What to make of the European Directive on Copyright in the Digital Single Market

The European Directive on Copyright in the Digital Single Market (the Directive) was proposed in 2016, and has been the subject of significant opposition and debate since its conception.

Despite this, in February 2019, the Directive was agreed by the European Council and since then, the Directive has moved through the European parliamentary procedure relatively easily with the European Parliament debating the Directive, and voting in favour of it (albeit with some amendments), at the end of last month.

Shortly before the final vote took place a small number of Member States released a joint statement saying they were unable to support the Directive. However, EU Member States approved the European Parliament’s decision in a vote on April 15. Whilst the number of Member States who voted against the Directive were not enough to stop the Directive coming into force, it is demonstrative of the strong feelings against the proposal.

What are the concerns?

{mosads}The Directive seeks to reduce the gap between technology giants and smaller players. Alongside this, a key aim of the Directive has always been to ensure that content creators such as authors and composers are afforded the same protection for their work in the online world, as in the offline.  This led to the introduction of two of the most criticised provisions: the ‘link tax’ (originally article 11, now Article 15 in the latest version); and the ‘meme ban’ (article 13 in the original proposal, now Article 17).

Article 15 requires providers of “information society services” (which includes news aggregator sites) to pay publishers for using extracts of their articles in an attempt to ensure that such publishers (and therefore authors) receive appropriate compensation for the use of such extracts. The revised introduction to the Directive notes (at paragraph 58) that “The use of press publications by information society service providers can consist of the use of entire publications or articles but also parts of press publications. Such uses of parts of press publications have… gained economic relevance.”

The final version of the article limited the obligation a little, by expressly excluding simple hyperlinks, or “the use of individual words or very short extracts of a press publication,” although the lack of clarity about what this means in practice, or the charges that may be imposed, has meant that criticism of the provision is unlikely to recede. 

Article 17’s effect is such that “online content-sharing service providers,” such as Twitter and YouTube, which host user-generated content will potentially be liable for any unauthorized communication of copyright protected works. This means that they may have to enter into licenses with rights holders, and where unable to do, established sites over a certain size (measured by value and monthly unique visitors) will have to use their “best efforts” to search for, remove and prevent further uploading of infringing content. 

{mossecondads}The provision, whilst stating that its application should not “lead to any general monitoring obligation” (Article 17(8)) does require sites to take a proactive approach to the protection of copyright works (currently, copyright owners must enforce their rights, and platforms are only required to remove infringing content once notified).

The concern with the former Article 13 was that the wide requirement to look for and remove copyright material would capture popular internet tools such as “memes.” However, as we reported on our IPTech blog, the revised wording now includes an exclusion in Article 17(7) for “quotation, criticism, review [or] use for the purpose of caricature, parody or pastiche,” and so may be seen as a minor victory for site owners, although this only deals with some of the concerns that have been raised. 

How strong is the opposition?

Whilst some major music and media organisations have been in favour of the Directive for some time, and over 200 creative organisations recently signed an open letter in support of it, many in the tech industry have spoken out against it, with parties such as YouTube and Wikimedia openly expressing concerns (although YouTube do consider the revised text to be an “improvement”).

Across Europe there has been considerable reaction to the Directive, with Forbes reporting on both the change.org petition opposing Article 13, to which more than 5 million have put their names, and a recent protest march in Germany. 

What happens now?

Now that the Directive has been approved by a majority of EU Member States (including the UK), the Directive will be published in the Official Journal, and become law.

However, the Directive will not have direct effect and so each Member State will need to transpose it into their national statute books. This could mean that the laws look slightly different in each territory (creating an additional level of complexity for businesses operating across countries), although the Commission will provide (nonbinding) guidance and the opportunity for stakeholder dialogue to promote best practice.

There also remains the possibility of a challenge to the Directive, even if approved, and the CJEU can recommended that a Directive be annulled in whole or in part (as happened with the previous incarnation of the Tobacco Products Directive). Such challenge, even if ultimately not successful, could further impede the implementation of a Directive which has been, and remains, controversial.

Carlton Daniel is a partner in the Intellectual Property & Technology team at Squire Patton Boggs, based in the firm’s London office.