Ancillary Copyright and Liability of Intermediaries in the EU Directive Proposal on Copyright

39 Pages Posted: 27 Dec 2018

Date Written: March 1, 2018

Abstract

The present study is focused on article 11 and article 13 of the Proposal for a Directive of the European Parliament and of the Council on copyright in the Digital Single Market.

The study underlines the inefficiency, from both a legal and economic perspective, of the measures held by the EU Commission, considering the purposes of these interventions:

• in the press sector, introducing a new right to facilitate online licensing for publications, investment recovery and respect for rights;

• as for online platforms, encouraging greater transparency on the revenues generated from the use of content protected by copyright in the digital environment, with measures aimed at establishing more balanced contractual relationships between, on the one side, authors and, on the other side, users and subjects who exploit the copyrighted works.

Article 11
The main purpose of article 11 is to require Member States to grant to press publishers the same rights as those set out in article 2 and Article 3, par. 2, of the InfoSoc directive, in case of digital use of their journalistic publications (so-called ancillary copyright). The duration of these rights is twenty years, allowing publishers to check the availability of their works to the public.

In other words, whenever a subject uses parts of a journalistic article (including the so- called snippets) he is expected to pay the above ancillary rights to publishers.

a) Poor effectiveness of the measure

There is no evidence that shows that the investments supported by publishers could be remunerated by the introduction of a new related right. Similar measures were already introduced in Germany, in 2013, and in Spain, in 2014, leading to the closure of news aggregation services (Google News, in Spain) or to the deindexation of copyrighted contents (determining the decrease of the web traffic on the related web pages). The Staff Working Document Impact Assessment also confirms that “None of these two recent ‘ancillary rights’ solutions at national level have proven effective to address publishers’ problems so far, in particular as they have not resulted in increased revenues for publishers from the major online service providers”.

b) Access and pluralism of information

The Commission’s proposal could have the effect of restricting access to certain contents, which would be de-indexed. Likewise, the introduction of a new related right might shrink the number of information aggregators, used not only by users, but also by researchers and journalists.

It should be also took into account that search engines could legitimately choose to take up exclusively the news from newspapers with which they have contractual relationships, with the detriment of other newspapers, negatively affecting information pluralism. An indirect, but also unfavourable, effect would also be seen in the activities of extraction and combination of large amounts of data and information (so-called big data journalism).

c) Excessive scope and circumvention of new rights

The duration of the rights (20 years) is excessive if compared to the commercial exploitation of journalistic publications, negatively affecting the use of these sources for historical purposes and scientific research.

Furthermore, these rights are due irrespective of a request by the rights holders. During the consultation, many journalistic companies have expressed their opposition to the introduction of an ancillary copyright. Likewise, the new rights would also apply to content issued with open licenses (such as, for instance, creative commons).

Finally, online news services could limit themselves to aggregating content created by operators established in third countries (for example, South Americans for news already

Lastly, online news services could aggregate exclusively content created by operators established in third countries (for example, South American operators for journalistic news relating to Spain), who are out of the material scope of the directive, with a clear competitive harm to European companies.

Article 13

According to the purposes of the EU Commission, the introduction of article 13 meets the need to fairly the value generated by sharing works by online platforms. According to the sources mentioned by the EU Commission, in fact, these platforms would generate revenues amounting to US$634 million (one dollar per user), compared to US$2 billion ($ 18 for each user) earned by the managers of the platforms themselves, through advertising investments or subscription fees.
In addition to the above mentioned license agreements, article 13 holds the adoption of effective content recognition technologies.

Even this measure seems disproportionate and ineffective and does not provide an adequate solution to the issues raised by the Commission.

a) Application of article 13

Article. 13 should apply to “Information society service providers that store and provide to the public access to large amounts of works or other subject-matter uploaded by their users”.

The reference to “large amounts of works or other subject-matter” is absolutely generic and does not specify the subjects to whom article 13 concretely would be applied. This causes a situation of great uncertainty, especially for new operators and innovative service providers.

b) Calculation of the value gap

The data reported by the Commission are contradicted by other independent researches. These researches show that, even if right holders complain about a “value gap”, there is a noticeable increase in revenues generated by the entertainment industry (music, film industry, etc.) and by copyright collecting societies.

c) Filtering and general surveillance

The measure that the Commission would introduce is clearly in contrast with both article15 of the e-commerce directive, which prohibits a general monitoring obligation on ISPs, and the recent decisions of the Court of Justice, which stated that the use of systems “for filtering and blocking electronic communications is inconsistent with EU law”, and namely with data protection law and freedom of enterprise.

On the contrary, the mechanism envisaged by the proposal directive calls for a preventive action of the platform operators, who are driven to monitor and remove potentially (but not necessarily) illegal contents uploaded by users, with a limitation of the freedom of expression.

d) Anti-competitive effects

Article 13 would apply exclusively to platform operators who make available to the public wide repertoires (or “large amounts of works”), with the exclusion of the other operators. The latest version of the proposal dismissed by the Commission provides for an exemption of liability for big players, provided that the conditions set by the article 13 are met. However, this exemption does not apply to the other operators, although they still an act of communication or making available to the public, even if distributing more limited repertoires.

This choice triggers a competitive distortion between big and small operators, since the big players could benefit from the exemption from liability, while the latters would not be covered by the protection held by article 13.

Ultimately, the above mentioned measures seem to be ineffective and do not comply with the needs expressed by the Commission and by the copyright holders. Therefore, a radical rethinking of article 11 and article 13 is necessary, taking into account the EU legislative framework and the impact that these measures might have on the reference markets.

Keywords: ancillary copyright, ISP liability, platforms liability, internet law, copyright, press law

Suggested Citation

Riccio, Giovanni Maria, Ancillary Copyright and Liability of Intermediaries in the EU Directive Proposal on Copyright (March 1, 2018). Available at SSRN: https://ssrn.com/abstract=3149363 or http://dx.doi.org/10.2139/ssrn.3149363

Giovanni Maria Riccio (Contact Author)

Università di Salerno ( email )

Via Giovanni Paolo II, 132
Fisciano, Salerno 84084
Italy

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