The flowchart below illustrates the main operative elements of Article 13. These include the definition of the affected services, the types of services that are explicitly excluded from its scope (the green box in the top right corner) and the reversal of the liability rules for the services covered by Article 13. It further details the obligations imposed on the services. These include an obligation to seek licenses for all copyrighted works uploaded by users (the yellow box) and the requirements to ensure the unavailability of certain works that will force platforms to implement upload filters (the two red boxes). The yellow box at the bottom contains the measures that platforms must take to ensure that the upload filters don’t negatively affect users’ rights.

The Scope: Broad yet vague

The problems with Article 13 start with the definition of the services it applies to. While Article 13 is intended to address concerns about value distribution raised by a limited set of industries (primarily the music industry) it applies to all types of copyright protected works. But there is no good reason why an article that is intended to bolster that bargaining power of the music industry should impose expensive obligations on platforms that have nothing to do with hosting musical works. In addition, the limitation to platforms that deal with “large amounts” of works is so vague that it does not provide any legal certainty for smaller platforms and will undoubtedly give raise to court challenges. On the positive side the definition clearly limits the scope to for-profit services.

An approach hostile to innovation

In addition to the general exclusion of non-profit services from the scope, a number of other services are excluded (the green box). Services that fall into these categories do not have to comply with the obligations established by Article 13 and will fall under the existing liability regime of the E-Commerce directive that absolves them of liability as long as they have a working notice and take down policy in place. This is good news for the platforms that fall within these categories (such as wikipedia or github) but will severely limit the emergence of new types of services in Europe since most new platforms are not covered by the list of exceptions.

For those services that fall within its scope, Article 13 specifies that they perform an act of communication to the public when they give the public “access to copyright protected works or other protected subject matter uploaded by its users”. This rather technical language in paragraph 1 of the article changes the existing legal situation in which the law assumes that it is the users of these platforms who are publishing the works by uploading them. Article 13 specifies that the platform operators are publishing the works uploaded by the users. As a result it is the responsibility of the platforms to make sure that they have the authorisation from rightsholders to publish all works that are uploaded by their users.

Impossible obligations

Since platform operators by definition cannot know which works users will upload to their platforms they will need to have licenses for all copyrighted works that can possibly be uploaded to their platforms. Given the fact that there are countless copyrighted works in existence and that the large majority of creators is not interested in licensing their works this is an impossible obligation (only a small class of professional creators is offering their works for licensing). This creates a situation in which the platforms who cannot rely on the liability limitation of the E-Commerce directive and who are unable to obtain licenses for all works uploaded by their users face a very substantial risk of being held liable for copyright infringement.

Filters as the only way to avoid liability

The fact that it will be impossible for platforms to obtain licenses for all the works that their users could possibly upload is acknowledged in the text of Article 13. It introduces the so called “mitigation measures” that have been at the center of the discussion about Article 13 since last summer. Mitigation measures refers to measures that platforms need to implement in order not to be held liable for uploads by their users for which they have not obtained authorisation. Article 13(4) lists a total of 4 different measures that platforms have to implement, two of which do not apply smaller platforms that are younger than three years:

1. All platforms have to make “best efforts” to license all copyrighted works uploaded by their users (the yellow box in the middle). We have already established that it is impossible to actually license all works, so a lot depends on how “best efforts” will be interpreted in practice. On paper this rather vague term is highly problematic since there is a virtually unlimited number of rights holders who could license their works to the platforms. It will be economically impossible for all but the biggest platforms to continue licenses with large numbers of rights holders. For all other platforms this provision will create substantial legal uncertainty (which will result in the need for lots of expensive legal advice which in turn will make it very difficult for smaller platforms to survive).
2. In addition, all platforms will have to make “best efforts to take down works upon notice from rightsholders”. This provision re-introduces the notice and take down obligation that platforms currently have under the E-Commerce Directive and as such it is nothing new.
3. On top of this all platform with more than 5 million monthly users will also need to implement a “notice and stay down” system (the top-most red box). This means that it will need to ensure that works that have been taken down after a notice from rightsholders cannot be re-uploaded to the platform. This requires platforms to implement filters that can recognise these works and filter them out. In terms of technology these filters will work the same as the more general upload filters introduced in the next step.
4. Finally all platforms that exist for more than 3 years or that have more than €10 million in yearly revenue will need to make “best efforts to ensure the unavailability of specific works for which the rightsholders have provided the service providers with the relevant and necessary information”. At scale this obligation can only be achieved by implementing upload filters that block the upload of the works identified by rightsholders.

Taken together this means that only a small number of platforms (those that are less than 3 years old and have less than €10 million in revenue) will be temporarily excepted from the obligation to implement upload filters. Regardless of how often proponents of Article 13 stress that the final text does not contain the word “filters” there cannot be any doubt that adopting Article 13 will force almost all platforms in the EU to implement such filters.

“Protecting” user rights by way of wishful thinking

From the perspective of users the most problematic element of upload filters is their inability to distinguish between infringing uses of a work and non-infringing uses of the same work. As a result they will block substantial numbers of uploads that would be covered under exceptions and limitations to copyright and thus substantially limit freedom of expression. Article 13 recognises this and tries to address the problem by introducing user rights safeguards (the yellow box at the bottom) that specify that the measures “shall not result in the prevention of the availability of works uploaded by users which do not infringe copyright and related rights, including where such works or subject matter are covered by an exception or limitation”.

