Julia Reda-Led Panel Discussion Reveals – Publishers’ Right Faces High Resistance From Academic Circles

By Ines Duhanic

The Greens/EFA Group in the European Parliament organised last autumn the panel discussion titled, “Better Regulation for Copyright: Academics Meet Policy Makers” in Brussels. This is an initiative that together with a recently published study questions whether national and EU neighbouring rights for publishers are actually lawful. The article below gives an overview of the panel discussion and movements that followed in the legislative process in Brussels, with a special focus on the press publishers right.

As in the case of Justitia holding up a set of scales and sword, the European Commission again pulled out their sword of justice recently to balance inequalities in our increasingly knowledge-based economies. In light of the European Commission’s Digital Single Market Strategy, the European Commission presented on 14 September 2016 a legislative initiative to further harmonise the EU copyright framework taking into account the increasing digital and cross-border uses of protected content.

Every time new technology and innovative creations take shape in the marketplace, copyright law as the mirror of a balanced compromise between the rights and interests of the copyright owner and the general public has to provide adequate answers. In order to enable balance to be maintained for all stakeholders in a dispute, the legislator has the choice to answer on two levels. This is either through turning the scales to the more strict, traditional side and thereby remaining a strong position for the copyright owners so that new creations fall outside the definition of copyrighted work, which can if applied too strictly, risk stifling creativity. Or he can allow an open-minded approach by, for example, extending the exception catalogue, which then in turn can jeopardize the interests of already existing copyright owners – a continuously delicate operation since creating copyright law either on the national, European or international level.

In this case, the European Commission decided with its Proposal for a Directive of the European Parliament and of the Council on copyright in the Digital Single Market – COM(2016)593 to apply a more traditional view by highlighting the “weak bargaining position” of existing authors and right holders who represent the “European creativity and production of creative content,” as can be seen in the explanatory memorandum of the Proposal. It is no wonder that there is a great deal of opposition on the part of neo-liberal protagonists.

Stakeholders and commentators are strongly divided on the Proposal. Particularly within the academic circles, the Proposal has attracted sharp criticism. The draft’s most controversial aspects concern the questions of creating a new neighbouring right for press publishers according to Article 11 of the Proposal, the value gap provisions in Article 13, and the proposed introduction of new exceptions and limitations to copyright such as the scope of the new text-and data-mining exception, practically relevant for the education sector and e-online practice.

The panel included renowned experts and high-level representatives from academia, legal practice, the European Commission and the European Parliament in order to discuss in more detail the strategic issues relevant to the Directive Proposal in light of the current political and legal uncertainty. In respect of the commercial and technological challenges in the user-generated sectors, the panel discussion aimed at further developing the European Commission’s Proposal trying to propose certain useful elements as an application of the Commission’s “Better Regulation Agenda 2015” for more comprehensive reform of European copyright law.

1. Article 11 of the Directive Proposal: A New Neighbouring Right for Press Publishers?

Eleonora Rosati, Institute of Law and the Web, University of Southampton, emphasized in her panel speech that the Commission’s Proposal on a publisher’s right is not compatible with the European internal market rationale according to Article 114 of the Treaty on the Functioning of the European Union (TFEU).

Rosati questioned the actual goal of intervening legislatively as to why the European legislator should be introducing an EU-wide right for press publishers while national initiatives already have been realized on the national level, as can be seen in Spain and Germany.

Even from the perspective of the European Commission, which established with its “Accompanying Impact Assessment” that the national experiences in Germany and Spain have been ineffective, “we could see that such legal intervention has failed,” according to Rosati.

In this context, it should be noted that Germany’s publishers recently sued Google in a case which concerned short text passages, as part of Google’s services, so-called “snippets”, which were displayed as part of the individual search result and which happened to be taken from digital press publications. The Regional Court Berlin declared the press publishers’ suit against Google Inc. to be justified in part. [updated]

With the decision of 8 May 2017, the regional Court of Berlin referred to questions for preliminary ruling to the Court of Justice of the European Union. The court was concerned whether the rules on the press publishers’ neighbouring right – as implemented in German copyright law in 2013 – were properly enacted back then. Rosati also expressed her view that the adoption of a press publisher’s right is unlikely to change the situation of press publishers and thus will not improve their “bargaining position”.

