Copyright in the digital world: what’s new?

/ / Legal x-rays
The digital single market is one of European Union’s most important achievement and its best offer in times of ever greater globalization. The aim of the DSM strategy is to create an area where businesses and consumers have unrestricted access to digital goods and services all over Europe, where the free flow of data creates an environment that enhances both competition and innovation while the digital economy is significantly  boosted . However, digital single market’s aim is not only to improve the European economy, but also to protect citizens’ copyrights, which are becoming more and more sensitive, as they are constantly violated. What is the connection between DSM and copyrights? In the limits of the improved access to digital goods and services the DSM offers, the European Commission has suggested a more modern European legislation on intellectual property rights to be protected in the single market against the provision of online products and services.  What does the new copyright Directive forecasts? This new Directive (EU 2019/790) foresees, among others, measures aiming at improving the position of right- holders to negotiate and be remunerated for the exploitation of their work by online services giving access to user-uploaded content. Such rights are granted to authors (copyright or authors’ rights) as well as to performers, producers and broadcasters. More specifically, there rights include:
  • Economic rights which enable right holders to control the use of their work and other protected materials and be remunerated for their use. They normally take the form of exclusive rights, for example exclusive right to authorize or prohibit the making and distribution of copies as well as communication to the public. 
  • Moral rights include the right to claim authorship of the work and the right to object to any derogatory action in relation to the work.
These rights are precisely the content of the most controversial article in the new Directive, Article 17 (previous 13). But what does Article 17 foresee? Article 17 states that content sharing services must be licensed by (copyright) owners. This means that creators and performers will be able to claim additional remuneration from distributors who exercise their rights when the remuneration originally agreed is disproportionately lower than the distributor’s profits. If no authorization is granted, online content-sharing service providers shall be liable for unauthorized acts of communication to the public, including making available to the public, of copyright-protected works and other subject matter, unless the service providers demonstrate that they have: (a) made best efforts to obtain an authorization, and (b) made, in accordance with high industry standards of professional diligence, best efforts to ensure the unavailability of specific works and other subject matter for which the rightsholders have provided the service providers with the relevant and necessary information; and in any event (c) acted expeditiously, upon receiving a sufficiently substantiated notice from the rightsholders, to disable access to, or to remove from, their websites the notified works or other subject matter, and made best efforts to prevent their future uploads in accordance with point (b). It is important to note that these rules apply to services that have been available in the EU for more than three years, or have an annual turnover of more than € 10m (£ 8.8m, $ 11.2m). Prior to the new copyright Directive all well-known online platforms (Google, YouTube, Facebook) from the first years of their existence included uncountable copyrights of their users. Most commonly, people used to share their creations in these platforms and more specifically, uploaded music songs, poems as well as other work of their creation. This however led to the exploitation of the work uploaded by different users, as YouTube users for example could easily download them for free.   What are the concerns? Users often argue that strict copyright rules could destroy the vibrant internet culture referring to memes for example, which often replicate unlicensed material while the legal status of streamers, who post videos of themselves playing video games online, is also in question. Furthermore, although website owners aren’t required to install content monitoring software to detect copyright material, it will however be impossible in practice to guarantee a site isn’t infringing the rules without this software. While article 13 does not oblige companies to filter the content of users, many argue that companies will have no choice but to enforce filtering mechanisms For example, YouTube already has its own content recognition system, which can detect copyrighted music and videos and block them. It is worth noting however, that many consider that developing and applying such type of filter would be too expensive for small businesses or startups while others argue that algorithms often make mistakes and may remove (and) legally used content. At this point the following remark should also be made: There is a serious and alarming issue of unfair competition regarding such copyright detection filters. As mentioned above, smaller companies will not have the financial resources to buy or develop the filters required, while the € 10m threshold will “reward startups for staying small and pushing growth”, preventing possible investment interest. On the other hand, the obligation to monitor content through expensive software levels, may discourage SCs from investing in new platforms. Such a broad commitment will not only demotivate investment but may also discourage a new generation of European entrepreneurs to innovate and start businesses. Our Firm’s Comment We believe that the scale provided by a completed Digital Single Market will help companies to grow beyond the EU Internal Market and make the EU an even more attractive location for global companies as uniform rules are a market opener. The Digital Single Market will create a fair environment where all companies offering their goods or services within the EU will be subject to the same data protection and consumer rules, therefore implying a sense of security. In this new digital era the new EU Directive on copyright sets new challenges and raises a series of legal issues and dilemmas for all Member-States. We, therefore, anticipate with great interest to legally observe how this new Directive will be implemented by each Member State and the aftermath of such implementation.