Unfortunately these user rights safeguards are nothing more than wishful thinking. At scale, implementing measures that prevent the availability of specific works means installing upload filters, but such filters are not able to distinguish between infringing and non-infringing uses of a work. Article 13 sets platforms up for failure because it is impossible to meet the obligations they have under the mitigation measures and to safeguard user rights at the same time. Not making best efforts on the mitigation measures carries a very concrete risk (damages for copyright infringements). As there is no equivalent risk for failing to ensure that user rights are not protected it is this part of the dual obligation that platforms will give up first. The proponents of Article 13 may be right when they claim that the article requires platforms to protect user rights (“your memes are safe”) but what they fail to acknowledge is that at the implementation level this is an obligation that is impossible to comply with.

It’s not too late to remove Article 13

Almost 30 months of discussions have not resulted in a resolution of this internal contradiction of Article 13. The final text  is a terrible compromise that is disingenuous, user hostile and will result in significant legal uncertainty for the European internet economy. At the root of this problem is the idea that platforms should be forced license on more favourable terms by increasing their liability. As we have argued from the start, increasing the liability of platforms causes collateral damage, both among platforms have nothing to do with sharing music, and for the users of all platforms.

The final vote in the European Parliament at the end of this month offers one last chance to get rid of this legislative abomination. Removing Article 13 from the rest of the directive would allow some of the positive parts of the directive to go forward (and there is an increasing number of MEPs pledging to do this). If such an attempt fails, MEPs should reject the directive in its entirety.

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We believe that the Directive in its current form is a step back for the Digital Single Market rather than a step forward.

Most notably we regret that the Directive does not strike the right balance between the protection of right holders and the interests of EU citizens and companies. It therefore risks to hinder innovation rather than promote it and to have a negative impact the competitiveness of the European Digital Single Market.

Furthermore, we feel that the Directive lacks legal clarity, will lead to legal uncertainty for many stakeholders concerned and may encroach upon EU citizens’ rights.

These criticisms are very much in line with our own assessment of the directive and it is unfortunate that the rest of the Member States have chosen to ignore them. After this week’s approval by the Member States it is now up to the European Parliament to prevent the directive (or its most harmful element, Article 13) from being passed into law. There is no date for the final plenary vote yet, but the final showdown is widely expected to take place anytime between mid-March and mid-April.

Internet is should be for the people

In the light of this we have now updated our overall analysis of the directive (which we had first published in January) to reflect the final compromise text. The final trilogue negotiations have resulted in changes to the text related to the Text and Data mining exception, the publishers right, the fair remuneration right and — most notably — Article 13. By and large the changes to the text have been minor and in line with our expectations, and as a result our overall assessment of the directive as a whole remains negative. The finals text will do a lot of harm to internet users and needs to be blocked from becoming law.

Last minute surprise: Harmonisation of users’ rights

There is however one area where the trilogue negotiations have resulted in a last minute turn for the better. In a somewhat unexpected move the negotiators agreed on language in Article 13 that would make two of the existing (but currently optional) exceptions of the InfoSoc directive mandatory. If adopted paragraph 5 of Article 13 would require those member states who currently do not have the quotation and parody exceptions implemented to do so (at least with regards to uses that fall within the scope of Article 13).

The new language will do nothing to achieve its stated goal (namely ensure that users will be able to continue to share memes and other remixes via the platforms that fall under Article 13) but it will be another small step in the direction of a EU copyright system where users have the same rights in all member states. It is somewhat ironic that the harmonisation of existing exceptions that should have have been the main element of the reform package (there cannot be a Digital Single Market unless users have the same rights independent of the Member State they are in) has only slipped into the text at the very last minute and in the shadows of the controversy surrounding the upload filters. This is clearly an improvement of the legal situation of EU internet users and as a result we have changed our assessment of the right to remix issue from -2 to +1.

No amount of wishful thinking can ensure that upload filters respect user rights

Unfortunately this does nothing to improve Article 13. As we have argued again and again, the upload filters that platforms will be forced to implement under Article 13 are incapable of distinguishing between uses of a work that are infringing and those that are legal because they are covered by a copyright exception. Ensuring that these two exceptions are in place in all member states does not change the fact that the filters will not be able to recognise that a use is covered by them. Regardless of how often the legislator writes it into the text of the directive (at this moment both art 13(5) and 13(8) contain a requirement that the “measures” should not result in the blocking of works that are used under an exception) upload filters will severely limit users’ rights. Given this we have maintained our -3 score of the upload filters issue issue.

Our overall assessment remains unchanged: The proposed Directive is bad, and will not make the internet work for people. The final “compromise” text has done nothing to accommodate the concerns we and others have raised for the past 30 months. As long as Article 13 remains part of the package, the only sensible way forward it to make sure that Directive will be rejected by the European Parliament.

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To understand what has happened during the negotiations, it is illustrative to look at the differences between the final compromise and the text that had been agreed among the EU member states last week (which was the result of horse trading between the French and German governments).

