The Price of Closing the 'Value Gap': How the Music Industry Hacked EU Copyright Reform
36 Pages Posted: 1 Jul 2019 Last revised: 16 Apr 2020
Date Written: June 30, 2019
Sweeping changes are coming to copyright law in the European Union. Following four years of negotiations, the European Parliament in April 2019 approved the final text of the Digital Single Market (DSM) Directive. The new directive contains provisions for enhancing cross-border access to content available through digital subscription services, enabling new uses of copyrighted works for education and research, and, most controversially, “clarifying” the role of online services in the distribution of copyrighted works.
Article 17 of the DSM Directive is directed to the last of these goals. It was designed to address the so-called value gap — the music industry’s longstanding complaint that YouTube underpays music rights holders for streams of user-uploaded videos containing claimed copyrighted content. The text of the DSM Directive nowhere mentions YouTube, but anyone versed in the political economy of digital copyright knows that Article 17 was designed specifically to make YouTube pay. The important question in the wake of Article 17’s adoption is who else will pay — and in what ways.
This Article offers a focused examination of Article 17 as a public law created to settle a private score between the music industry and YouTube. Following an introduction in Part I, Part II explains and critiques the “value gap” as a policy rationale for altering the scope of copyright safe harbors. Part III breaks down the terms of the European Commission’s original proposal for Article 13 (which later became Article 17) in relation to existing provisions of the E-Commerce Directive and the Information Society Directive. Part IV surveys human rights-related and competition-related criticisms of the Commission’s proposal. Part V analyzes the adopted text of Article 17 with attention to the nature and adequacy of revisions made to answer the criticisms outlined in Part IV. Part VI provides a conclusion.
Keywords: copyright, intermediary liability, value gap, European Union, E-Commerce Directive, Digital Single Market Copyright Directive
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