With regard to the publishers’ ancillary right, Stef van Gompel, Institute for Information, University of Amsterdam, argued that the rationale for creating neighbouring rights for publishers would not just be unnecessary. Instead, he argued that press publications enjoy a wide range of copyright protection as most press articles, photographs and illustrations are protected by copyright which in practice is usually transferred to press publishers before publication.

Moreover, neither the consumer behaviour nor the advertising market will change if introducing a wholly new right of press publishers to control online news usage, according to van Gompel. He doubted that such a new right within the existing copyright law hierarchy would even worsen the bargaining position of journalists and content creators. Van Gompel emphasized in his remarks that it would be only the big press publishing houses that would benefit from the “pie” as all relevant financial compensation for the online use of press articles would become available for the press publishers and not for the content creators.

The opposite view came from another academic voice, Thomas Höppner, professor of business and IP law at Technical University Wildau, Germany, and partner with law firm Hausfeld LLP Berlin. He argued that extending neighbouring rights to publishers by equating them with phonogram producers would be justified given that press publications can be easily replicated and distributed whereas the press publishers have put time-consuming investment into the concept realization and the complex publishing process such as the structural editing, copy-editing, design and typesetting.

The Commission proposal is an appropriate, necessary and proportionate measure to the specific and legitimate pursued purposes, he said. Höppner was a strong supporter of the German initiative of amending the German Copyright Act that came into effect on 1 August 2013 by introducing the press publishers neighbouring right.

On the panel, he emphasized that the current press publication market is as weak as the internet ecosystem and represents a “classical market failure”. Many aggregators are directly competing with press publishers’ sites for the same advertising budget and also with the same content that the press publishers are producing at high costs, whereas the opposite news-site aggregators merely copy at no costs.

He welcomed a legal framework that ensures that a continuous well-working, high-quality publication system is maintained, which he also sees being realized in the EU directive proposal.

2. Article 13 of the Directive Proposal: Liability of Online Content Platforms

The conference also hosted a panel which focused on the copyright liability of online content platforms and social networks. According to the new directive proposal, hosting providers should be obliged to implement effective technology including content recognition technology such as upload filters. The underlying goal is to combat illegal content on the internet and to reinforce trust and security in digital services and in the handling of personal data.

According to the Communication from the Commission introducing the Digital Single Market Strategy for Europe from 6 May 2015, 52.7 percent of stakeholders say that action against illegal content – either related to illegal activities such as terrorism or child pornography or information that infringes copyright or sensitive personal rights – is often ineffective and lacks transparency.

However, one of the panel speakers, Sophie Stalla-Bourdillon, Institute of Law and the Web, University of Southampton, UK, criticized the new proposal as an ill-conceived policy for two reasons.

Firstly, she criticized the underlying legislative objective to “guarantee that authors and right holders receive a fair share of the value that is generated by the use of their works and other subject matter” by emphasizing that the authors in question do not lose in value when online platforms make use of the work. This new or in Stalla-Bourdillon’s words “transformative” use of copyright works adds their own value, a theory that is questionable according to the prevailing Lockean theory of intellectual property as natural right and the resulting value share right.

The proposed introduction of a stricter online platform liability regime as a reaction to the increasingly appearing illegal content created by consumers on the internet is according to this panel speaker “a poorly formulated problem, confusingly referred to as the value gap conundrum.”

Additionally, she said, upload filters such as Google’s Content ID remain as an expensive technology only reserved for a few dominant major players in the respective market whereas the small ones disappear. She also raised concerns about serious fundamental rights infringements such as freedom of expression and to conduct one’s business, Arts. 8, 11, 16 of the EU Charter. She concluded that the European legislator should have – instead of focusing on the copyright authors whose rights are being infringed – rather simplified the exception landscape.

Tito Rendas from the University Catòlica Portuguesa, Portugal, argued similarly and strongly advocated for deleting, or at least significantly rewriting, the proposal as the value gap proposal lacks basic clarity, using trivial vague language and risks thwarting digital innovation and restricting fundamental rights of internet users and platform operators.

Giuseppe Mazziotti from Trinity College Dublin addressed the problem of value gap on user-generated content platforms from the perspective of the copyright owners by highlighting: “If such services on online platforms, in addition to user creations, systematically give us access to contents we previously sought on radio and TV, why should we grant these platforms the privilege of not remunerating what their businesses rely upon? Are the platforms those media companies ‘by accident’?”

