The EU Copyright Reform: Will the EU Parliament Fix the EU Commission’s Disastrous Proposal?

As faithful DisCo readers might remember, last September the European Commission published a deeply disappointing proposal for a Directive on Copyright in the Digital Single Market, introducing a widely rejected ancillary copyright for press publishers and undermining the limited liability regime of intermediaries – i.e. the legal foundation of the Internet in the European Union.

Since then, the often bewildering legislative process of the European Parliament has started and several committees have published their respective drafts amending the Commission’s proposal.

This is for example the case for the Internal Market Committee (“IMCO”), whose draft opinion – rejecting entirely the introduction of an ancillary copyright for press publishers (or “publisher’s right”) and limiting the damage done to the e-Commerce Directive – was a first step in the right direction.

This is also the case for the Legal Affairs Committee (“JURI”), which published its own draft report earlier this month after a remarkably extensive and thorough consultation period. As JURI is the lead committee for this proposal within the European Parliament, an in-depth look at this draft report seems appropriate.

The Publisher’s Right

The rapporteur, MEP Comodini Cachia, explained in her report that it was important to address the challenges faced by press publishers “in enforcing the[ir] derivative rights […] in a manner that strengthens the position of press publishers, but does not disrupt other industries” [emphasis added]. Therefore, she has introduced an amendment replacing the Commission’s proposal with a legal presumption for publishers entitling them “to defend in their own name the rights of authors and seek remedies in respect of works published in their press publication and in respect of digital uses”.

This is an intriguing proposal, focusing on enforcement – one of the main issues used by the publishing industry to ask for a new exclusive intellectual property right. However, it needs to be looked at carefully, as it does not seem as if it would solve all issues raised by the ‘publisher’s right’. What impact, for instance, would this legal presumption have on the open access? What about journalists granting non-exclusive licenses for one article to two different publishers?

The ‘Value Gap’

#FixCopyright: The Value Gap Simply Explained

As we have previously explained, the Commission’s proposal undermines the e-Commerce Directive by (1) causing most hosting websites created after 2000 to become liable for every piece of content uploaded by their users (recital 38.2); (2) requiring hosting websites to conclude agreements with rightholders and (3) creating a general obligation for hosting websites to monitor content uploaded by their users (article 13).

In her report, MEP Comodini Cachia has thankfully deleted the provisions causing most hosting websites to be qualified of “active hosts” and therefore liable for every piece of content uploaded by their users. She also introduced a few interesting provisions, like an amendment requiring Member States to ensure that “national law provides users access to a court or other relevant authority for the purpose of asserting their right of use under an exception or limitation [to copyright]”.

However, the rapporteur’s proposal on article 13 – while not as outrageous as the Commission’s initial proposal – is still quite problematic.

According to the rapporteur, her amendment “complements the liability regimes already established in [the e-Commerce Directive] to the extent that Article 13 seeks to ensure the effective implementation of agreements concluded between online service providers and rightholders for the use of works”. This assertion should however be challenged.

The amendment states, for instance, that “information society service providers that are actively and directly involved in the making available to the public of user uploaded content […] shall take appropriate and proportionate measures to ensure the functioning of agreements concluded with rightholders for the use of their works”.

By focusing on “information society service providers” instead of “information society service providers that store […] large amount of works or other subject-matter” (as written in the Commission’s proposal), this amendment significantly broadens the scope of the initial proposal. This change would drag many more stakeholders into the fray, from apps to cloud computing services, caching services, ISPs, online music services, etc.

Furthermore, what does being “involved in the making available to the public of user uploaded content” mean? Whether platforms or users are actually “communicating to the public” is one of the main copyright debates currently taking place in the EU. Adding the criterion of “involvement” would only further muddy the waters by creating a form of “contributory liability” for everyone “involved” on the Internet. For example, would a cloud service provider or a search engine be “involved in the making available to the public” of content?

The rapporteur’s amendment grants stakeholders one protection: the requirement to take “appropriate and proportionate measures to ensure the functioning of agreements concluded with rightholders for the use of their works” does not apply to information society service providers whose activity is “of a mere technical, automatic and passive nature”. In the corresponding recital, the rapporteur extends that protection to information society service providers “eligible for the liability regime provided in Article 14 of [the e-Commerce Directive]”.

While this protection is of course welcome, its scope seems unfortunately too narrow. It might not actually include information society service providers covered by the liability regimes of articles 12 (mere conduit) and 13 (caching). Furthermore, it does not include the key element on intermediary liability put forward by the European Court of Justice in Google vs Louis Vuitton (C-236/08) and in L’Oréal vs eBay (C-324/09): the “actual knowledge” (or not) of an infringement by the intermediary to establish its liability.

To conclude, the JURI draft report is a first step in the right direction, but many issues still need to be settled. This only demonstrates once again how the European Commission’s proposal is detrimental to Internet users and to the digital economy.