The European Parliament has adopted its position on the new Copyright Directive which is intended to harmonise aspects of copyright law in the digital single market.

Whilst the text of the new Directive is not yet fixed, two key articles have attracted lots of attention. These concern attempts to better balance the interests of big online platforms (YouTube, Facebook, Google, etc) – which make money from providing access to other people’s material – against the interests of those that actually make the material. The platforms will see their royalties shrink if it becomes easier for copyright owners to monetise their work when used by those platforms. But the changes are not welcomed by all: some creators of memes and parodies, as well as online providers, are concerned that the proposed new restrictions will limit the freedom of the internet.

The ‘link tax’

One part of the Directive will require online platforms to pay license fees when they use a third party’s material. Critics have dubbed this the ‘Link Tax’, arguing that it will result in only a few providers being able to pay the required fees to offer news aggregation services. However, by requiring payments, it could support the revenue base of traditional publishing businesses. The adopted position also includes a requirement that individual journalists should benefit from the license fees paid.

Many people are not concerned by large platforms having to pay for material. But there is no clarity as to what is a commercial platform as opposed to private and non-commercial use (which would be exempt). An individual blogger or RSS feed might avoid the need to pay license fees. But what if they receive advertisement payments due to the size of their audience or if they sell merchandise?

As currently drafted, simply sharing a hyperlink would not need a licence. Nor would the inclusion of individual words on an online platform. However, there is no guidance as to when unlicensed individual words become a licence-requiring snippet.

This type of law has been tried in Spain and Germany. In both cases traffic to news aggregators fell (hitting their negotiating power with advertisers) and the large platforms stopped using sites that wouldn’t allow free sharing.

Closing the gap between sharers and creators

The Directive’s most controversial provision aims to close the ‘value gap’ between the sums made by content sharing platforms and those made by the people whose works are exploited on those platforms. Platform providers will have to work with rights-holders to stop users uploading copyrighted material. This potentially puts a burden on platform providers and may lead to the inadvertent blocking of lawful content as the volume of potential claims leads them to take a ‘safety first’ approach.

Critics also point to the potential for this to restrict free speech by censoring material. European Parliament’s intention is to make online platforms and aggregators liable for copyright infringements.

In a bid to reassure creators of memes and parodies, it has been suggested that the steps taken by platforms must be designed to allow use of lawful material, such as quotations and parodies. But what constitutes lawful material when relying on exemptions differs across member states. And there will always be a risk when providing user generated material as not all users understand that they cannot always include third party material.

From a practical point of view, there are no software filters currently available which can distinguish between lawful and unlawful material.

And that’s not all

Whilst the above provisions are receiving most of the attention so far, the new directive has other measures aimed at tightening up copyright. There are provisions which concern how text and data mining are used. There is also an added provision that could give sports leagues control over images or footage of a game. This could extend to fan photos of a stadium before the game and elements taken within a game.

Watch this space

As mentioned above, the Directive’s text is not fixed and representations will continue to be made by interested parties. UK businesses will be watching carefully to see whether the Directive is passed before Brexit.

This blog post was written by CTM partner, Rob Lucas. For further information, please contact:

Rob Lucas, partner, Commerce, Technology & Media team

T: 0113 204 1176

E: Rob.Lucas@gateleyplc.com 

Sophie Brookes, partner, Corporate team

T: 0161 836 7823

E: Sophie.Brookes@gateleyplc.com

This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.