Reed Smith Client Alerts

After years of lobbying, fraught negotiations and even public demonstrations in European cities, the new EU Copyright Directive was passed by the European Parliament on 26 March 2019. Once it has been formally approved, EU member states will have 24 months to implement it into national legislation.

The Directive includes a number of meaningful changes to the way copyright will be regulated and exploited in a digital environment. The fiercest debate and controversy has been reserved for article 17 (previously known as article 13) and its plans to address the so-called ‘value gap’ between the revenues that online content-sharing platforms generate from enabling users to upload and consume copyright-protected works and the value returned to rightsholders. Depending on your viewpoint, article 17 might save the music industry or destroy the internet (especially memes). As ever, the reality is probably somewhere in between

Authors: Sophie Goossens

On 26 March 2019 the European Parliament voted in favour of the new EU Copyright Directive (the Directive), bringing an end to years of lobbying and negotiations, a series of delays and uncertainty about whether the day would ever arrive. The Directive contains a number of significant updates to copyright law that will likely have a major impact on the way that content is created, exploited and consumed in the digital world. For now, we will focus on arguably the most controversial aspect of the Directive – article 17 (more commonly known as article 13 but which became article 17 due to the updated numbering in the final text).

What is article 17 about and why is it controversial?

Currently, online platforms can benefit from the ‘hosting’ exemption provided by article 14 of the Directive of Electronic Commerce 2000/31/EC (E-Commerce Directive), whereby they can avoid liability arising from the content that they host (e.g., for copyright infringement), provided that they do not have knowledge of the infringing content or, upon gaining knowledge, act expeditiously to remove or disable access to it. This is similar to the position and requirements of the Digital Millennium Copyright Act in the United States and has led to the so-called ‘notice and take-down’ policies used by many online platforms.

However, that regime dates back to 2001 – a world before YouTube even existed – and rightsholders in the music and other creative industries have long argued that it is no longer fit for purpose in today’s digital age. Their complaints focus on a so-called ‘value gap’; that is the perception that online content-sharing platforms derive unreasonable value from enabling their users to make available and access copyright-protected works, without having obtained prior permission from the underlying rightsholders of those works and without having to monitor the re-upload of infringing content after a take-down notice has been filed. Article 17 seeks to address this supposed imbalance but critics have argued that it threatens to “break the internet”.