EU Copyright Directive: will there be a copyright tax for sharing content online?

Much has been made of the new EU Copyright Directive, with commentator’s opinions being polarised. Some say the Directive will offer greater protection for those operating in the creative industries but, in some cases, also has the potential to be “catastrophic” for online service providers.

By way of background, the EU Copyright Directive essentially seeks to apply and tweak existing copyright laws in the context of the internet.

The EU Copyright Directive will not be “directly effective” in any EU Member States, meaning that each Member State is allowed to interpret the Directive as its sees fit and implement the Directive through its own national laws, provided that certain outcomes are achieved. As such, each Member State is able to choose, to some extent at least, how the Directive will operate in practice.

A final formal vote as to whether or not the directive will come into force will happy in early 2019. In our view, the directive is unlikely to be rejected, however.

A lot has been made of Articles 11 and 13 in particular. Article 11 intends to grant online publishers direct ownership of copyright in their publications, and therefore the ability to request payment of a licence fee when their publications are linked to by other service providers.

Article 13 removes the existing “mere conduit” exception to infringement – i.e. the Directive states that service providers may become liable for infringement arising as a result of users uploading infringing content to the service provider’s website.

Our view is that, although Article 11 this may result in larger organisations such as Google and Facebook incurring further cost as a result of the need to pay licence fees to copyright owners, the amount of revenue generated for those larger companies as result is still likely to vastly outweigh licence fees to be paid. In other words, larger companies still stand to profit from linking to others’ publications, just maybe not as much – and individuals stand to profit from receiving royalties from these larger companies. How payment will be ensured, however, is a different matter entirely.

Our view is that Article 13 also has the right intention – it is designed to ensure that service providers collaborate with copyright owners to ensure that copyright works are not infringed through operation of the service provider’s website. That said, it is difficult to predict how this will work in practice. Service providers reviewing every piece of content uploaded to a website is likely to be time consuming, costly and, in some cases, impossible. This potentially leaves service providers open to liability in many cases, but also does more to protect the interests of copyright owners.

In summary, the draft Directive leads us to believe that copyright owners stand to benefit from enhanced protection and enforcement mechanisms, with the standard expected of service providers in policing infringement being higher.

We will have to wait and see how this works in practice, however.

Wrriten by Tom Broster