The EU Parliament approves position on controversial copyright directive

The European Parliament has, on 12 September, voted in favour of the text of the new European Copyright Directive, which aims to bring  copyright law up to date for the internet era.

The Directive will be put to a final vote in January 2019, at which point it will need to be implemented by individual EU member states in their domestic law, but the Parliament has now made clear its position for going into negotiations with member states for a conclusive deal over its terms.

The new measures have proved highly controversial, and it is likely that they will significantly affect the power dynamic between the internet giants which host content online, and those who create it, such as the newspaper, music, film and television industries, as well as having implications for those industries themselves.

The legislative process has in fact seen the Parliament toughen up the areas of the new law which look to protect content creators.

Article 11 provides for a “link tax” which will compel online platforms to pay news organisations for the use of their content, and Article 13 provides that the onus will be on web giants to ensure that agreements with rights holders for the use of their work are working.

The Directive also significantly strengthens the position of authors and performers, providing for greater transparency relating to exploitation, revenues and remuneration, and also for a contract adjustment mechanism which would apply when remuneration under the original agreement is low compared to subsequent revenues.

Internet companies have lobbied furiously against the changes.

The internet giants’ objections focus on the cost of these measures, which will undoubtedly have an impact on their bottom line. Their spokesperson said: “It is a very big cost to take on board, and it is not a one-off – it is something that needs to be maintained.”

The EU’s perspective, however, is that freedom of expression will be protected by the wording of the new measures, and that the net result will be highly positive for creators and journalists providing new opportunities to earn revenue from their work.

The new law, particularly relating to transparency and contract adjustment, may introduce greater complexity into the commercial relationships between production companies and the creative individuals with whom they work.  However, the prospect of at least part of the vast revenues which internet companies generate from making others’ content available now being diverted back to those who made the content in the first place is likely to benefit the media and creative industries as a whole.

A key element of uncertainty is whether the United Kingdom will still be in the EU when the Directive finally becomes law and if not what arrangements will be in place with regard to IP rights.