The European Parliament proposes "fair and reasonable remuneration" amendments to the proposed Digital Copyright Directive
On 12 September 2018, the European Parliament (EP) voted in favour of a number of amendments to the highly controversial draft Digital Copyright Directive, having voted in July to reject the previous draft.
An article setting out the background to this draft directive and providing a detailed review of the highly contentious Articles 11 and 13 can be found in our SnIPpets blog here. In addition, the following amended sections of the draft directive are likely to spark further debate between interested parties: rightsholders in the creative industry, such as musicians, songwriters, authors, performers, artists, journalists and publishers on the one hand, and those involved in online exploitation on the other:
- New principle of fair and proportionate remuneration
The EP has introduced a new Article 14 which requires Member States to ensure that authors and performers receive "fair and proportionate remuneration for the exploitation of their works", including for the exploitation of those works online, for example by sharing platforms such as YouTube or Facebook and news aggregators such as Google News. In addition, the new Article 14 recognises that such fair and proportionate remuneration may be achieved in each sector through a combination of agreements, including collective bargaining agreements and statutory remuneration mechanisms.
- Stronger negotiating rights for authors and performers
The EP has strengthened the negotiating rights of authors and performers contained in Article 15, by enabling them or their representatives (in the absence of collective bargaining agreements providing for a comparable mechanism) to “claim additional, appropriate and fair" remuneration from the party exploiting their rights when the remuneration originally agreed turns out to be “disproportionately” low compared to the "direct or indirect revenues and benefits" actually derived from the exploitation of their work. Under the previous draft, Member States would only have been required to ensure that authors and performers were "entitled to request additional, appropriate remuneration".
- Increased transparency obligations:
The EP has also reinforced the Commission's transparency proposals contained in the existing Article 14.
Under the Commission's proposals Member States were required to ensure that authors and performers received "on a regular basis … timely, adequate and sufficient information on the exploitation of their works and performances from those to whom they have licensed or transferred their rights, notably as regards modes of exploitation, revenues generated and remuneration due". Under the EP's amendments, Member States will be required to provide "timely, accurate, relevant and comprehensive information" on the exploitation of their works and performances "on a regular basis and "not less than once a year". The EP has also clarified that the reference to "revenues" includes both direct and indirect revenues. In addition, the EP has introduced a mechanism to ensure the new transparency obligations are observed where exploitation rights are transferred.
Together, these amendments are intended to ensure the "high level of transparency" necessary for rightsholders to be able to enforce their new and improved remuneration and negotiation rights.
Not surprisingly, many artists and other copyright holders, who have long argued that the existing law does not provide them sufficient protection particularly in the digital era, have been quick to hail the EP's amendments as a victory for the creative industry. Other industry players have, however, found the proposals far from acceptable, arguing that they will place too great a burden on broadcasters and others in the involved in the exploitation of creative works and do not represent a fair and balanced response to the issue of remuneration.
Although a significant step, the EP vote does not mark the end of the legislative process for, or even final text of, this much debated and highly controversial draft directive. The text adopted by the EP must now be finalised and agreed with the Council and European Commission in a three-way negotiation process. This process is due to start in October but may not reach its conclusion until after Brexit. Whilst the timetable remains uncertain, however, there is no doubt that the progress of this draft directive will need to be closely monitored by all interested parties, whether they find the proposals welcome or unwelcome.