The White Paper on Copyright: Setting an Industrial Policy for Europe?

June 27, 2014

Achieving a modern copyright regime that is apt for a digitally connected continent requires a strategic vision. The leak of the European Commission’s White Paper on copyright policy which appeared this week has a strategic vision – unfortunately, one which seems to see copyright as an instrument of industrial policy designed “to ensure a balanced distribution of value among market players”. It is conceptually wrong to pick winners and losers in the marketplace via copyright rules. While copyright rules were not designed to do this, the Commission’s White Paper seems to suggest that this is a legitimate vision based on the ‘perception’ of some claiming that they are not getting a fair share from the online economy.

At the same time statements on the “sustainability of value chains that are based on copyright works” raise questions on what the Commission envisions to legislate for. Copyright rules should neither try to protect existing business models nor try to prevent new market developments and innovations – even if they are very disruptive for some players. In fact, the White Paper implies that all value online comes from professionally produced content industries. It fails to provide evidence on the new, pro-active role of consumers and new creators who are part of a dynamic, rapidly evolving landscape for creative content. Contrary to certain statements, this landscape is increasingly driven by digital technology enabling the creative sector to thrive. In addition, traditional content industries like books, music, audiovisual and video games have grown over the past years, largely driven by digital distribution chains and formats.

A strategic vision should include a proper balance in the copyright framework. Creativity must be incentivized and rewarded without, however, undermining legitimate interests of users and the broader development of a thriving digital economy in Europe. Establishing balance in copyright is not only for the purpose of addressing market failures. Making sure that copyright does not collide with fundamental rights and leaving enough breathing space for Europe’s digital innovators are examples of two other compelling reasons for balance in copyright.

The principal way through which European copyright law achieves this balance is the list of exceptions and limitations. The White Paper’s recognition of an insufficient level of harmonization of exceptions across the EU and some references to the need for more flexibility in Europe’s copyright system is a welcome development. Flexibility is the key to making copyright future-proof as technology and innovation will remain unpredictable. If a more flexible copyright regime cannot be achieved at EU level, encouraging Member States make use of existing flexibilities is a policy which should be supported.

Exceptions, however, should not be linked to a fair compensation requirement. As a general rule, once an exception is compliant with the Berne three-step test, there is no justification to introduce fair compensation. Private copy levies show how dysfunctional the system of providing ‘fair compensation’ is and a new report commissioned by the Commission recommends to scrap private copy levies altogether.

In going forward, the Commission must reconsider its strategic vision for copyright. Is copyright really on appropriate tool for industrial policy-making?

As for specifics, any policy must ensure that citizens’ daily online activities like linking and browsing remain legal. This is of crucial importance for the digital economy and citizens’ interactions online. In the Newspaper Licensing Case the CJEU made clear that browsing falls under the mandatory exception for temporary acts of reproduction. In Svenssonthe Court equally declared hyperlinking to not breach copyright rules. The outcome of any future course of action must support these decisions.

At the same time, the White Paper should not leave any ambiguity as to the role intermediaries should play in ‘assisting’ copyright enforcement actions. Leaving the possibility open for intermediaries to “pro-actively help in addressing the commercial offer of copyright-infringing content on the Internet” risks to compromise key provisions of the E-Commerce Directive. In a very delicate system of protections and responsibilities, this Directive explicitly absolves intermediaries from an obligation to monitor their online platforms. This principle has been confirmed by judgments of the CJEU. There is a balance in the E-Commerce Directive providing the basis for a lot of thriving businesses in Europe’s online economy – it is important to not upset that balance.

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