Digital Single Market

On 13 February 2019 in Strasbourg the EU agreed to introduce new copyright rules to create a fair, transparent and predictable business environment for users of online platforms.

Key features of these rules include new exceptions to copyright (new activities permitted to be done without prior approval of copyright owners), new rights of copyright owners, new requirements to hold compulsory business negotiations over use /licensing fees, and new mechanisms ‘for resolving disputes and complaints.’ These changes will apply to ‘the entire online platform economy – approximately 7,000 online platforms or market places operating in the EU – which include world giants as well as very small start-ups, but having often an important bargaining power vis a vis business users. Certain provisions will also apply to search engines, notably the ones concerning ranking transparency.’

These reforms will implement the EU’s Digital Single Market Strategy, developed in recent years via lengthy negotiations between three key constitutional organs: the EU’s Commission, Parliament and Council of Ministers. Achieving agreement to create any new EU rules takes several years of trialogue, requiring consideration of substantial research into copyright problems and potential solutions to digital uses and abuses throughout the EU. Such research showed that, for example, almost half of small and medium companies in the EU (that use online platforms to sell their products and services) experience problems, a significant number of which arise from contractual disputes and directly cause sales losses of ‘around €1.27-2.35 billion’.

The EU’s Vice-President for the Digital Single Market commented: ‘Today’s agreement marks an important milestone … that will benefit millions of European companies relying on digital platforms to reach their customers. Our target is to outlaw some of the most unfair practices and create a benchmark for transparency, at the same time safeguarding the great advantages of online platforms both for consumers and for businesses.’

Digitally-related problems and solutions were identified by the President of the EU Commission in 2016 in the State of the European Union Annual address (Towards a better Europe – a Europe that protects, empowers and defends.) President Juncker advocated creation of a digital single market that would ‘bring down barriers to unlock online opportunities’ and in particular introduce new ‘copyright rules fit for the digital age’. His proposals were not mere political rhetoric or ideology, but were based on persuasive empirical research evidence that ‘as the world goes digital, we have to empower our creators, protect their works.’

Juncker’s strategic objectives are effectively a proverbial three-legged stool. Firstly: in order to give internet users better choice and access to content online, new copyright rules should make it easier for broadcasters to enrich their online offers across borders of all Member States within the EU. Secondly: new exceptions to copyright rules should allow students and teachers, and academic researchers, to use digital materials and technologies (across borders) for the purpose of illustrative learning/researching (without permission of copyright owners); similarly, for use (across borders) of archival records in the EU’s museums, libraries and film archives; and new copyright rules should ensure that blind and visually impaired people are not limited in their access to culture (across borders) because the formats they need are not readily available. Thirdly: in order to create a fairer environment for creators and the news media, new copyright rules should strengthen the position of copyright owners to negotiate remuneration for use of their creative content (across borders) by, for example, video or music sharing websites/streaming services, internet radio services, social media, news websites or apps or search engines.

Online users and rights holders in all 28 Member States would have the same benefits enforceable throughout the EU. Sudden, unexplained account suspensions would be outlawed; plain and intelligible language should be used for terms and conditions, which must be made easily accessible and cannot be changed without at least 15 days advance notice. Marketplaces and search engines must disclose the ‘main parameters they use to rank goods and services on their site, to help sellers understand how to optimise their presence … and must exhaustively disclose any advantage they may give to their own products over others … and must also disclose what data they collect, and how they use it – and in particular how such data is shared with other business partners they have.’ The EU Commissioner for Internal Market, Industry, Entrepreneurship, and SMEs commented: ‘Our new rules are especially designed with the millions of SMEs in mind, which constitute the economic backbone of the EU. Many of them do not have the bargaining muscle to enter into a dispute with a big platform, but with these new rules they have a new safety net and will no longer worry about being randomly kicked off a platform, or in-transparent ranking in search results.’

Furthermore, online platforms would be required to establish ‘complaint-handling systems’ to give users more options to resolve disputes through out-of-court mediation; lawsuits against online providers for non-compliance could be brought by collectives representing complainants (to overcome fears of individual retaliation and/or costs from doing so). The EU Commissioner for the Digital Economy and Society said: ‘These are the first rules of this kind anywhere in the world, and they strike the right balance between stimulating innovation while protecting our European values. They will improve the relationship [with] platforms, making it fairer and more transparent, and ultimately leading to great advantages for the consumers. We will closely monitor the evolution of this field, not least through our Online Platform Observatory.’

The EU’s so-called ‘art industry’ was included when researching and developing these new copyright rules, but they are aimed not only at the EU’s art communities, but also at all EU ‘creative industries’. All in all, the new rules will correct longstanding weaknesses and flaws in EU copyright laws and their enforcement – across borders – by ‘content creators’ (including visual artists, film directors, musicians, composers, and writers) whose works have been economically exploited by global online platforms without appropriate permission from, or fair payment to, originators. This means that global digital platforms must have business agreements with EU content originators licensing uses of their works. It also means that such platforms would be required to monitor content uploaded by third parties to check that no copyright violations had been posted. Exceptions are made specifically for ‘new small platforms’(online service providers operating for less than three years in the EU, with an annual turnover of less than €10 million, and less than five million monthly users): they would ‘only have to prove that they have made their best efforts to obtain an authorisation and that they have acted expeditiously to remove the unauthorised works notified by right holders from their platform.’

The new rules will come into force on a date yet to be decided, via a legal measure directly applying within the national laws of each Member State. Member States and those likely to be affected are usually given at least a year to prepare themselves for implementation. If the UK is a Member of the EU’s Digital Single Market when it kicks in, then the new copyright rules will apply to benefit UK artists and other authors by giving them stronger legal rights and protections throughout the EU.

© Henry Lydiate 2019

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This article is from the Artlaw Archive of Henry Lydiate's columns published in Art Monthly since 1976, and may contain out of date material. The article is for information only, and not for the purpose of providing legal advice. Readers should consult a solicitor for legal advice on specific matters. Artists can get free online legal information from Artquest.