A win for dominant platforms…

Yesterday’s compromise text is largely in line with the French-German deal. This includes a terrible version of Article 13 that will severely limit users ability to express themselves online. It will also further consolidate the power of dominant platforms, as smaller platforms will struggle with implementing expensive filtering technology and supporting the increased costs for dealing with increased liability.

It also introduces a EU-wide neighbouring right for press publishers that will have very similar effects. It benefits dominant platforms who can afford compliance while creating additional costs and risks for smaller players. As a result, users will likely end up with less access to information and the diversity of information available online will likely suffer. Under these conditions it remains to be seen if rightsholders will indeed manage to extract more value from the large intermediaries.    

…at the expense of users and creators

As if this would not be bad enough, the negotiators have introduced last minute changes to the text that further weaken provisions that were intended to protect the rights of users and individual creators. The French/German deal did not (at least not clearly) include a UGC exception for users of every online platform, but it used language that at least applied to  user-generated content uploaded to the platforms covered by Article 13. The final compromise has adopted questionable language that may or may not  provide a meaningful protection for users of platforms covered by Article 13, depending on whether Member States are obliged to fully implement the existing quotation and parody exceptions provided in the InfoSoc Directive, and make them applicable to user-generated content, which is not evident from the text.

Likewise the negotiators have gutted a key provision that was intended to ensure that individual authors and performers receive fair remuneration for online uses of their works. Instead of ensuring that they receive compensation for the exploitation of their works, proportionate to the revenues generated, the final language contains a loophole that allows the very practice of lump sum payments that this provision was intended to end.

Taken together these changes result in a directive that will mainly preserve the status quo and that has shed all noble intentions of strengthening the rights of users and creators and bringing more harmonisation into the fragmented EU copyright system. To the contrary, the directive introduces more complexity, privatizes enforcement and increases the legal risks for online operators in the EU. Instead of creating a EU copyright framework that works with the internet, the EU legislator has created a legislative monstrosity that works against the internet and will reinforce some of its most problematic aspects, such as the centralisation of services in the hands of a handful of US-owned platforms.

A final chance to stop the directive (so we can start anew)

We will provide more detailed analysis of the final compromise in the coming days once the official text is available. Before becoming EU law, the text still needs to pass a number of procedural steps. The first two of these, approval by the Member States and by the JURI committee of the European Parliament, are almost certain to happen.

It is the final vote of the whole European Parliament, which will take place in late March or early April, that creates an opportunity to stop this directive from becoming law. In order to achieve this MEPs need to be told loud and clear that yesterday’s deal is bad for users, bad for creators bad for the EU internet economy (you can do so via www.saveyourinternet.eu). Yesterday’s deal is so bad that the only sensible way forward is to vote it down and rethink from scratch what a modern EU copyright framework should look like.

The post After 30 months, EU legislators agree to sell out users and creators to big platforms and big content. appeared first on COMMUNIA Association.

While negotiators have been working on finding a final compromise this week, we have analysed the current text proposed by the presidency and created a flowchart of what’s in play. In its current version Article 13 now has nine operative provisions — now exceeding the number of articles the 2001 InfoSoc directive required to describe both the rights granted under copyright and the exceptions and limitations to those rights!

The primary change on Article 13 is that it strips all online platforms (with the exception of a narrow set of non commercial services) of the liability limitations they hold under the E-Commerce Directive. Under the recent Romanian proposal Article 13 platforms are considered to undertake an act of communication to the public when users make available works on these platforms. This means that platforms need to either obtain licenses for those works or they can be held liable for unauthorized used of all works uploaded by their users.

Given that there are millions of people who on a daily basis share photos, videos, songs, drawings and text online via online platforms, it is impossible to obtain licenses from all rights holders for all these works. This means that platforms will be forced to limit their liability — and this is where upload filters enter the picture. To avoid liability, section 4(a) of Article 13 (the red box in the flowchart) requires platforms to ensure the unavailability of all works identified by rightsholders (i.e. by filtering them out), and to make best efforts to prevent future uploads of works for which rights holders have requested a take down.

While there are a number of provisions that would require platforms to allow uses under exceptions and limitations, these largely amount to legislative wishful thinking. As we and many others have argued repeatedly, upload filters are incapable of distinguishing between infringements of copyright and legitimate uses made under limitations and exceptions. Therefore, platforms will be faced with potentially unlimited liability, and they’ll clearly be incentivized to err on the side of caution and filter everything that is even remotely questionable from a legal standpoint.

In its current form Article 13 exposes all platforms that allow users to upload content to a a level of liability that does not leave them any other option than to limit how users can express themselves online.  

User Generated Content exception

Throughout the legislative process, we have been advocating that Europe needs a new exception that gives users of online platforms the right to remix. In January, Germany proposed a mandatory user generated content (UGC) exception, which seemed like an effort to make a positive contribution to the shape of the Directive. Yet, as we argued earlier, the exception was subject to remuneration, which made it unworkable.  

Following these efforts, the Romanian presidency then proposed language that would protect user generated content in the context of Article 13. The language was flawed, because it did not cover short works and entire images, and it was not applicable to content made available by users other than the individual creating the materials. In sum, it did not really serve the interests of users.

