Update March 28, 2019: The text of the Directive was confirmed on the 26thof March by the European Parliament. Article 11 has been changed to article 15 and article 13 has been changed to article 17. Member states now have two years to implement the Directive into their national laws.
A couple months ago, we published two (extensive) blogs on the content of the new Copyright Directive proposal. The ‘trilogue’ negotiations between the EU Council, Parliament and the Commission ended a few weeks ago. This means that the finalization and implementation of the Directive is getting closer and closer. As we promised to keep you posted, this might be a good moment to give you some updates. We will quickly recap the content of the proposal for you.
A controversial proposal
The proposal for the Directive, especially articles 11 and 13, was heavily criticized in the past year. Article 11 of the proposal requires providers of online services to remunerate publishers of press publications, if the online services use more than ‘a mere hyperlink accompanied by individual words’ of the press publication. Although the article is meant to oblige online service providers to share the revenue they earn with the publications written by others, it is not clear what counts as ‘more’ and what the amount of remuneration should be in case of a violation.
Article 13 obliges online platforms, on which a large amount of content is shared by users (e.g. Youtube and Facebook), to cooperate with rightsholders to try their best to ensure that copyright-infringing material is not available on their platforms if no licensing agreements have been concluded. If the material still becomes available one way or another, a platform can only avoid liability if they have made best efforts to obtain authorisation from the rightsholder(s) and if they, after a notification of the rightsholder(s), acted as quickly as possible to remove the protected works, and made best efforts to prevent future availability of the works.
The proposal does not clarify which measures online platforms should adopt to achieve the unavailability of copyright-infringing material, although previous versions of the Directive suggested the use of ‘content recognition technologies’. These so called ‘upload filters’ are controversial, because it is technically very difficult to filter the right content. For example: these filters are not able to recognize parodies or other exceptions of copyright. Critics fear that online platforms will ‘over-block’ to prevent any liability. With the current usage of online platforms to share ideas and art, this may lead to private censorship.
Small and micro enterprises are exempted from the Directive. In the proposal, these are businesses with less than 50 employees and less than 10 million on their annual turnover or annual balance sheet (source). Businesses that have to comply with the Directive need to put complaint and redress mechanisms in place. These mechanisms require human intervention and responses with undue delay. All in all, a lot of obligations.
The trilogue ended: did anything change?
During the trilogue, the EU institutions did not change much to articles 11 and 13. However, Germany and France could not agree on the reach of the exemption for small and micro enterprises. France wanted a Directive without an any exemption at all and Germany, on the contrary, wanted to increase the threshold from a turnover of 10 million to 20 million. As a compromise the threshold remained at 10 million, but additional requirements have been added.
First of all, the services of the enterprises must have been available to the public in the European Union for less than three years. It must be noted that even though these companies are exempted from the Directive, they still have notice and takedown obligations. Furthermore, if they receive more than 5 million visitors per year they must, in addition to the notice and takedown obligations, make ‘best efforts’ to prevent further uploads of (the notified) copyright protected works. The (notifying) rightsholder has to provide relevant and necessary information to help the enterprise achieve this.
This compromise between France and Germany results in a wider reach of the Directive. As a consequence, a lot of digital start-ups will be forced to either implement (costly) upload-filters or to accept (unfavourable) licenses with rightsholders.
What is next?
Now it is up to the European Parliament to formally confirm the text of the Directive; this will come to pass between the 25thand 28thof March. If nothing unsurprising occurs, the EP will confirm the Directive as expected. After the confirmation, the text will be published in the Journal of the EU, after which the Member States have 24 months to adopt the rules of the Directive into legislation.
Until then we will keep following the legislative process closely for you. If you have any questions about how your organisation may be affected, please do not hesitate to contact us.