This article is part of our special report Digital single market.
SPECIAL REPORT: The European Commission will need to referee a tussle between creators and users of online content before launching a proposal to reform copyright law next year.
The initiative – set to be proposed by Günther Oettinger, the Commissioner for Digital Economy and Society, forms part of the priority Digital Single Market strategy.
Under current European rules (Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society), individual member states can lay down limitations and exceptions in their national legislation in order to define the appropriate balance between remunerating authors (including publishers) for their work, and exploiting the potential of content.
In practise, that means that online behaviour including links to newspaper articles and blog posts, or web sites including footage embedded from existing on-line video material, can all be illegal under current interpretations.
EU member states adopt differing approaches to exceptions to copyright, making for a confusing mix offering little certainty to companies wishing to roll out pan-EU services. Instead these are left to deal individually in each member state with relevant copyright collecting societies.
Consultation points up the lines of dispute
The Commission wants the copyright rules to fit the new digital reality, so that citizens and businesses will have online access to digital services between and across the EU’s own borders.
How that is going to pan out exactly remains to be seen. Günther Oettinger is working with a special committee of the European Parliament on the issue.
“We need to bring the copyright legislation to the 21st century,” said Pavel Svoboda, a Czech centre-right MEP (European People’s Party) who is the chairman of the legal affairs committee. “Our aim is to anticipate the copyright reform and ensure we hear all the interested parties,” he said after the first meeting of the special group held with Oettinger in Strasbourg last year (17 December).
The working group will start its work in earnest this month and aims to take hearings from “all the actors of the creative industry” over the next half year.
“We intend to present concrete and innovative proposals to the Commission, ensuring the right balance between the right holders protection and easy access for consumers,” according to the group’s coordinator, Jean-Marie Cavada a French MEP from the Alliance of Liberals and Democrats for Europe (ALDE).
The EU executive already realises that the issues see a clear division of sentiment and objectives between internet users and artists contributing to content.
A consultation on the review of the rules completed last year saw battlelines formed.
Consumers told the EU executive that when seeking to view a video online on YouTube, they were blocked by national collective management organisations for copyrighted content, such as Germany’s GEMA.
Others signaled the lack of access to popular video on demand services such as Netflix and the BBC iPlayer, which are currently only available to the residents of some member states.
Music services such as iTunes and Spotify were also panned by users for either not being accessible in certain countries, or only featuring a limited online catalogue compared to offers in other member states.
“The experience is all the more frustrating, some say, when it happens to people seeking to view or listen to content from their home country when in another EU country,” according to the Commission’s own summary of the findings.
By contrast, authors and performers argued there is no demand for cross-border services, and therefore no business case for it.
Whilst the issue is less relevant to the music sector – in which publishers commonly grant multi-territory licences – the majority of broadcasters claimed there was little incentive to provide services across borders.
Consumer viewing habits, demand, language, the ability to provide consumer support in more than one language, and the cost of marketing were all cited as reasons.
Collective rights – a third factor
Collective rights management organisations (or CMOs) active in the audiovisual sector, told the EU executive that it would be impossible for them to offer multi-territory licences, unless a framework to remunerate audiovisual authors is established.
Many member states are watching the debate uneasily from the sidelines, hoping that new reforms can emerge by a magical combination of market forces and consensus between the different parties.
Another thorny issue to be determined relates to internet hyperlinks, where the vast majority of consumers told the European Commission that links to protected subject matter should not be subject to authorisation by the rightholders of that material.
Some authors and performers, by contrast, believe that authorisation should be required for embedded links within websites.
Here member states disagree. Most consider that hyperlinking does not amount to an act of communication to the public and therefore rightholders’ authorisation is generally not needed.
Other member states, however, consider that a hyperlink constitutes an act of communication to the public which should be subject to rightholders’ authorisation when it enables direct and immediate access to content.
The idea of creating a copyright registration system at EU level represents another key user/author fault line in the debate, with the former in favour and the latter opposed.
Authors and performers are concerned about the quality of data that would be collected for the purposes of registration, and in general the additional registration costs that might be involved.
Collective management organisations (CMOs) CMOs generally consider that an EU registration system would be unnecessary, complex and an administrative burden.
Member states agendas differ
Pressure for reform is now coming in different forms from the member states.
The UK last year passed a law that legalised private copying by individuals without any requirement for additional compensation to artists. Two years ago Spain replaced copyright levies with a government compensation fund.
Last December, Finland joined these states in determining to scrap levies on digital devices. The Finnish Parliament voted in December to replace a levies system that has existed since 1984 with the creation of a government fund designed to compensate artists for private copying of content such as music and movies.
Finnish MEP Henna Virkkunen, a member of the European Parliament committee on industry research and energy, described the new compensation system as “fairer to consumers and better for artists because they will get more compensation this way.”
For its part the Commission is watching developments in the member states.
“We will monitor the implementation of the law to see whether it delivers the objectives set by the Spanish government,” a spokeswoman told EURACTIV in relation to the Spanish law change.
Proposal next year will see two sides refereed by Commission
“President Juncker has asked Vice-President Ansip and Commissioner Oettinger to take ambitious legislative steps towards a connected Digital Single Market, notably by modernising copyright rules in the light of the ongoing digital revolution, so it is of interest for the Commission to follow national developments in this area,” the spokeswoman said.
Meanwhile a joint Franco-German government initiative is seeking to clip the wings of over-the-top internet providers such as Google, arguing that their share of that market is uncompetitive.
It is not clear whether that will feed into the copyright review, but some officials believe that a special tax for such companies might account for copyrighted content linked to in web searches.
The Commission has not yet decided whether the proposal will come in the form of a directive or regulation, but its bigger decisions will come in deciding how to arbitrate the dispute between the two sides of the internet generation.