We were still hoping that the final compromise would include a better version of a UGC exception. However, the Romanian presidency ended up not creating (at least not clearly) a mandatory UGC exception applicable to users of every online platform. It kept a formulation similar to the one previously proposed, which does not seem applicable to content uploaded by users to any online platform, but only to platforms covered by Article 13. The language was improved and it now states:

“Users shall be allowed to upload and make available content that they have generated by themselves or by other users and which includes parts of, existing protected works and subject matter for purposes of quotation, criticism, review, caricature, parody or pastiche.”

While content may be uploaded by users other than the original creator, the exception covers usage of only parts of existing protected works, making it impossible for users to share user-generated content containing an entire artwork (e.. a meme using a painting in its entirety), or an entire short work (e.g. a meme using a poem in its entirety). In addition, the purpose must fit within a narrower definition, which does not include for example “illustration”. We recall that the previous language, namely the UGC exception proposed by the German delegation, had an open-ended list of purposes, which would give some flexibility to cover other reasonable uses.

Eleonora Rosati at IPKat argues that this might mean a big improvement to the exceptions framework because it would essentially be making these exceptions mandatory for Member States. While this indeed would be a positive outcome, we still believe that there is sufficient rationale to introduce a proper UGC exception clearly applicable to all uses in all online platforms.

Small and Medium Enterprise exception

Since the September vote, attempts to limiting of the scope of Article 13 have been one of the few options remaining to improve the Directive. We’ve argued previously that the scope of the article should be as narrow as possible. We know by now that there is no chance for such narrow focus, but the issue of small and medium enterprises has remained a significant one to follow.

The Romanian presidency proposes a “softer liability regime” (based solely on notice-and-takedown obligations) that covers companies with:

• a yearly turnover of less than EUR 10 million, and
• whose services have been available to the public in the EU for less than 3 years, and
• whose average number of monthly unique visitors does not exceed 5 million.

Among these, the second condition is crucial, as it limits in any case the applicability of a weaker regime to only three years. After that period of operation, any online platform operating in Europe, big or small, will be subject to Article 13 provisions, and that essentially means filtering. Overall, we find this limitation of scope to be insufficient.

Today’s trilogue appears to be the last real opportunity for negotiators to make meaningful changes to the direction of Article 13 so that it protects the rights of users online. As highlighted above, there are still many needed alterations, such as a broader approach to UGC, and a more expansive SME exception. But even if lightning strikes and these positive changes were adopted, perhaps by now all is lost with Article 13. It’s becoming more clear every day that this provision was never anything more than a vain attempt to minimize the impact of the fundamental changes brought about by digital technologies and the internet on legacy business models.

There’s a good possibility that by the end of the week we’ll receive a final directive text with the worst version of Article 13 — suggesting massive negative repercussions for the liability of online platforms that will force those sites to install expensive and harmful upload filters. We’re quickly approaching a pivotal decision point with regard to the directive as a whole. The question just around the corner is: will millions of Europeans now be forced to call upon their Members of Parliament to stand and say “enough is enough” — and send this flawed copyright reform back to the drawing board once and for all.

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In part these last minute statements are tactical interventions intended to maximise pressure on the negotiators to adopt rightsholders friendly positions, but they also point to a much more fundamental problem: Copyright is simply not suitable as a tool to support the specific business models of one part of the creative sector without causing massive problems in other sectors. In an environment where pretty much every online transaction somehow triggers copyright, messing with the contours of copyright (especially when it comes to liability for infringement) will have lots of unintended consequences that manifest themselves as collateral damage in other sectors of the digital economy.

Together with large numbers of leading academics we have pointed out from the beginning that Article 13 will be damaging for users’ freedom of expression . We have also argued that Article 13 will consolidate the market power of the dominant platforms while causing collateral damage among platforms that have nothing to do with the sharing of music . These concerns are relatively easy to counter by rightsholders and other proponents because they fit into the classical understanding of copyright as zero-sum game between rightsholders, on the one side, and platforms and users, on the other side. From the very beginning, the declared intention behind Article 13 of the proposed directive was to strengthen the position of rightsholders by weakening the position of intermediaries and users. For many policy makers this seemed to be a perfectly reasonable tradeoff to make, in order to please the music industry.

Clashing business models

Over the past few months, as discussions about Article 13 have intensified, it has become clearer that this is a rather limited understanding of how changes in copyright affect different sectors of the creative industry. Increasing the liability for intermediaries creates risks not only for the big platforms that were the target of Article 13 but also for countless other types of businesses. This has lead to hectic ( but fundamentally flawed ) efforts to exclude certain types of services from the scope of Article 13. More importantly it has also resulted in a Council position that includes “mitigation measures” that try to limit the negative effects of increased liability for platforms. Based on these “mitigation measures” platforms would not be liable as long as they cooperate with rightsholders.

Such cooperation is relatively unproblematic for the original backers of Article 13 from the music industry. Their core business models consists of issuing licenses to as many intermediaries as possible. However, for those types of rightsholders whose business models are based on selectively licensing to the highest bidder (most of the audiovisual industry), a requirement to proactively identify works that platforms need to block is actually a step backwards from the current situation. In other words, an Article 13 designed to boost the business model of one class of rightsholders would undermine the business model of another class of rightsholders. As this tradeoff has become more and more evident over the last few months, voices from the AV sector questioning the wisdom of Article 13 have started to emerge, culminating in the multitude of statements in the last 24 hours.