Mazziotti traced the development of online service providers from the neutral and passive platforms that they were in 2000 to the role that they play today, in terms of being neither passive nor neutral. He outlined the current weak position of particularly small-sized, independent content producers and individual creators.

According to him, the notice-and-take-down mechanism is not working well in practice for photographers, writers, composers and film makers and small producers because of the lack of time and financial resources that need to be invested in enforcement procedures.

Finally, the previously mentioned exposure effects which the online platforms often use to advocate are primarily beneficial to performing artists but not to non-performing authors of works such as films or other multimedia. He finally pointed to the enforcement problem the legal practice faces today. Standard terms and conditions that apply to online content platforms contractually oblige subscribers not to share and publish content created by third parties and which they cannot lawfully dispose of. Realizing this contractual obligation would have been an efficient step in this regard.

3. Who Owns Mere Data?

Finally, the conference turned to the Data Economy Package adopted by the European Commission on 10 January 2017. This includes a Communication on building the European data economy and an accompanying “Commission Staff Working Document” on the free flow of data with implementing raw machine-generated data as a new intellectual property right being the primary issue for analysis.

This last discussion led to a new level of reflexivity and, unsurprisingly, quickly reached the limits of an in-depth analysis of our current IP system. Questions such as “should robot artists be given copyright protection or who owns creative pieces generated by artificial intelligence?” came up throughout the discussion in the panel and in the audience.

An introduction of the current policy discussions about introducing a new right for data was offered by Bernt Hugenholtz, Institute for Information Law, University of Amsterdam. He explained the movement for data property, which was originally initiated through a few German lawyers and scholars in response to demands from the automotive industry.

In his presentation, he emphasized the highly problematic issues related to such an all-encompassing right in data. Such a new right would harm the underlying intellectual property system values and principles as it would contravene fundamental freedoms enshrined in the European Convention on Human Rights and the EU Charter. He also said it would jeopardize free competition within the European internal market.

Hugenholtz further said setting an extra layer of rights would create legal complexity and even have a detrimental impact on the existing European as well as international intellectual property law landscape as it would overlap with other IP regimes such as copyright and database rights.

And, he said, it would corrode the IP inherently incentive-based justification theory. Other scholars, such as Ana Ramalho from Maastricht University, have questioned the practical benefits of creating a new right for data producers. She sees the use of existing general contract and competition law instruments available in the respective Member States as sufficient response, an idea that has already been acknowledged by the European Commission itself in its Communication.

Valérie Laure Benabou, University of Aix-Marseilles, focused in her presentation on Article 3 of the proposal to expand the exceptions catalogue by introducing the right to perform text and data mining on legally accessed materials across the European Union.

Data and text mining is a computer science technique used to make massive quantities of unstructured data accessible and useful and has, therefore, the potential to unlock interesting connections between textual and other types of content. This could be almost anything as can be seen, for example, in cybercrime prevention. Text and data analysis is also used to provide a rapid, automated response to the customer to reduce their reliance on call center operators or it can be found in ordinary spam filter systems in email accounts.

Benabou generally welcomed the idea of introducing such a right to make non-commercial research organizations able to understand these new connections between data flows that might result in novel technological discoveries or critical scientific breakthroughs. However, she also identified several issues in respect of legal certainty and raised the questions whether an ex ante and de minimis approach should be applied. She also mentioned that vague legal phrasing as the legal norm of Article 3 leaves the question open as to what concrete types of acts are necessary to fulfil the legitimate purpose.

The panel was also represented through the German Member of the European Parliament Axel Voss, who is the newly appointed rapporteur for the Directive.

Whereas most of the committee panels and the conference participants had been very cautious, Voss took a much more hardline approach. Among the audience there were representatives from the Wikipedia Foundation and also strong opponents of the ancillary right for press publishers such as the German lawyer Till Kreutzer who launched IGEL – Initiative gegen ein Leistungsschutzrecht (Initiative Against Ancillary Copyright).

