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Digital Single Market: The Evidence – copyright

Copyright (official)

Across the EU, as in most world jurisdictions, certain uses of copyright protected works take place on the basis of exemptions and limitations to copyright, which are contemplated in law in response to the inability of the licencing markets to deliver contractual solutions (market failure) or to support public policy objectives. In these cases, a defined group of users does not have to ask for the authorisation of right holders and enter into licencing agreements to carry out certain activities (for example, cultural heritage institutions making copies for preservation purposes). In some cases, exceptions are linked to the existence of licensing schemes, in the sense that if a license agreement is in place, certain exceptions might not apply. Given the current framework in the EU, the existence and scope of exceptions to copyright varies in different Member States. Whilst this can have a little relevance for the DSM in certain cases (e.g. exceptions for broadcasting in hospitals and prisons), differences in the way Member States implement exceptions can be problematic for activities where the cross-border aspects or the European significance of a certain activity is relevant and growing in importance, for instance in the area of education and research (for example a recent study identified 253 cross-border higher education programmes operating in the EU).

Most exceptions to copyright foreseen in European law remain optional for Member States to implement, resulting in a fragmented landscape across the EU. Exceptions may or may not have been transposed in national law, and their wording and scope can vary considerably. The most recent development in this area is the Orphan Works Directive, which introduced an exception for the use of orphan works by institutions like libraries, museums and archives. This is one of the very few exceptions in EU law that are harmonised and mandatory for all Member States. The DSM objective could therefore warrant more harmonisation at EU level for certain exceptions, as well as flanking measures to ensure that their implementation and application do not keep acting as a barrier in the single market. Exceptions must comply with criteria established by international copyright and trade treaties (to which the EU and their Member States are parties), while solving identified problems or objectives. Challenges, opportunities and options for intervention are very specific to the different areas for which exceptions exist. The scope for EU intervention will depend on the availability of evidence and the maturity of given issues.

With the development of new online services, a sense of unfairness is perceived in the relations between Internet platforms and right holders: there is a growing concern from certain stakeholders from the creative sector regarding the lack of level playing field on the online content market, due to uncertainties in the current legal framework which was designed at a time when technology limited the ways content could be distributed and made it easier to define the roles of different market players. Today, the lines between hosting service providers and content service providers engaging in the act of communication to the public of protected works under copyright rules have become more difficult to distinguish. This legal uncertainty could create distortions on the online content market where platforms that make content available to the public without a licence compete with licensed services for similar or equivalent services to the consumer. The unclear legal situation can also make it hard for right holders to licence their content with the platforms or obliges them to accept licensing conditions that are below the potential value of the content.

The fragmentation of EU law in the area of civil procedure law makes it cumbersome for the rights holders to enforce their rights across the EU. As an example, where local legislations implementing article 8.3 of the InfoSoc Directive provide instruments for obtaining injunctive measures against intermediaries whose services are used by a third party to infringe a copyright or related right, these injunctions need to be sought after in each Member State, with very little possibility to leverage on the costs, time and/or efforts incurred in the first proceeding. The case of massively infringing websites, often located outside EU, has created the need to develop new types of actions to complete traditional enforcement measures. For instance, “follow the money” approaches have been put in place in order to reduce advertising revenues available to these infringing websites. Actions are sought from intermediaries such as advertising companies or payment processors. Whilst a follow the money approach has been implemented in a number of countries, including in the EU, schemes are not available in all Member States.

With the development of new online services, a sense of unfairness has grown among stake holders regarding the split of the revenues generated by works and performances online. This sense of unfairness is perceived in two areas:

In the relations between Internet platforms and rights holders: there is growing concern from certain stakeholders from the creative sector regarding the market power of certain platforms in the online market, potentially able to impose their conditions to consumers and SMEs. In addition to this market power, the liability exemption provisions provided under the E-commerce directive to the benefit of certain intermediaries acts, de facto, as a tool enabling platforms hosting third party content, to provide services to the public equivalent to fully licenced services (such as Spotify), without having to seek an authorisation from the rights holders or negotiate the conditions of use of their contents.

In the relations between the various rights holders: new means of exploitation question the current shares of revenues between authors / performers, on the one hand, and producers / publishers / broadcasters, on the other hand, and the need for new remunerations and levies, or for a broader use of a collective management of rights.