article / 25 Sep 2018

The ‘Death of the Internet’, is it really approaching?

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The headlines about the so-called Death of the Internet have been frequently occurring in recent weeks. However, it is still uncertain exactly how the EU’s new copyright directive will be formulated and when it becomes reality. So what is the actual meaning of the Parliament voting ‘yes’ to the draft directive on copyright on the internet? What is the status of the legislative procedure and what is expected to happen next? When will we see practical consequences of the Copyright Directive in Sweden and what will it mean?

On 12 September, the Parliament voted to proceed in the legislative process regarding the new EU Copyright Directive on the internet. This means that the Parliament has now agreed on what position it will have in the tripartite negotiations with the Commission and the Council, where the directive eventually is to be adopted by agreement. The proposal, already presented by the Commission in 2016, is one part of a strategy for modernising and further harmonising copyright rules in the EU. (1)

The proposal for the directive has generated a great deal of attention, especially in the case of two articles, article 11 and article 13. Article 11 deals with the protection of press publications in digital use, which means that companies like Google and Facebook in the distribution of press publications through their platforms may be required to pay copyright holders and media houses, in what is called a link tax in the public domain. Article 13 shifts the responsibility for the distribution of copyrighted material from the users of internet services such as Facebook, Instagram and YouTube to these companies, which means that these companies must ensure that their users do not publish copyrighted material without permission. This proposal has consequences in terms of companies having to use filters to block copyrighted material. The obvious problem is that such filters are often insufficiently accurate and that more material than necessary might be blocked. Another point of view put forward is that it may be difficult for services that today are free of charge to remain so, as copyright holders should be able to get compensation for the link.

The articles are highly disputed. On the one hand, right holders advocate the proposals and want to be able to get paid for their copyrighted material no matter where it is published. On the other hand, the companies that are held responsible according to the proposals are raising loud criticism. Many organisations criticise the restrictive effects of the proposals on internet and freedom of expression on the internet.

In order for the directive to be adopted, it must be approved by both the Council and Parliament. The Council agreed in May this year, following lengthy negotiations and compromises between the member states, on a general approach to the proposed directive. The Council’s position regarding the disputed proposals is that the protection of press publications in article 11 should not cover the use of insubstantial parts of such publications and that the protection should only last for one year and not for 20 years as proposed by the Commission. In addition, the Council considers that companies that, pursuant to article 13, would have been responsible for the publishing of copyrighted material should not be held liable if they demonstrate that they have acted in a diligent manner and made their best efforts to prevent infringed content on their platform. Among other things, this would include, after notification of copyrighted material being published unauthorised, to take steps to remove this material and prevent future access.

The Parliament, in turn, could not agree on the amendments in the directive in the summer, but after further review of the amendments, the Parliament could on 12 September agree and decide to proceed to tripartite negotiations. The Parliament’s revised proposal represents a number of important amendments compared to previous proposals. Among other things, the Parliament wishes to introduce measures to protect small businesses and freedom of expression, as well as exclude online reference works such as Wikipedia. An important clarification by the Parliament on article 11 is that sharing hyperlinks in combination with individual words describing the press publication should not lead to a remuneration right for the author, instead it is necessary to reproduce more of the press publication for that to be the case. Where the limit is reached considering ‘individual words’ is still uncertain, but it is obvious that the interpretation of this exception will be crucial for the effects of legislation. A more generous interpretation could mean that linking and previewing of press publications on social media and search engines would be exempt from liability. The Parliament proposes that the protection of press publications should last for five years, instead of 20 years as proposed by the Commission or one year as proposed by the Council. Furthermore, the Parliament considers that websites which, as a result of article 13, introduce upload filters has to calibrate these sufficiently to only remove such material that is infringing copyright protection. In addition to automatic filters, staff shall also be involved in this work, in order to receive and review complaints about material incorrectly removed.

The Parliament’s and Council’s approach to the proposal for the directive thus differ in a number of important points, and only when these institutions agree the directive can be adopted. The next step in the process is that the Commission, Council and Parliament in October will begin negotiations on the proposed directive, where the institutions present their positions and amendments. Following the directive entering into force, the member states will have one year to implement national legislation as a result of the directive. Hence, the directive becomes reality in Sweden no sooner than when the Swedish Parliament (Sw. Riksdagen) adopts Swedish legislation on the basis of the directive.

Provisions similar to the so-called link tax already today apply in Germany and Spain. In Germany, the copyright holder can waive its right to compensation, which has also become very common. In Spain, such waiving cannot be made, and Google therefore stopped providing Google News in the country. The question is who ultimately benefits from the so-called link tax. A report produced by Spanish press publishers states that Spanish legislation has resulted in adverse effects not only for actors like Google but also for the newspaper industry as a whole. The report points out that the regulation makes it difficult for new actors to enter the newspaper market, leads to less variation in the content of news reporting, makes it more difficult for readers to find articles, reduces the numbers of readers, lessens ad revenues, and reduces the impact of advertisements. Given the consequences of the Spanish report, a probable outcome of article 11 is that media houses choose to refrain from compensation. Being deleted completely from news services like Google News leads to fewer clicks and fewer people visiting the website of the newspaper. Thus, it should be in the media houses’ interest to waive their right of compensation.

EU parliamentarians testify about unprecedented lobbying, and the great public involvement in this issue is also evident from European news reporting since the Parliament’s decision. Internet companies invest a lot of resources in stopping or at least limiting the effects of the proposal. The goal is that the directive should be negotiated and approved by the Council and Parliament by the end of 2018, along with the other proposals in the strategy for modernisation of copyright. (2)  In view of the reactions encountered by the proposal, the lobbying activities, the differences in the position of the Council and Parliament at hand and the negative consequences demonstrated in Germany and Spain, we believe it is not unlikely that we have a complete copyright directive no sooner than during next year, and then probably further revised to be accepted by the legislative institutions. Thereafter it will take another year before the member states adapt their national legislation to the directive. So, it remains to be seen how quickly the legislators can agree, how the directive will ultimately be formulated and what the actual consequences will be for both the member states and the internet at large.

(1) In addition to that more harmonised legislation is expected to simplify cross-border access to copyrighted materials within the EU, the directive is intended to facilitate research and education through specific exceptions and to clarify how online services may distribute copyrighted material. The proposal for the directive complements the EU’s existing copyright legislation, consisting of several directives, including the 2001 Copyright Directive. Although this directive already increased the harmonisation of the legislation of the member states, the EU institutions now consider that adaptations to the digital online environment are necessary, which have since undergone major changes. The Commission concludes in the new draft directive that development has led to the emergence of new business models, and that the internet is now the most important marketplace for distribution and access to copyrighted material.

(2) One of the other proposals regarding copyright is a regulation aimed at facilitating online access for certain online broadcasts and broadcasts of television and radio programs. Legislation to facilitate, inter alia, persons with impaired vision is also introduced.

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