Wednesday, April 17, 2019

What does the new EU Copyright Law have to do with my small business? Perhaps more than you think…

On April 15, 2019, the European Council approved the “Directive on Copyright in the Digital Single Market” — a major change to EU copyright law that was approved by the parliament of the European Union on March 26, 2019 with a vote of 348 yea, 274 nay, and 36 abstentions. The Directive’s next step will be publication in the Official Journal of the EU, after which member states will have two years to implement the Directive into their national laws.

What is the Directive and why might it matter for my small business?

The Directive is completely changing the copyright landscape in the EU – but given the global nature of the World Wide Web, it is likely to alter business practices around the world. 

The Directive’s greatest changes are to websites with user-generated content. Such websites include not only YouTube and Facebook, but also sites like Medium and blogs and commentary sites as well. If you have a website that contains user-generated content that touches the EU in any way, you may be responsible for making sure that content does not infringe copyright laws.

Over the last several months the Directive has been heavily criticized, particularly due to Articles 15 and 17 (formerly Articles 11 and 13), respectively the so-called “link tax” clause and “upload filter” clause. Prior to the vote by parliament, protestors took to the streets of Europe, cautioning that the Directive will “censor the internet.” Meanwhile, the author of the legislation and his supporters tout it as necessary to “protect and strengthen the rights of the creatives: authors, performers, singers, songwriters, journalists . . . all copyright-holders.”

The main controversy with the Directive is with Article 17 (old Article 13), which makes “online content sharing service providers” liable for uploads of copyrighted content posted on their platforms without permission. In practice, this means that all online platforms will need to monitor all uploaded content to prevent users from posting content that could violate copyright law (a 180-degree burden shift from the current copyright laws). There is an exception to Article 17 for “quotations, criticism, reviews, parodies or pastiche” (which includes memes and gifs). 

There is also a “small business exception” from Article 17 for small platforms that host user-generated content – but it only applies if all of the following three criteria are met: 

  1.  the platform has been available for fewer than three years; 
  2. the platform has an annual turnover below €10 million; and
  3. the platform had fewer than five million unique monthly visitors.

If any one of the criteria is not met, the Directive’s requirements will essentially require online platforms to use “upload filters” for all user-generated content or face liability from copyright owners.

The second controversial part of the Directive is Article 15 (old Article 11), known as the “link tax” clause that requires web platforms to obtain a license in order to be able to link or quote news articles. In other words, publishers will be allowed to charge a web platform as a way to receive a portion of the revenue generated by such news platforms. The Directive does include an exemption for legitimate private and noncommercial uses of press publications by individual users, but it is unclear how this exception may apply, for example, to individuals with large social media networks.

If you think the Directive might apply to you, consider the following steps.

Although the Directive has a two-year implementation period, both content providers and online platforms need to start considering how the law will impact current operations and monitor how the Directive is implemented in Europe. Online platforms should consider whether they also need to seek out and arrange for filtering or other technology to scrub their platforms for infringing content in compliance with the Directive. Platforms will also want to carefully review the several exceptions noted in the Directive to fully understand if any exceptions apply and how to avoid potential liability, and may also wish to check licensing agreements to ensure all content is appropriately licensed.

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