Germany’s non-paper on art. 13 screams “Houston, we have a problem”

This week has shared a “non-paper” prepared by the German Council delegation on article 13, ahead of the Council Copyright Attachés meeting that took place on Wednesday. In this paper Germany proposes to mitigate the negative effects of art. 13 by 1) exempting platforms with a turnover of up to 20 Mio. Euros per year from the obligations imposed by art. 13., 2) exempting platforms from liability in certain situations (e.g. if they made best efforts to obtain an authorization from the rightsholders), and 3) introducing a mandatory EU-wide user-generated content exception to copyright, subject to the payment of a fair remuneration to the rightsholders.

A Christmas tale

It is clear that there is a social legitimacy problem with a law proposal when, in every household visited during the Christmas holidays, someone starts talking about it. Children as young as eleven, teenagers and parents all knew about the existence of an infamous law proposal, which they referred to as “Article 13”. The familiarity with which they pronounced the number of the article was such that an undiscerning observer would believe they had been closely following the copyright reform and had actually read the European Commission’s proposal on upload filters.

Sure enough the children and the teenagers had not read the legal provision, neither had their parents. Their knowledge was based on the Youtube videos on art. 13 produced by their favourite Youtubers and/or on the newspaper articles that (finally) had started reporting on the issue, after those videos had become viral (one has now close to 5 million views).

This was the rule for every household, except one, where one of the parents – let’s call him a software and platforms entrepreneur – had not only read the proposal, but could easily point out the flaws on the lawmakers reasoning.

The worried entrepreneur started ranting about how little the lawmakers knew about filtering technology and the functioning of the platforms, and how disconnected their faith in technology was with the reality of technology. Did they really believe that technology could filter content the way they intended to be filtered? Did they really think that the companies had the capacity and the financial resources to devise that technology? Were they so delusional that they could not see that the companies would rather operate outside of Europe than invest into complying with the new law? Couldn’t they see that these obligations would bring EU businesses back to the pre-Web 2.0 era, because they would rather have none or less content uploaded by users than to engage in burdensome processes of asking permission to the concerned rightsholders? And last but not the least how could he prepare his company for it: is it enough to block EU citizens from using my platform, should I move my servers and my company elsewhere?

None of the good intents of the lawmakers could be used to argue against these valid questions (and save article 13 from being a terrible law proposal), so the conversation ended with the entrepreneur asking when the next elections to the EU Parliament would be held.

The German efforts

The proposal by the German delegation to mitigate the negative impact of article 13 on EU businesses, on platforms and on users in general sounds like the start of what could be a general awakening for the unintended consequences (and the political impact) that article 13 could have in Europe. The efforts deserve recognition, namely the attempt to introduce a user-generated content exception. However, we cannot fully approve it, since it fails once more to understand what can be reasonably expected from platforms.

We have been arguing for a long time now that, if the EU legislator comes to the conclusion that the existing rules that apply to platforms should be modified, then it needs to provide a clear positive definition of the rights available to those individuals that are everyday creators or creators-turned-into-platform-users. And it needs to do that by introducing a mandatory exception to copyright that allows users to do noncommercial transformative uses of copyrighted works and share them on online platforms (aka a UGC exception).

Neither the Commission proposal nor the Council text proposed a UGC exception. But during the discussions at the Parliament there were several proposals (from CULT and IMCO and from several individual MEPs) to include a UGC exception. Despite the many calls to the Parliament – made by experts and activists, including us – to approve these proposals, the UGC exception did not made it into the Parliament text.

The proposal by the German delegation to introduce a UGC exception could bring the topic back to the negotiating table, and as we said that’s a good start. However, the proposal to permit “users that act for non-commercial purposes uploading and making available content that they have produced themselves, where it includes, in whole or in part, existing protected works and subject matter for purposes such as  illustration, criticism, review, caricature, parody or pastiche” is subject to the payment of a fair remuneration to the rightsholders. We cannot even attempt to justify the payment of a remuneration for uses that are based on fundamental freedoms. Even if a reasonable justification for such payment existed, we also wonder how could that work, considering the overlap of unremunerated exceptions applicable to those uses.

Paying for freedom of expression

It is difficult to justify a payment condition for uses made under a copyright exception when the uses have a transformative nature, no commercial intent and are for purposes such as illustration, criticism, review, caricature, parody or pastiche. That’s why the quotation exception is not subject to remuneration in any country of the world, and as far as we are aware neither is the parody exception in countries that have it.

The rationale behind the quotation, parody and user-generated content exceptions is exactly the same: freedom of expression and freedom of creation. That’s probably why none of the previous proposals to introduce an UGC exception required the payment of a remuneration to the rightsholders.

But let’s imagine that one could overcome that fundamental obstacle and accept to subject the uses made under the UGC exception to payment. One would still need to ask the following questions: is it fair to pay for all uses made under the UGC exception, regardless of the amount of the copyrighted work used? Should one pay for e.g. a meme? And should one pay for the meme even if the meme is simultaneous protected under the remunerated UGC exception and other unremunerated exceptions, such as the quotation and parody exceptions? Finally, who would pay for it: the users or the platforms?

The German Delegation says that it is up for the platforms to pay for this proposed remuneration, because they are the ones that “ultimately profit economically from the use of (copyrighted) content by its users”. We say that saying this is not understanding the value, including economical value, the platforms have to users, and it means the lawmakers continue to have unrealistic expectations of the platforms’ behaviour if faced with these complex legal frameworks.

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