By: Sarah Teitelman, Esq.
Christopher McHattie, Esq.
On March 26, 2019, the European Parliament approved the highly controversial Directive on Copyright in the Digital Single Market (the “Directive”), enacted the first major change to copyright regulation anywhere around the globe in decades. The Directive was proposed in order to harmonize and modernize European copyright laws to better address the issues confronting authors and artists on the changing digital landscape. When first proposed, the reforms quickly became controversial resulting in a two-year battle between content creators, artists, media companies and music labels, who championed the Directive, and technology companies like Google and Yahoo, who vehemently opposed the Directive.
Content creators argued that the Directive was necessary to ensure that they were fairly paid for their content while technology companies argued that the Directive would require them to create and implement upload content filters, thus hindering the free flow of information. Siding with the technology companies, internet activists argued that the Directive would suppress free speech by limiting the amount and kinds of information available to users through search engines. More specifically, critics of the Directive feared that the language of the Directive as proposed was overly broad and vague; and as result, would force tech companies to err on the side of content exclusion, even if such content falls under one of the Directive’s “safe harbors.”
Most of the criticism was directed to Articles 11 and 13. Article 11 impose a “link tax” on internet search engines and news aggregate platforms requiring these entities to pay publishers to use links from news websites. This “tax” will only apply if the search engine or news aggregate platform displays more than “single words or very short extracts” of stories. (Not to worry, as a result of the “safe harbor” provision of Article 11, “individuals” are free to continue sharing stories on their social media pages without fear liability.) Article 13 makes large tech companies liable for material posted on their platforms without a copyright license. This regulation completely changes how internet platforms currently monitor content for copyright infringement. Currently, tech companies are the beneficiaries of a “safe harbor” which gives them immunity until they receive a “take-down” request from the music, art, photo or video copyright owner. Under Article 13, the burden is on the tech companies in the first instance forcing them to only allow content they’ve cleared in advance, thus requiring “upload filters.” While upload filter and copyright clearance technology exists, the change is dramatic and will usher forth a new approach to clearing content submitted by users to be posted and claims of copyright infringement.
While upload filters sound like “common sense” in theory, they: i.) are not completely effective; ii.) will likely result in lawful content (including copyrighted material subject to the fair use or parody) being blocked; and iii.) hinder free speech and the “marketplace” of ideas. For example, YouTube spent over $100 million developing its “ContentID” system which was intended to block potentially infringing “uploads,” and to “pull down” content identified as potentially “infringing” a copyright. Many suggest that the YouTube “ContentID” system is the most sophisticated filter on the market, however it is fraught with issues. Copyright owners claim that ContentID has prevented them from uploading their own works on the platform and other users claim that the ContentID system continuously generates “false positive” copyright infringement claims.
As enacted, Articles 11 and 13 read, in pertinent part, as follows:
While the Directive’s regulations are only enforceable in the EU, the impact of these reforms will be felt in the United States as the internet is an inherently “international” regimen. As result, all global tech companies will have to change their practices to abide by the new regulations or otherwise segregate and “silo” their operations. Tech companies are going to have to learn to work with both the Directive (with its affirmative obligations) and the the United States Digital Millennium Copyright Act (“DMCA”) (which put the burden on the copyright proprietor to assert its copyright in the first instance and only makes tech companies secondarily liable if they fail to remove content after receipt of a valid takedown notice).
Moreover, and via the law of “unintended consequences,” EU “readers” my find that the “link tax” forces news aggregators to not promote stories, art, photos and videos that would otherwise have been available as “just not worth the hassle.” While this may not seem like a big deal, the implications are real and massive. Internet search engines and news aggregators may start only reproducing stories that have affordable license terms, that align with the company’s ethos (if you have to pay for it why produce adversary points of view that go against its interests) and not reproduce or make available less affordable content (i.e. works that put a value on reproduction). While a good idea in theory, this will almost certainly limit what’s readily available, shrink the breadth and content of “search results,” suppress free speech by limiting the amount and kinds of information available to users and otherwise result in a shrinking of the “marketplace of ideas.” The United States remains the “freest” society in the world, and we believe the DMCA putting the burden on the copyright proprietor, who might enjoy the free publicity and notoriety, is the right approach. While the Directive does not take effect for two years, it is time to start considering the implications to your company, and to consider whether the Directive is a good idea, a bad idea, or perhaps a good idea that just missed the mark a bit.
For further information on copyrights, please feel free to contact us.