. The same caveats apply as those under Article 5 InfoSoc Directive, such as the exception can only be applied in certain special cases and must not conflict with the normal exploitation of the work etc. How this differs from exceptions that already exist in EU and national legislation is unclear, but it does appear to be good news for users uploading popular memes, parodies and remixes which many were concerned would no longer be freely available on the internet.
It is also worth noting that there is a further amendment in the draft recitals that makes it clear that an information society service provider cannot rely on this exception to reduce the scope of their obligations under Article 13. However, Article 13 also says that cooperation between online content service providers and rightsholders should not lead to preventing the availability of non-infringing works, or other content, including any content covered by an exception or limitation. Online platforms should therefore be free to allow memes and parodies and re-mixes to circulate on their platforms, provided they fall squarely within a relevant exception.
The new text of Article 13 also imposes an obligation on the EU Commission and member states, once the Directive has entered into force, to organise discussions between stakeholders to harmonise and to define best practices and issue guidance on the licensing agreements and the cooperation necessary between online content sharing service providers and rightsholders for the use of their works. The guidance will include information on the relevant exceptions that may apply to any content uploaded and will address appropriate measures to ensure that automated blocking of content is avoided. So whilst many may remain concerned about the lack of clarity as to how some of this Directive will work in practice, we have to hope that helpful guidance will be issued going forward.
There has a been a real mix of views after last week's vote - on the one hand, some are hailing this a victory for the creative industry as it is hoped the Directive will provide for fair remuneration for copyright holders such as musicians, songwriters, artists, authors and publishers, but on the other hand, some are up in arms that these provisions will restrict the free flow of content on the internet and put pressure on online platforms to police content more actively.
How the provisions will play out in practical terms remains to be seen. What is also unclear in the UK is whether we will even be implementing these provisions if the implementation date falls after the Brexit date. However, even if the UK did not implement these provisions, there would still be knock on effects in this country.
We must not lose sight of the fact that the vote last week was not final and the current text is not necessarily set in stone. As mentioned in the introduction, the proposals now move forward into the "trilogue" negotiations to settle the final law. This means that the Council of the European Union, the European Commission and the EU Parliament will now need to work together to reconcile their versions of the Directive text, and the final text will again be voted on in the European Parliament, possibly early in 2019.
We will be sure to keep you posted on any updates as and when they occur.