The politics behind the proposed copyright directive

Last week we talked about the agreed text of the new copyright directive, particularly the problems presented by Article 13. Perhaps what is lost in all of the discussion is precisely why such a toxic proposal is being discussed and where does it come from.

It is impossible to understand the current situation without understanding the existing regime that regulates the behaviour of users and service providers online. While there is a rich history behind this, the general idea is that platforms have a limited immunity from liability of acts committed by their users as long as they are not aware that a possible actionable situation is taking place. So if I defame someone on YouTube comments, or if I upload an infringing image to Facebook, the service providers will not be liable for my actions as long as they are not aware that this took place. As soon as they are notified, they could become liable.

This system has worked for almost two decades, and has allowed tech companies big and small to be able to operate with relative certainty that they will not be sued out of existence, but it has also allowed a weird and wonderful ecology of user generated content to develop. The system is not perfect, but for the most part it has served both users and the platform operators well.

But not everyone is content with the status quo, almost from the start content owners have complained that the system allows intermediaries to profit from rampant copyright infringement committed by users, and it has given those platforms disproportionate power and money, while creators do not get a fair share of these profits. Behind this narrative are quite a few interesting assumptions that seem to be conflated in the discussion. Proponents of a change in the intermediary liability model argue that copyright infringement is widespread online, and that the platforms are profiting from such practices. At the same time, they argue that whenever there are legal services being developed, the power accrued by tech giants makes it impossible to get proper earnings (the so-called value gap).

So we have quite an interesting situation in which these two get conflated over and over, but also they get deployed by the copyright owners and their proponents interchangeably, and are both used as an excuse for the proposal of Article 13 and the deployment of upload filters. So in the recitals for the new directive, we get actually both justifications. Most telling is Recital 37, which repeats the problems caused by the rampant infringement of copyright by the users of those platforms, and then states almost seamlessly that a licensing system will be put in place to allow creators to get a fair share of money.

So the proposed system is quite a clever political exercise where piracy is being used to justify the creation of filtering mechanisms, but the objective is not to deploy filtering, the whole reason of the exercise is to force platforms to enter into licensing agreements with copyright owners, or they will be deemed to be directly liable for the infringement committed by their users. They are using the spectre of piracy (which by all accounts is falling across the board) to justify the deployment of a system that will force tech giants to share some of their profits to creators. Filtering is not the desired result, it is the stick used to gain compliance.

“Nice Internet you have there, it would be a shame if something were to happen to it.”

It’s a clever game of switcheroo, but it represents a huge gamble. The proponents of Article 13 are hoping that the threat of direct liability and the prospect of having to deploy expensive filters will force tech giants to the negotiating table, and they will comply by giving large sums of money in licensing fees to maintain the status quo. But the result could be very different to what is desired.

I suspect that a few companies like Google and Facebook will deploy filtering and will refuse to pay licensing fees, after all, these companies already possess some monitoring capabilities. A second tier of large companies with no filters may make an investment. The third tier, smaller and medium companies that fall under the proposal, will just abandon European markets altogether.

But my prediction is that nobody will pay licensing fees because that way madness lies.