Authors’ Group Study: Copyright Safe Harbour Provisions Distort Market

Copyright “safe harbour” rules aimed at ensuring the free flow of information by internet service providers without liability for infringing content are “distorting the digital market, profiting tech giants and leading to significant underpayment of copyright owners,” according to an international authors’ industry association study released this week.

The study, “Economic Analysis of Safe Harbour Provisions,” by Prof. Stan Liebowitz of the University of Texas at Dallas, assesses how “safe harbour” rules in copyright law, “drawn up a quarter of a century ago to help nurture early online commerce,” have damaged copyright owners.

The study was commissioned by CISAC, the International Confederation of Societies of Authors and Composers. The press release and link to study are here.

CISAC Director General Gadi Oron said in a statement: “This study shows that copyright safe harbours, designed for a 20th century internet, urgently need re-examining in the 21st century. Instead of shielding internet companies that merely offer storage facilities, as was their original purpose, safe harbours are today being used to shield tech giants from rewarding creators for their work. This is not a problem that can be solved by industry alone – it is a responsibility for governments that care about the cultural and creative sector. Creators deserve 21st century laws that ensure fair payment for their work, not laws that cause the value of their works to be siphoned away to global tech companies. Technology has evolved, and the law should evolve with it.”

According to the release, findings include:

• Because of the safe harbours, User Upload Content services such as YouTube have “an inefficient and unfair advantage” when they negotiate rates for permission to use copyrighted works on their sites.

• As a result, UUCs either do not pay for copyright permissions or, if they pay something, they pay less than the market rate.

• Other online services (such as subscription services, e.g. Spotify and Apple Music) are at a competitive disadvantage when competing with UUC platforms. These services generate lower revenues and have a reduced user base, because of the distorting impact of safe harbours.

• As a net result, because of the distorting knock-on effect of safe harbours on the wider market for creative content, copyright owners are seeing reduced copyright payments from both UUC and other services. These reductions would appear to be “very substantial”.