With rightsholders rolling over the floor fighting, the chances are increasing that the copyright directive will hit the wall for good. This would be a huge not only for the online platforms but more importantly for internet users and, as such, the last minute disintegration of rightsholder-coalition must be applauded. But it also means that copyright has been hijacked by the legacy entertainment industry in an ill-conceived attempt to re-establish their control over the distribution of cultural goods . In the increasingly likely scenario that Article 13 will fall, this will almost certainly mean that the rest of the directive will go down with it as well. This will mean that much needed improvements for cultural heritage institutions, the access to public domain works, and the strengthening of the position of individual creators will not happen for the foreseeable future. It will also mean that the European Union has been unable to adopt its copyright rules to the challenges posed by the digital environment for close to 20 years, which would amount to a declaration of legislative bankruptcy in one of the key areas of digital policy making.

A better alternative: Compulsory collective licensing

Such an outcome would be even more deplorable as the whole drama around Article 13 could have easily been avoided. Instead of falling for the music industry’s fever-dream that by changing the liability system for online intermediaries they could wrest control over the internet from the dominant platforms, the European Commission should have relied on a time-tested tactic from the copyright tool box. Historically, the tool of choice to address free-riding on the creative output of cultural producers by new classes of intermediaries has been collective licensing. It would have been a relatively simple (and largely uncontroversial) intervention to introduce a licensing obligation on platforms providing access to copyrighted works and to couple that with an obligation on rightsholders to collectively license the use of their works in musical platforms. Such a measure would have been second best from the perspective of both rightsholders (who prefer to have the ability to withhold licenses) and platforms (who are incentivised to avoid licenses whenever possible) but as proven again and again in the past it would have worked. And more importantly it would have allowed the EU policy makers to spend their time on adjusting copyright policy to ensure that it does not unnecessarily deprive the public of access to knowledge and culture.

Technically it is still not too late for the legislators to delete Article 13 (and Article 11) from the proposed directive and to move ahead with the rest of it. While unlikely to happen, such a move would go a long way toward preserving the ability of policy makers to constructively shape the EU copyright system. But in the absence of such a move, all that is left for us to do is wondering what that special place in hell looks like, for those who promoted Article13, without even a hint of concern for the collateral damage it would cause.

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The Romanian proposal attempts to save the sharing culture, but fails spectacularly

Ahead of the Council Copyright Attachés meeting that took place yesterday, the Romanian Council Presidency proposed a possible compromise solution on article 13 that 1) exempts platforms from liability in certain situations (e.g. if they made best efforts to obtain an authorization from the rightsholders) and 2) introduces a mandatory EU-wide user-generated content exception to copyright, which allows users to upload and make available content generated by themselves, but not by others. The Romanian compromise further suggests to continue to discuss if online platforms that are microenterprises and small-sized enterprises shall be exempted or not from the obligations imposed by article 13.

The fact that the compromise solution presented by the Romanian Presidency contains the introduction of a UGC exception shows the intention to make a positive contribution to the negotiations. However, the drafting is far from bringing a meaningful solution for users. To start, the proposed exception only allows the use of parts of works, making it impossible for users to share user-generated content containing an entire artwork (e.g. a meme using a painting in its entirety) or an entire short work (e.g. a meme using a poem in its entirety). Then, it only allows users to share content generated by themselves, and not by others! What is the point of sharing a meme on an online platform, if other users cannot interact with it, by sharing it too?

Last week, the German delegation proposed a remunerated UGC exception (basically, paying for sharing a meme) and left us wondering if the lawmakers understood the rationale (freedom of expression and freedom of creation) behind a UGC exception and the value of platforms to users. The UGC exception now presented by the Romanian Presidency as a possible compromise solution only reinforces our concerns about the ability of lawmakers to foresee all the consequences of their proposals.

Again, there were good UGC exceptions on the table, such as the ones proposed by CULT and IMCO and also by individual MEPs. There’s no need for lawmakers to keep reinventing the wheel, if they really want to take a step in the right direction and adopt a mandatory EU-wide exception that will – provided that no upload filters are in place – facilitate everyday sharing practices that are for purposes such as criticism, review, caricature, parody, etc.

Audiovisual sector calls lawmakers to halt the negotiations

Meanwhile, the direction in which the negotiations on article 13 are going continues to swell the ranks of its critics. Several organisations representing rightsholders from the audiovisual and publishing sectors are “extremely and increasingly concerned” and, thus, have called for the suspension of the negotiations with respect article 13. According to these organizations, the Commission should wait for a decision of the Court of Justice of the European Union in case C-682/18 concerning Youtube’s liability for copyright-infringing content uploaded by its users, and only then decide whether legislative intervention is necessary.

We are still far from having article 13 either deleted or turned into something acceptable but there are more and more signs that support for article 13 in its current form is eroding:

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From our perspective the most positive development is the fact that based on an amendment proposed by the European Parliament, the negotiators have provisionally agreed to include a Public Domain clause in Article 5 of the Directive. This clause intended to ensure that reproductions of works in the public domain can no longer be protected by copyright or neighbouring rights (as it is currently the case in a number of EU member states such as Germany and Spain). This is not only welcome because it would solve a real problem or because it would turn one of the recommendations of our Public Domain Manifesto into law, but also because it will be the first ever mention of Public Domain in EU copyright framework!

