The EU just told data mining startups to take their business elsewhere

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The European Commission's changes to copyright law will hurt startups that rely on data mining, writes Lenard Koschwitz. [Analytics Vidhya]

Startups will be hurt by a restriction on text and data mining in the European Commission’s proposal to change EU copyright law, writes Lenard Koschwitz.

Lenard Koschwitz is director of European affairs at Allied for Startups.

The European Commission is working on some policy changes to improve the situation of startups in Europe, but at the same time it wants to prevent startups from using text and data mining technology. Later this month, the Commission will propose rules on copyright that will benefit data analytics – but only for non-commercial research. That means you can develop an idea or algorithm in a European university and mine the data there, but you won’t be able to transform the results in a scalable and successful startup in Europe.

Mining is the automated processing of large amounts of digital information to discover new trends and knowledge. Data analytics can improve weather forecasts, extend the lifespan of devices and machines and predict a crash before it happens.

How did this happen?

With very fragmented and outdated rules on copyright, the European Commission set out to ‘modernise and harmonise the European copyright framework’. It’s an ambition that makes a lot of sense for the EU’s plan to complete the single market and enable startups to thrive on this side of the Atlantic.

Up until now, there haven’t been clear rules on text and data mining in Europe. The majority of Europe’s 1.6 million startups rely on data analytics. It’s hard to think of a startup that doesn’t use the power of data to get new, more accurate and smarter insight from data that’s already available for free on the web. While the Commission has identified the potential of text and data mining, it failed to understand that it’s startups that use the technology most.

Text and data mining for non-commercial research institutions only

A draft proposal for the new EU-wide copyright law says that “text and data mining can in particular benefit the research community and in so doing encourage innovation”.

The Commission wants European governments to ban all copyrights on data made public by research institutions. By explicitly allowing this for one group, the new law de-facto invites copyright holders to crack down on anyone else. Startups with small legal departments are an easy target for copyright enforcement.

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“The right to read is the right to mine,” but not if you’re a startup

People have the right to read whatever is out there, but the same right does not apply for a machine. This amounts to legal limbo for all startups that contribute to a rich and healthy big data scene in Europe.

The Commission previously considered introducing a policy that would not only boost research but also startups and innovation, meaning more jobs and growth. However, the executive later decided that this would “interfere with the TDM licencing market in the commercial sector, mainly in the area of life science”. If the Commission wanted to protect publishers from losing out on this marginal business, it could give them time to restructure an outdated business model or simply make an exemption for life science of health data. Instead it chose to disregard the majority of the digital economy and “confirm Europe’s 19th century vision of the online world.”

Even worse, the Commission thinks that startups ‘were not directly concerned’ with text and data mining, but still acknowledges the ‘prevalence [of TDM] across the digital economy’. Another passage of the Commission’s justification mentions ‘indirect positive effects’ for the startup community but doesn’t go into detail. But now the Commission is preventing those positive effects.

Startups and innovative businesses are actively discouraged

By enabling the development and creation of big data for non-commercial use only, the European Commission has come up with a half-baked policy. Startups will be discouraged from mining in Europe and it will be impossible for companies to grow out of universities in the EU.

Faced with a lack of evidence backing up this decision, European startups will have to raise their voice to the maximum to nudge policy makers in the right direction. Considering that the Commission has demonstrated deeper knowledge of Europe startup scene with other policy decisions, this weirdly biased position in copyright is surprisingly negligent.

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