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How the E.U.’s Copyright Directive Impacts the Internet Economy

Maya Sharma, Specialist, Government Affairs, Consumer Technology Association

In September  2018 the European Parliament passed its Copyright Directive. Described by the EU as an effort to reign in tech platforms’ use of copyrighted, shared content, the decision will have lasting impacts on freedom of expression and creativity online. Particularly problematic to the internet economy are Article 11 and Article 13 of this legislation, posing long-lasting issues for technology companies, consumers, and creators, such as artists and musicians. While the intent is to protect copyright holders’ work online, the proposals will have unintended consequences.
To understand the Copyright Directive’s implications, it is useful to note the provisions in Article 11 and Article 13. Article 11 establishes a “link tax,” requiring platforms to pay news or press groups before linking to their content. Linking to something is an underpinning of how we operate online, and without it would create barriers to accessing information. 
In fact, sharing news blurbs or phrasing an article has been protected by international copyright treaties for decades. Article 13 makes platforms liable for copyrighted content shared on their sites. This would create an “upload filter” for content to pass through before it is posted, ensuring that it does not include any material that has been copyrighted.
Article 13 could force technology platforms, like YouTube, Facebook, Instagram, Reddit and others to block new videos and content in the EU’s 28-member states. Tech companies will have to build costly mechanisms to screen content, like YouTube’s Content ID, to comply with the Directive. This content could be anything from educational videos, tutorials, fan music covers, mash-ups or parodies.  Unless it is proven that the video or content poster owns all the content in those original videos – meaning all visuals and sounds, it will be removed.  
So much content online is covered under fair use in the U.S. Because this content is transformative in nature, used in reporting, teaching tutorials or parody, our laws permit it. If a video or post qualifies as fair use, it’s not infringing on existing copyright. Despite these sound American laws, the E.U.’s Copyright Directive stands to challenge the foundations of fair use by our creators and entrepreneurs today.
If the Copyright Directive is approved as final law in the coming months, European creators will either be blocked or prevented from uploading new content in the E.U. if there’s partial or disputed copyrighted material detected. For creators not in the E.U., platforms will likely have to block their content to viewers in Europe.  This will take away important audiences – and income – for many.
The impacts of this legislation will be far-reaching. Creators and technology platforms will have trouble reaching European customers, subscribers and fans.  Whereas YouTube’s Content ID has already paid more than $3 billion to copyright holders on YouTube, showing that industry is trying to combat piracy and offer solutions that monetize creativity on the internet, smaller companies like Patreon or startups that foster creativity may not survive in the new regulatory regime.
What’s more is that consumers will be restricted from accessing informative videos, compelling art and their favorite artists in the E.U.  The best course of action will be to find a solution that protects rights holders and creators in a more equitable way. All stakeholders should work together to foster a vibrant internet economy.