Digital Single Market – Digital Copyright Directive

This article is part of Ashtons’ series of explainers about the Digital Single Market strategy. Other articles are available about the geo-blocking regulations and the portability regulations.

The Copyright in the Digital Single Market Directive (digital copyright directive) is a proposed directive that, according to the EU Commission, promotes “a fair, efficient and competitive European copyright-based economy.” The high-level aim of the directive is to adjust copyright rules so that “tech giants…share revenue with artists and journalists” and give them an incentive to sign fair licensing agreements with rightsholders.

However, two particular aspects of the directive have proved hugely controversial and been subject to extensive lobbying by industry and EU member states where the possible winners and losers of the changes are based. These are Articles 11 and 13 and both are discussed below.

Political agreement at last

At the time of publishing this explainer, the European Parliament and Council have finally reached political agreement on the final text of the directive. This comes less than a month after progress appeared to have stalled after a key meeting was cancelled. Although the full text of the directive hasn’t been made public, press releases indicate that the directive will include the following terms.

The “link tax”

Otherwise known as the press publication right, Article 11 intends to give publishers more “reproduction rights,” such as to income from sites and search engines that link to their digital content. By developing these rights separate to the copyright in the content of the article, the intention is that the publisher or author will have a stronger bargaining position in license negotiations.

Search engines and news aggregators usually include extracts of the article they link to so that users get a sense of whether it is relevant to their search. The act of providing the link is not restricted or prohibited in any way, and the press releases confirm that reproducing “individual words or very short extracts” will be permitted to help users assess the content of the linked article, but the reproduction of longer extracts of the article or pictures will be prohibited. There appears to be a very fine line between what will be freely reproducible and what requires licensing.

Concerns and exceptions to Article 11

Although large publishers are glad to see Article 11 and lobbied extensively for it, smaller businesses are concerned that they won’t be able to meaningfully negotiate with the tech giants and this could lead to low value licenses or even their articles disappearing entirely from search results. The worst-case effects could be further exacerbated by the ongoing discussions in the US to reduce or entirely remove the net-neutrality rules that prevent internet service providers and search engines from prioritising certain types of traffic, restricting others, or charging for their transmission though their networks.

Note that the press publication right doesn’t apply to individuals sharing articles or content privately for non-commercial means, and it will also expire 2 years after publication.

“Information society service providers”

Even more controversial and widely covered in the press is the new rule in Article 13 which says that content sharing platforms (YouTube, etc.) will be deemed to perform an act of communication when they provide access to copyrighted works. This means they will need licensing arrangements with the rightsholders or potentially be liable for infringing their rights in the content, unless they can show they meet the cumulative exceptions. The exceptions are that the provider:

1. has made their best efforts to obtain authorisation
2. has made their best efforts to take down or make unavailable copyrighted works (and other protected works) which rightsholders have identified to them
3. acts quickly to remove any unauthorised content following a notice received and make best efforts to prevent future uploads.

Online platforms less than 3 years old turning over less than €10 million will not be obliged to prevent future uploads, but will still need to make best efforts to enter into licensing deals and remove specific infringing content that is notified to them.

The verdict seems to be that while it was avowedly aimed at Google and YouTube, Article 13 could have been worse for them. Any meaningful impact on their revenue (and that of the artist) is going to depend on how a court interprets “best efforts” and it would not surprise anyone if they take a robust stance to begin with.

The death of memes?

A lot of press coverage on the first drafting of Article 13 focussed on the possible impact on GIFs and memes, being such popular methods of communication nowadays. The fear was that the effect of Article 13 would mean that each iteration of a GIF or meme would infringe the rights of the owner of the underlying copyright in the image or video, and preventing reproduction would stifle creativity in, for example, viral marketing campaigns, or even just between individuals. However, the EU has now said that they intend that the existing exemptions from copyright infringement, specifically the right to parody, satire, criticism, review, quotation, and pastiche, are protected and will continue to be valid. Which means you can continue to freely share your favourite GIFs and memes.