4. Opinion

Axel Voss, MEP and Rapporteur of the Copyright Directive, Mariya Gabriel, European Commissioner for Digital Economy and Society

One should bear in mind that copyright owners have become increasingly vulnerable to piracy and expropriation and the ultimate answer should be a pro-protective answer rather than liberalizing aggressively the traditional sense of authorship in our digital age era. Similarly, the European Commissioner for Digital Economy and Society, Mariya Gabriel said that respect for intellectual property rights is essential for promoting creativity and innovation and creating trust in the marketplace. The proposed initiatives on the European level are seeking to create a balance between the interests of copyright owners and users which do not need to be opposite ones.

It is generally agreed it is important to provide payment for content so that artists but also press publishers can be rewarded and continue to be creative and innovative. Where we are seeing dominant platform services, we are also seeing unfair remuneration. Despite all criticism and remaining questions, the Commission adopted a prompt, comprehensive response to the growing and evolving challenges posed by the new means of digitalization and technology possibilities whereas some individual MEPs have proposed counterproductive amendments that would further restrict EU citizens from taking advantage of the enormous potential of the already existing European legal initiatives; a path that would definitely lead down a blind alley of inadequate shifts in the balance regime of copyright law. The main focus in the debate about introducing a press publishers’ right should not merely be the question about the exact statistical casual relation between the news aggregation and its impact on online news sites consumption and the revenue status of the press publishers. Whether this is the case or not is an issue that is susceptible to empirical proof, so that it has not yet been possible to establish an unequivocal result. It is therefore the disruptors, the online re-distributors of news, who bear the burden of proving that their actions amount to promotion rather than substitution. As they are unable to do so, a publishers’ right remains appropriate under the fundamental copyright principle that acts of exploitation need to be authorised and remunerated, thus it should be obligatory to intervene when others are free-riding on the effort of commercial news publishers. Especially after the dark experiences in European history with its perverted press concept of Aryanization and later suppression during the cold war, the European legislative bodies are bearing a particularly high responsibility towards the plurality of media and the freedom of press.

5. Post-panel Movements in Brussels

More and more policy makers are expressing scepticism about introducing a new right for press publishers. A new study regarding the potential impact of Articles 11 and 14-16 of the Commission’s proposed directive and commissioned by the Legal Affairs Committee in the European Parliament, “Strengthening the Position of Press Publishers and Authors and Performers in the Copyright Directive,“ recommends the abandonment of ancillary copyright protection for press publishers. Then, following the successful performance of the academic press publishers’ right supporters during a JURI Committee workshop at the European Parliament in early December, Julia Reda made the attempt to counteract this successfully presented counter-arguments of the proponents by making use of the general right to apply for access to internal documents of the European Commission and requested information about a draft paper of the European Commission. This draft paper, published by the Joint Research Centre (JRC) of the European Commission on 20 December, examines the question of neighbouring rights for news publishers. By highlighting several studies and empirical research works, the author of this draft wrongly concludes that news aggregators have a positive impact on press publishers’ revenues and therefore that the proposed ancillary right for press publishers is unnecessary. It could be emphasised that this paper is not able gather momentum, force and validity, as it is marked as draft, and therefore not intended to leave the working sphere of the responsible department in the European Commission; incomplete services of any European institution are not able to reach the same level of reasoning and effectiveness as final decisions do. Whether the Parliament will follow this is still open. The final plenary vote of the European Parliament is likely to occur on 26-27 March 2018.

At the same time, the discussions between the Member States in the Council are picking up steam: The Estonian Council presidency presented their consolidated compromise proposal which has been discussed at the meeting of the Working Party on Intellectual Property (Copyright) on 6-7 November at the Parliament. Harsh criticism has come from the press publishers lobby industry especially from EMMA (European Magazine Media Association), ENPA (European Newspaper Publishers’ Association), EPC (European Publishers Council) and NME (News Media Europe), which are seeing the attempts of the Estonian Government to change the controversially discussed draft as failure. Both alternative sets of amendments on Article 11 – “Option A” and “Option B” – as presented in the Consolidated Presidency compromise proposal worsen the press publishers‘ position, according to the lobbyists.

If, however, the Council comes internally to a result, the Trilogue begins, the negotiation of the representatives of all three institutions, the European Commission, the Council of the European Union and the European Parliament. The adoption and implementation of the directive may then be decided if there is a result; at this stage a controversially discussed topic with an even more unknown outcome.

Ines Duhanic is an IP lawyer in Berlin.

Image Credits: Ines Duhanic