Good news for cultural heritage institutions

Another important improvement can be found in the provisions of the directive aimed at improving access to Out Of Commerce Works (OOCW) in Articles 7-9. Here the negotiators have provisionally agreed on changes that will make these provisions much stronger and much easier to use for cultural heritage institutions. As in the original Commission proposal the mechanism for allowing cultural heritage institutions to make available Out Of Commerce Works from their collections will be Extended Collective Licensing (ECL). However, in the provisionally agreed text the negotiators have followed the European Parliament’s proposals to add a fallback exception that allows cultural heritage institutions to make OOCWs available online in situations where they cannot obtain such licenses because no representative collective management organisation exists. This combination of ECL with a fallback exception would finally provide a comprehensive solution for the copyright problems faced by cultural heritage institutions that are digitising their collections.

Finally the negotiators have dropped a highly problematic proposal by the European Parliament which would have outlawed the combination of exceptions. As recently highlighted by our friends at LIBER this measure would have been highly detrimental for many types of research. It would have also undermined a long standing principle of the EU copyright framework that allows the combination of exceptions as long as the resulting uses comply with the three step test. We are happy to see that this needless and toxic addition will not find its way into a final text of the directive.

On balance still a potential disaster

At this moment all of these improvements have been “provisionally agreed” upon, which reflects the principle that “nothing is agreed until everything is agreed”. When the negotiators meet again in January they still have to find agreement on Articles 13 and 11 and a number of other parts of the directive. The language that is in the table for these articles continues to be highly problematic (see our most recent analysis for Article 13 here and for Article 11 here) and unless there will be mayor improvements on these articles as well, the overall directive is still very likely to do much more harm than good.

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But here we are now years later in the thick of the trilogue negotiations, and the EU legislator is finally trying to figure out what to do about Article 11. Similar to Article 13 and content filter, we expect that the final compromise text of the directive will include some version of the press publishers right.

The waivable press publishers right

Our long-held view remains: Article 11 should be removed from the copyright directive. The provision is patently harmful to journalism, access to information, and the digital single market. The option to make the press publishers right waivable is simply one way to slightly improve the press publishers right if deletion is impossible. If the negotiators can’t be convinced by the mountains of research, empirical evidence observed in prior trials, and near universal public opposition to this unnecessary right, then the legislator must do everything it can to mitigate the negative effects that would be faced by news publishers and news seekers in the EU.

One of the worst aspects of Article 11 is that it applies whether publishers want it or not. As written by Creative Commons recently, the press publishers right “would undermine the intention of authors who wish to share without additional strings attached, such as creators who want to share works under open licenses […] forcing publishers who use CC to accept additional unwaivable rights to receive payment violates the letter and spirit of Creative Commons licensing and denies publishers the freedom to conduct business and share content as they wish.”

The new press publishers right and commons

CC wrote that if including some version of Article 11 is unavoidable, it should include protections for works under open licenses, or in the public domain. For instance, the Council text included a provision that said, “When a work or other subject-matter is incorporated in a press publication on the basis of a non-exclusive licence, the rights […] may not be invoked to prohibit the use by other authorised users [or] works or other subject-matter whose protection has expired.”

The concerns of publishers

Small and medium-sized publisher are worried about the effects the unwaivable press publishers right will have on their operations too. In October the European Innovative Media Publishers sent a letter to the trilogue negotiators outlining how they will be harmed if Article 11 is adopted. They’ve also launched a petition that calls for the deletion of Article 11, or at least the introduction of mechanisms that would “reduce some of the collateral damage to small and medium-sized publishers.” The signatories believe that having their press publications incorporated into news aggregators and other online search tools obviously helps drive traffic to their content, without the need for requiring other payments from aggregators or news agencies. From their petition:

The introduction of a neighbouring right in Germany and Spain make it harder for us to grow online, reach new audiences and develop new markets. They create new barriers for entry for publishers to develop online. In Spain, we are even deprived of control over our own content, and obliged to charge via a collecting society, whether we like it or not. […]

We adamantly believe that any publisher’s right must give publishers the choice to consent to the sharing of their content online. Aggregators, search engines and other online services drive valuable traffic to publishers’ websites, particularly smaller or local ones; and this traffic referral creates huge opportunities to generate revenue through advertising.

Thus, one way to reduce the collateral damage of Article 11 is to make the press publishers right waivable. Even Google, which has basically threatened to shutter Google News throughout Europe if Article 11 passes, is now advocating for the ability of publishers to waive the press publishers right should it make its way into the compromise version of the directive. Google says, “the copyright directive should give all publishers the right to control their own business models and destiny by giving them the choice to waive the need for a commercial license for their content.”

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In general, any direction on this piece of regulation seems to be lost, with actors participating in the trialogue willing to treat the article like a puzzle, in which puzzles can be rearranged in any way possible – beyond the scope of any previously negotiated and legitimized mandate. The process once again proves to be obscure and lacking with regard to basic rules of participatory policymaking.

