Google, Facebook Gird for EU Rules to Vet Copyrighted Content

(Bloomberg) -- European lawmakers want to make it harder for Google, Facebook Inc. and other internet giants to showcase copyrighted material such as news articles and music videos online without permission.

New European Union rules, backed by European lawmakers in a vote Wednesday, could force web services to actively prevent copyrighted content from appearing on their platforms if rights holders don’t grant them a license. The legislation would also grant publishers new legal rights to seek compensation for snippets of articles that Google and other news aggregators post online.

“This is an exceptional day for European news media," said Wout van Wijk, Executive Director of News Media Europe, a publishers’ association. "We look forward to enjoying a copyright regime that is fit for the digital age."

When users upload content to social networks, video websites and other digital platforms, the companies running those services aren’t responsible for checking if the material violates copyright. The new rules would change that, and are part of a broader backlash against technology companies. As the world wakes up to the power and influence of major internet players like Google and Facebook, regulators and policymakers are beginning to question previously hands-off approaches to the sector.

In March, the EU issued new guidelines, giving internet companies an hour to wipe Islamic State videos and other terror content from their services. U.S. President Donald Trump signed a law in April making websites liable if they knowingly facilitate sex trafficking. And Europe’s tough new data privacy regulation kicked in last month.

The vote Wednesday by the European Parliament’s legal affairs committee will help set the institution’s position on the legislation -- ahead of final negotiations with the European Commission and EU member states -- before it becomes law.

The remaining members of European Parliament still need to formally sign off on the parliament’s position on the law, which has been the subject of fierce lobbying, pitting tech behemoths and internet activists against publishers, authors and artists.

"These measures would seriously undermine basic internet freedoms," said Julia Reda, a German member of the European Parliament opposed to parts of the copyright rules, after the vote. "We can still overturn this result and preserve the free internet."

Copyright holders for music, images and other content believe rules are needed to negotiate fair compensation for their work from web companies like Google and Facebook, who they say indirectly profit from displaying their content and running advertising.

"Those platforms are really monopolizing the market for access to cultural content on the internet," said Veronique Desbrosses, general manager for GESAC, a European umbrella association of author groups. Big tech companies aren’t paying creators fairly, she added.

Current EU rules protect platforms from legal responsibility for what appears on their websites until they are notified, such as when users flag terror propaganda. The companies are then required to take illegal content down.

For copyrighted works, services like Google’s YouTube already use technology that scans and identifies protected content that’s uploaded. Copyright owners can then either have the material taken down or choose to make money from it by running ads and sharing revenue with the user.

Google’s system, known as Content ID, has helped the company pay about 2 billion euros ($2.3 billion) to copyright holders in recent years, Marco Pancini, director of EU public policy at Google, said in remarks to the European Parliament Tuesday.

Under the new rules, Facebook and Alphabet Inc.’s Google would be required to prevent certain works from showing up on their platforms in the first place, should rights holders demand it. That will create legal headaches for the companies and likely require them to get licenses for the material.

"If we do the right things, we put in place our content ID systems and things like that, I don’t think you need to regulate," Richard Allan, vice president for policy solutions at Facebook, told European lawmakers this week.

Internet activists are concerned that the rules could restrict expression online. Sharing of memes could be caught up in the new rules because they’re often based on copyrighted images, they noted as an example.

The European Commission, the bloc’s executive body, first proposed the legislation in 2016. Member states in May backed the commission proposal with some amendments, including lowering the duration of the publishers’ legal rights to one year from 20. The parliament on Wednesday voted to give publishers the rights for five years.

--With assistance from Aoife White.

To contact the reporter on this story: Natalia Drozdiak in Brussels at ndrozdiak1@bloomberg.net

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Molly Schuetz, Alistair Barr

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