InsideSources

The European Union reached an agreement on its updated Copyright Directive this week, after proposing changes to the directive last fall, reviving the debate over intellectual property rights, censorship and competition in the internet economy.

The biggest changes are in Articles 11 and 13, which require tech platforms like Facebook and Google to pay content creators like newspapers, journalists, artists, musicians and others for distributing or replicating their intellectual property. Another notable change is the requirement for tech platforms to regularly scan their sites for copyright infringement, and to take down any content infringing on creators’ intellectual property rights. This is also known as an “upload filter.”

Think tanks like Public Knowledge and the Electronic Frontier Foundation roundly condemned the updated Copyright Directive, arguing the changes will cause censorship and reduce competition between tech platforms, citing the virtues of a “free and open internet.”

The EFF supported an EU campaign in December 2018 to stop the changes from going into effect. Tech platforms, including Facebook and Google, oppose the changes as well.

“Articles 11 and 13 of the Directive are reckless giveaways to the legacy entertainment and media industries that will restrict legitimate online expression, entrench the power of dominant internet companies, and make it harder for all of us to share and access trustworthy information,” Public Knowledge Global Policy Director Gus Rossi said in a statement provided to InsideSources.

The EFF published a blog post condemning the final, agreed-upon changes to the Copyright Directive, saying they will actually hurt content creators instead of help them.

“Some of its clauses gave artists and scientists much-needed protections: artists were to be protected from the worst ripoffs by entertainment companies, and scientists could use copyrighted works as raw material for various kinds of data analysis and scholarship,” EFF Special Advisor Cory Doctorow wrote. “Both of these clauses have now been gutted to the point of uselessness, leaving the giant entertainment companies with unchecked power to exploit creators and arbitrarily hold back scientific research.”

Doctorow and Public Knowledge fear the upload filters are “a gift to fraudsters and criminals, to say nothing of censors, both government and private,” because the filters operate under black-box algorithms and often do a poor job sifting copyrighted material from public domain material.

Doctorow also argues that smaller tech platforms will find compliance with the directive too expensive and burdensome and will exit the market, solidifying the biggest platforms (like Facebook and Google) as dominant players in an internet oligopoly.

Roslyn Layton, a visiting fellow specializing in tech policy at the American Enterprise Institute (AEI), thinks opponents of the updated directive are too fixated on extreme, unlikely scenarios.

“The critics will always want to point to the extreme far off example and ignore the masses of people who don’t get compensated at all,” she told InsideSources. “I think it’s more important to preserve the incentives for artists to make a living for their work. I’m not worried about censorship. We’re flooded with content. Our problem is we have too much. We don’t have enough hours in the day to view it all.”

Layton thinks all tech platforms — especially the biggest ones, like Facebook and Google — should pay content creators for distributing and replicating their content. The way the system operates, tech platforms essentially rob creators of fair compensation for their own created works.

“The internet was never interested in paying the creators of the content,” she said. “When you’re Hungarian or Bosnian, unless there’s some way to license your works, there’s no way to get compensation for your work. The Google model puts zero attention to that. There are fixed costs to create content, and one way or another you have to recoup them, and Google has never been interested.”

Instead of reducing competition between tech platforms, Layton believes the updated directive will encourage specialization and actually diversify the market.

“I think it will encourage specialized platforms in particular mediums with a particular audience,” she said. “You can look at newspapers, like the Wall Street Journal, the subscriptions are free and paid. It should actually allow diversification away from the large giants.”

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According to the Free State Foundation (FSF) — a Maryland-based free market think tank — the U.S. needs tighter copyright laws that crack down on tech platforms like Google and Facebook.

The FSF recently published a study arguing that the copyright provisions in the new United States Mexico Canada Agreement (USMCA), or NAFTA 2.0, don’t adequately protect U.S. artists, musicians, filmmakers and other content creators — and it’s costing the U.S. and other countries billions of dollars every year.

“The proposed USMCA has room for improvement,” FSF states in the report.

Instead, the FSF reasons U.S., Mexico and Canada should implement laws that force tech platforms to “notice and take down” content that infringes copyright — like redistributed films, TV shows or music.

Under Section 230 of the Communications Decency Act, tech platforms that provide access to creative content — like Google and Facebook, for example, or Twitter and Tumblr — are fully immune from all liability if users upload copyrighted material to their sites.

This principle was incorporated into the new USMCA under Section 512. But the FSF says this principle is “outdated and ineffective in protecting digital music and video content from massive online infringement on today’s popular user-upload websites like YouTube.”

“A provider receives immunity if it ‘responds expeditiously to remove, or disable access to, the material that is claimed to be infringing,'” the FSF states in its report. “…Judicial interpretations of Section 512 have widened the circumstances in which online providers can claim lack of knowledge of infringing activity and thereby receive immunity. Also, court precedents make it burdensome to pursue takedowns when infringing uses of the same content take place across multiple web pages on the same website.”

Ironically, the European Union (EU) addressed these concerns in its updated Copyright Directive, which requires tech platforms to use “upload filters” and regularly scan for and take down copyrighted content, which some tech experts and industry players say sets a precedent for censorship.

Stricter copyright laws holding tech platforms liable for the content they provide access to are very unpopular in Silicon Valley. Besides lobbying heavily to get Section 230-like language incorporated into the USMCA so as to protect tech companies from copyright liabilities, Big Tech also decried the EU’s updated Copyright Directive.

But the FSF contends that U.S. intellectual property is too valuable to treat lightly.

“According to a widely cited U.S. Department of Commerce study, intellectual property-intensive industries comprised over 38 percent of the entire U.S. economy in 2014, amounting to a $6.6 trillion contribution,” the FSF report states. “The same study found that IP-intensive industries directly accounted for 27.9 million jobs and indirectly accounted for an additional 17.6 million jobs, or about 30 percent of all U.S. employment.”

The report also cited data showing that the digital piracy of films, music and software cost $213 billion globally in 2015, and by 2022, that number may nearly double.

Because most copyright infringement occurs in other countries, tightening up copyright laws in the USMCA is especially paramount.

Seth Cooper, a research fellow at the FSF and one of the study’s co-authors, told InsideSources that he doesn’t think the U.S. should completely do away with immunity for tech platforms from copyright liability.

On the contrary, he believes the tech industry needs to be reformed and incentivized to protect content creators, not exploit them.

“The principle is sound, what needs to happen is the application of the principle needs to be updated and strengthened,” he said. “We think that the notice and takedown system in the United States needs to be recalibrated for the digital age. The whole system was adopted when the commercial internet was in its nascent stage, and tech has advanced and the capabilities have advanced for spotting and identifying and taking down infringing content. There’s a lot more user upload technologies that simply didn’t exist when the [Communications Decency Act and NAFTA] was enacted.”

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