The Commission was given several guidelines. These include an assumption that platforms do communicate to the public and need to obtain licenses or that automatic blocking should be “avoided as much as possible”, but is also not forbidden.

Earlier this week, we published four principles, based on which we plan to evaluate the proposed language for article 13. We believe that any version of Article 13 that does not take these four principles into account will need to be rejected in the final vote taken by the European Parliament.

We decided to check the Commission’s proposal, included in the non-paper against our principles. This has been made difficult by the fact that what is proposed in the non-paper is in many ways vague. Once it becomes more substantial, we will be able to make a definitive judgement. But even now, lack of details on some issues – such as protection of content fitting copyright exceptions from overfiltering – is telling.

1. The Scope of application must be as narrow as possible

The Commission proposes a gradual approach that differentiates platforms. The non-paper states that availability of non-licensed, copyright protected content should be achieved through cooperation between platforms and relevant rightsholders. Such cooperation should take into account size of the service, number of uploaded works, potential economic cost, availability of effective and suitable technologies and their cost for service providers.

This is nothing new – such a gradual approach has been present in most versions of article 13. The proposal lacks a stronger limitation, which could be introduced by a reduction of scope – in particular the narrow application that we present in our 1st principle. – The 1st principle is not met. (also note the well known language on “effective and sustainable technologies”,  which would again opens the doorway to content filtering by at least some OCSSPs).

2. Do not introduce general liability exposure

This principle is almost met by the Commission’s proposal, which states that platforms “would in general not be liable if they have cooperated in good faith”. Yet the option of general liability is considered in cases, when the sharing of content has caused significant economic harm. – The 2nd principle is not met.

3. Any content filtering and removal must respect user rights

Lip service to this rule is made by the Commission by stating that “Content that does not infringe copyright, for example because it is covered by exceptions, should stay on the services’ websites”. We are not satisfied by such a statement, which lacks any detail about measures that will encourage – or force – platforms and rightsholders cooperating on removal of infringing content to seriously treat exceptions. “Robust redress mechanism”, which gives users ability to contest measures are not enough. We believe that meaningful damages for unjustified content removal or blocking are necessary. The 3rd principle is not met.

4. Measures must be transparent and accountable

The Commission does not propose any measures that provide transparency or accountability. To the contrary the commission’s proposal introduces arbitrary categories like “high” and “low” value content that would make any blocking or removal even less transparent to users and creators. – The 4th principle is not met.

So our overall judgement is clear – the Commission’s proposal does not meet the four criteria that we have defined.

Towards a User Generated Content Exception?

There is one additional issue worth pointing out, which related to something that we have been calling for since the beginning of the reform process. The need for a User Generated Content exception.

The non-paper states that the “minor uses of content by amateur uploaders should not be automatically blocked”.  This is a curious statement for a document that purportedly does not recommend automatic filtering (why then propose an exception to automatic filtering?). Even more interestingly though this could be read as an indirect acknowledgement of the need for a UGC exception. If the Commission really wanted to give “amateurs” that make “minor uses of content” legal security, then it should support the proposal to introduce an UGC exception. Such an exception, when properly enforced, would give users a much stronger protection than what the Commission now proposes.

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Given that all three legislators bring similar versions of article 13 to the table, we can expect that a final compromise text will include some version of the article 13 upload filters. There is still a good chance that the negotiations will be inconclusive or that the eventual outcome of the trilogue negotiations will not be approved by either the Member States or the Parliament (which would mean that the directive will fail and there will be no upload filtering requirement for the foreseeable future). But in the context of the ongoing trilogue, the deletion of article 13 (which has been our position so far) is not an option anymore.

This raises the question of how the damage that article 13 will do to the internet ecosystem and freedom of expression can best be contained. Before we do so let’s take a quick look at the positions that are on the table:

EP position: general blocking of all unlicensed content

The provision adopted by the European parliament can only be described as a total disaster. As the result of a misguided attempt to remove the mention of “measures” from the text of the article the European Parliament adopted a version of article 13 that makes platforms liable for copyright infringements for every single work uploaded by their users. This would include any photo, drawing or text uploaded by a user, regardless if these are old works, works that have been created for the express purpose of being shared widely, or the latest blockbuster movie. As a result of making platforms liable for all works uploaded by their users, they are practically forced to install filters that will block everything that has not been licensed to them. In other words, the EP version of article 13 would turn open platforms into platforms that distribute content licensed by the entertainment industry and nothing else.

This idea is so dangerous that even MEP Cavada, who is no friend of the platforms or their users, has criticised it during the negotiations in the European Parliament that it…

.. aligns the liability regime of platforms on the one of traditional broadcaster and therefore imposes an absolute liability in terms of copyright, which is a non-sense. This situation would lead to a general blocking, and by default, of all copyright protected content not covered by a licence, even without a request from rightholders.

Yet this is the position that the European Parliament brings to the trilogue table. On the positive side (which in no way balances out the fundamental flaw of unlimited liability) the EP position contains relatively strong safeguards for users whose uploads are wrongfully filtered and has stronger carve outs for services that are excluded from the filtering requirement.

