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Copyright in the Digital Single Market: How the new Directive will affect your business

Copyright in the Digital Single Market: How the new Directive will affect your business

Colin Hulme

On Monday 26 March 2019, the European Parliament approved the Directive on Copyright in the Digital Single Market, marking the end of a legislative process that began in 2016.  It will now be up to member states to approve Parliament’s decision over the coming weeks.  If member states accept the text adopted by the European Parliament, the new rules will take effect following publication in the official journal. 

Member states will then have a period of two years to implement the directive (the approved text can be accessed here).  This currently includes the UK, although the UK’s future relationship with the EU remains uncertain.

Who does the Directive apply to?

It is platform owners, rather than individual internet users, who will be most affected by the Directive.  The Directive does not apply to companies less than three years old or with less than EUR 10 million annual turnover, although platforms will have to plan for when these exceptions no longer apply to them.

What are the aims of the new Directive?

According to the European Parliament press release, the directive aims to ensure that “the longstanding rights and obligations of copyright law also apply to the internet.”  Companies such as YouTube, Facebook and Google News are some of the names that will be most directly affected by the legislation.

It is important to note that the directive does not create new rights for rights holders; it merely ensures that existing rights are easier to enforce.  The directive also aims to help rights holders negotiate better remuneration deals for the use of their works when these feature on internet platforms.  It does this by making internet platforms directly liable for the content uploaded to their site.  Now more than ever, YouTube, Google News and Facebook will need to ensure that fair licensing agreements are struck with rights holders and that artists and journalists are adequately remunerated where their work is monetised.

Rights holders will also be able to claim additional remuneration from a distributor exploiting their rights in circumstances where the remuneration initially agreed does not reflect the benefit to that distributor.  

Key provisions

Under Article 17 (formerly 13), internet platforms will be deemed to have performed an act of communication when they provide access to copyright protected works.  Companies will therefore require to enter into remuneration agreements with rights holders and will be liable for any infringing content that appears on their platforms unless they satisfy the following requirements:

  1. Best efforts have been made to enter into a licencing / remuneration agreement;
  2. Best efforts have been made to ensure the unavailability of copyright protected works and other subject matter which have been identified to them by rights holders; and
  3. Platforms act quickly to remove copyright protected works and other subject matter when notified of specific content and then make best efforts to prevent future uploads in accordance with 2 above.

The upshot of Article 17 is that online content sharing platforms will have to check material at the point of upload (or shortly after).  Companies will likely require to invest in software that filters content and employ additional resources for the purposes of policing and enforcing.  The alternative – i.e., entering into blanket licensing deals – will be unrealistic for many.

Article 15 (formerly 11) has provoked similar controversy by requiring news aggregators to pay publishers for linking to their sites (which has come to be referred to as the “link tax”).  This provision has drawn most criticism from Google, who argued that Article 15 would force them to pay publishers for posting extracts from their articles that show up on the news aggregator’s search results.

What does the Directive mean for rights holders?

Whilst the Directive has proven controversial, the introduction of Article 17 will hopefully give content creators better oversight in terms of who is viewing and using their work.  Rights holders will also be better equipped to trace their copyrighted material and identify where it is being shared. 

For content creators, there will be greater clarity in terms of who is accountable for copyright infringement, with liability now extending to online content sharing platforms such as Google and Facebook.  Whether internet platforms will be incentivised to enter into fairer licence agreements with content creators (or whether strict content filters will lead to blanket deletion of content) remains to be seen.

By Colin Hulme
Partner

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