Copyright wrongs

EU's proposed law could shut out small online platforms

The European Union (EU) has just cleared the draft of a new copyright directive, which the European Parliament must vote on in March. Some of the provisions are extremely controversial because they could alter the way in which content is presented on the web. To be sure, at one level, it appears that an attempt has been made to offer strong protection to the rights of copyright holders.  However, the suggested mode of protection could be prohibitively expensive and, therefore, shut out small online platforms. As of now, online platforms protect copyright via a process of safe harbour rules and takedown notices. In other words, it is assumed that the platform — it could be Google, Facebook, YouTube, WordPress, or a small platform — doesn’t know if any content is under copyright or not. If a takedown notice is received, the platform has to take it down within a stipulated time to avoid facing legal consequences.

But the proposed EU law would demand that the host platform pre-emptively check for the copyright status of content before it is uploaded; the new directive says best efforts must be made to contact copyright holders before uploading. This provision would be imposed on any platform, which has over five million unique monthly visitors, or an annual turnover of above ^10 million, or an operating history exceeding three years in the EU.  

This presents a huge technical challenge — it will be expensive to design and implement such an “upload filter” to search for, and flag potentially copyrighted content. The large platforms may have the resources to do this but small players will not be able to comply. As such, this could lead to a situation where content disappears and the current, dominant players in this space become protected monopolies without the fear of competition from new entrants. The new directive also proposes to offer more revenue to copyright holders by narrowing the definition of fair use.  While, for example, scientists and academics will be able to use content and data, and creative persons would also be able to evoke fair use, platforms might have to share revenue. There is a proposal that a platform would be restricted to a single word or very short phrases, before it would be liable to share revenue. This has huge implications for the news aggregator market because it directly targets that model. For example, a Google or a Facebook can now share a string of headlines of content from media organisations, and derive revenue from placing ads relevant to that news. 

This would also apply to television programming and music as well, although there is a long list of exemptions such as online non-profit organisations such as encyclopaedias, marketplaces advertising wares, open source platforms, cloud storage services, etc. While this could provide revenues for copyright holders, it will be a very cumbersome task to check and license all content.  This is especially true for content that may have multiple copyright holders. This provision has been criticised by the Electronic Frontier Foundation, which fears it might lead to arbitrary “black box” censorship by hosts who would rather be safe than sorry. If passed into law, member countries may interpret it in slightly different ways. Many provisions would also need to be clarified by application of case law. But it would clearly change the way the digital world works.