Council position: Implement upload filters or be liable

The position of the Member States makes much more sense, at least technically (unless we assume that it really is the intention of the EP to turn internet platforms into pseudo broadcasters, in which case the EP proposal also makes sense). The council text also makes platforms liable for uploads of their users, but gives the platforms a chance to limit this liability by implementing upload filters. These filters would need to block (and subsequently suppress) all unlicensed materials identified by their rightsholders. If platforms can demonstrate that they have “effective and proportionate” filters in place that “prevent the availability of the specific works identified by rightholders” and that they act “expeditiously to remove or disable access” to infringing works upon notification platforms would not be held liable for infringements of works that have been uploaded without authorisation. In other words, the Council text requires platforms to filter works that are in the catalogues of rightsholders, but allows them to leave other works online unless they are notified of infringements.

This much more targeted approach is still hugely problematic. As we have pointed out previously, filtering technology is simply incapable of recognising whether a work is legally used on the basis of an exception to copyright. While the Council text requires that the filters are “implemented by the online content sharing service provider without prejudice to the possibility for their users to benefit from exceptions or limitations to copyright” this remains wishful thinking given the current state of technology. Faced with liability platforms will almost certainly opt to err on the side of overfiltering, which will result in structural limitation of users freedom of (creative) expression.

Our position: Upload filters remain a terrible idea (but these four principles would avoid the worst effects)

As the negotiators try to find a compromise between the positions of the Parliament and the Council here are four principles for limiting the worst damage that upload filters would do to the online ecosystem and the rights of internet users in the EU. All four can be implemented without changing the overall structure of the various versions of Article 13 currently on the table.

1. The Scope of application must be as narrow as possible

We have argued again and again that given the intention to provide more leverage for rightsholders vis-a-vis the big commercial media platforms the legislator should make sure that article 13 only affects them and not every single platform that allows user uploads. To achieve this the definition of the services affected (the so called “OCSSPs”) must be as narrow as possible. Currently both the EP and the Council text contain an open ended definition combined with a limited list of exceptions. This approach is overly broad and innovation hostile (services that don’t yet exist cannot, by definition, be included in the list of excluded services). The legislator should limit the application of article 13 to “for-profit audio visual platforms that compete with licensed audio or visual services”.

2. Do not introduce general liability exposure

As we have outlined above the European parliament’s version would make platforms liable for all works that are uploaded by their users. This would include works that cannot be licensed by the platforms (for example because they are out of commerce or because they are not considered to be works by their creators or because the creators simply cannot be bothered to license them). From the perspective of platforms, risking to be held liable for infringements is too risky and this will mean that platforms will be forced to block all copyrighted works uploaded by their users for which they do not have a license. This outcome benefits no-one and would severely limit the freedom of creative expression of millions of European internet users. To prevent this the liability of platforms must be limited to those works that they can actually license (as it is the case in the Council text).

3. Any content filtering and removal must respect user rights

The biggest problem with a requirement to implement upload filters is that these filters are only capable of identifying works. Filters are simply not capable of determining if a particular use of a work is infringing or if it is allowed under  exception or limitation to copyright. Yet both the Council and the Parliament make it clear that any measures implemented need to respect the rights users have under exceptions and limitation. Given the current state of technology this simply amounts to wishful thinking. Both Council and Parliament include redress mechanisms that would allow users to challenge unjustified blocking or removal of their uploads. Given that overfiltering will happen by design it is not acceptable to put the burden to rectify this on users who can only act after the their rights have been violated. To ensure that measures respect user rights platforms and rightsholders must both face meaningful damages for unjustified content removal or blocking. Neither the Council nor the EP version currently meet this condition. Given the current state of technology that would mean that they cannot rely on automated blocking or removal and will need to ensure that platforms are fully licensed.

4. Measures must be transparent and accountable

The way that article 13 is structured means that copyright enforcement and the safeguarding of fundamental user rights are left to private entities (rightsholders and the online platforms). Privatizing enforcement and rule setting in the hands of for profit entities undermines the idea of an open and democratic digital media space. To ensure that the measures are not abused by rightsholders and platforms, users and creators must have full transparency regarding any blocking or removal of content by platforms. In the interest of full transparency all measures should be based on publicly accessible repertoire information that is available to all platform operators. This ensures that rightsholders can be held accountable for unjustified blocking or removal as a result of faulty repertoire claims and that all platforms have access to the same repertoire information. Neither the Parliament nor the Council text currently include language that would ensure a sufficient level of transparency for all parties involved.

Unless these four principles are taken into account any version of Article 13 will need to be rejected when it comes back for a final vote to the European Parliament.

A final chance to minimise unnecessary harm

During tonight’s trilogue negotiations lawmakers should take these four principles into account. Instead of insisting on the flawed texts that they brought to the table, they should attempt to achieve a text that causes minimal harm, to users, creators and the internet ecosystem as a whole. To achieve this they need to make sure that any obligations under article 13 only affect the services they are intended to affect and only concern works from rightsholders who actually intend to license their works to the platforms. Lawmakers also need to make sure that measures implemented fully respect user rights and are fully transparent. Anything falling short of this would result in a legislative measure that will both fail to achieve its objective and will cause substantial collateral damage for the internet ecosystem in the EU. It will further underline the point that the EU copyright framework is about protecting legacy business models of a few at the expense of freedom of expression and innovation.

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