How Europe Is Rewriting the Rules for Digital Media

(Bloomberg) -- If you like watching videos on YouTube or reading news posted on Facebook -- and you happen to live in Europe -- your online experience is in for some changes starting this year. The European Union agreed on Feb. 13 to overhaul its copyright rules for the internet age to ensure fair compensation for artists and publishers. While content creators welcome the effort as overdue and well-intentioned, the law has sparked controversy and could unleash a host of unintended consequences.

1. Why is Europe looking at copyrights?

The EU is modernizing its copyright rules, some of which date back to 2001 -- before social media or streaming media really took off. The rise of the internet has opened up new audiences to publishers and content creators, but they’ve had difficulty negotiating favorable terms of use for their material with web giants like Alphabet Inc.’s Google. The concern is that companies like Google have profited from displaying content belonging to others -- such as on YouTube -- without paying for the use of the material. The new EU rules are meant to help copyright owners obtain remuneration for their content.

2. Why has the law raised concerns?

The new European Copyright Directive aims to create more opportunities to use copyrighted material for purposes of education, research and cultural heritage. But there are two provisions of the law that provoked intense lobbying on all sides. The first is Article 11, which grants publishers legal rights to squeeze money from news aggregators and other platforms for displaying small fragments of text on their sites. The other is Article 13, which would require platforms such as YouTube and Vivendi SA’s Dailymotion to do everything in their power to prevent copyrighted content, like songs or video clips, from appearing on their sites if rights holders don’t grant them a license.

3. What’s the issue with news sites?

Free-speech activists say that rules similar to Article 11 introduced in Germany and Spain in 2013 and 2014, respectively, failed to lift the fortunes of publishers and may have limited the choice of digital media available to the public. Google News pulled out of Spain entirely rather than pay for content. In Germany, Google still hasn’t paid any money to publishers based on the law and has been locked in a legal battle with them since 2014. Under the new EU rules, publishers -- who often get significant internet traffic from search and social -- are allowed to waive their rights and let platforms use part of their content for free.

4. What about the uploading provision?

The point of Article 13 is to get illegally-uploaded music and videos off the web and create the conditions for copyright owners to be compensated. Web platforms like YouTube will have to negotiate licenses for songs or video clips before publishing user uploads of content that incorporates them. They will have to make "best efforts" to obtain authorization from rightsholders if licenses aren’t already concluded, likely forcing tech firms to seek out all artists and music producers of content users could potentially upload. Platforms would also likely have to screen uploads for unauthorized material flagged by rightsholders in advance, thrusting web firms into the role of content police or even censors.

5. Who supports the EU’s plans?

Large publishers like Axel Springer SE and Hubert Burda Media KG say they need Article 11’s protections to end free-riding on their content, which has allowed tech giants to make billions in advertising indirectly supported by their material. Music companies and movie studios have been pushing for Article 13. So has GESAC, a European umbrella association of authors and composers, which says the new rules will allow creators to be remunerated fairly by online platforms. However, some in the creative industries have expressed concerns that platforms could try to exploit loopholes to get around paying for content.

6. Who is opposed?

Some tech companies and small publishers have fought against the plans. Google has even threatened to pull Google News entirely from Europe, depending on the final version of the text. In the run-up to the agreement, the search giant blanketed Twitter and YouTube with ads urging viewers to fight the rules. Open-internet activists have also sounded the alarm. The Pirate Party’s Julia Reda, a German member of the European Parliament, has been particularly outspoken, warning that upload filters that platforms will implement in response to the copyright directive could lead to censorship. The issue has made waves outside Brussels: an online petition objecting to Article 13 has already gathered 4.7 million signatures.

7. Where’s this fight going?

The European Commission, the EU’s executive branch, proposed the rules in 2016 and
agreed to the final version of the text with the European Parliament and the bloc’s member states on Feb. 13. The rules still need to be rubber-stamped by the full European Parliament and the 28 EU member states before they enter into force. That final step is typically seen as a formality, but lawmakers opposed to the deal have already said they would try to block it in the conclusive vote.

8. Why did Europe take on this fight?

The EU has been out front on a range of knotty issues concerning the intersection of technology and society -- from aggressive antitrust cases to its landmark online privacy rules introduced last year. The copyright rules are part of a broader shift by the EU to force tech firms to shoulder more responsibility for what appears on their sites. Previous law protected web platforms from liability as way to help them grow in the early days of the internet. But now Brussels is rolling back those exemptions in certain areas, for instance, preparing rules that would fine companies if they fail to remove terrorism-related content quickly enough. Social networks are also taking their own initiative in some cases: Instagram recently said it would ban graphic images of self-harm following a campaign by the parents of a British teenager who committed suicide in 2017 after viewing such material on the photo-sharing platform.

The Reference Shelf

• A Bloomberg Opinion column by Leonid Bershidsky on why tech giants are stronger than Paul McCartney
• A blog post by Google General Counsel Kent Walker on copyright
• Publishers’ website explaining their position in favor of the legislation and web site of IMPALA, the Independent Music Companies Association
• Pirate Party MEP Julia Reda on the copyright agreement
• A Bloomberg Opinion editorial asking whether Europe is trying to kill the digital ad business.

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, Andy Reinhardt

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