European Commission Issues Communication on Digital Single Market

The European Commission this past week published the first in a series of documents that mark its progress toward the objective of creating a Digital Single Market for all EU member states.  The 20-page Communication, published last Wednesday, lays out a series of steps that Brussels will take over the next two years, including “[l]egislative proposals for a reform of the copyright regime” starting this calendar year.

The Communication describes two particular areas of focus within the realm of copyright.  Both reflect input from lobbyists on both sides of the issue — the media and tech industries — and show that the EC wants to examine factors that trade off the concerns of both sides.

One area of focus is a pain point for anyone trying to launch digital media businesses in Europe: the lack of cross-border licensing opportunities and content portability.  A would-be digital media distributor has, in many cases, to negotiate a separate content license in each of the countries in which it wants to operate.  This process is especially painful for startups with limited resources.  As a result, smaller countries in particular get legitimate content services years later than larger ones, if they get them at all.

This leads to a related problem: the use of geoblocking technology to confine services to single countries where it isn’t strictly necessary.  Residents of smaller countries often resort to virtual private networks (VPNs) to obtain fake IP addresses in countries in which licensed services are offered.  The EC is looking to streamline cross-border licensing and make it easier to carry services accessed on portable devices across borders; at the same time, it hopes to eliminate unnecessary geoblocking.

Cross-border licensing within Europe has been an issue for many years, certainly since I consulted to the the EC’s Media and Information Society Directorate back in mid-late 2000s.  There are two obstacles to getting such schemes enacted throughout Europe.  First is that regulators in Brussels don’t hear about it very much: the companies that can afford to send lobbyists to Brussels (and join trade associations) tend to also be able to afford enough lawyers to go around all the member states for licensing — and to benefit from existing consumer demand, because their services are already known.  In other words, startups tend to be shut out of this discussion.

The second problem is that smaller countries’ culture ministries see pan-European licensing as counterproductive.  Their jobs are to promote their countries’ local content, yet cross-border licensing often makes it easier for bigger EU member states (not to mention the US) with better-known content to license it in but not to license their content out.  The focus on reducing the use of geoblocking ought to help ameliorate this concern, because it helps consumers’ money fall into the hands of local rights holders instead of VPN operators.

The other major area of focus is to address online infringement.  The EC is looking at two particular approaches to this.  One is a “follow the money” approach to enforcement that focuses on “commercial-scale infringements,” presumably as opposed to small-scale activities by individuals.  The other is “clarifying the rules on the activities of intermediaries in relation to copyright-protected content.”  Although the language in the Communication is high-level and non-specific, the focus is not likely to drift far beyond the existing safe harbors for online service providers that arise out of the EU e-Commerce Directive, which are roughly equivalent to the DMCA in the US.

Here again, the Communication reflects tradeoffs between the concerns of the content and tech industries.  The EC wants to look at “new measures to tackle illegal content on the Internet, with due regard to their impact on the fundamental right to freedom of expression and information, such as rigorous procedures for removing illegal content while avoiding the take down of legal content[.]”  In other words, the EC probably wants to focus primarily on notice and takedown, to explore ways to resolve the tension between, on the one hand, the media industry’s concerns about overly onerous notice requirements and the lack of “takedown and staydown,” and on the other hand, online service providers’ concerns about abuse of the notice process.

The Commission expects to begin assessments of these areas this year.  This Communication is the start of a multi-year journey toward any actual changes in national laws, and the first glimpse of the parameters of those changes.  Communications are not legally binding; they lead to proposals for new laws and changes in existing laws.  The next step is one or more Directives, which are legally binding on EU member states, though member states are free to implement them in ways that make sense within their own bodies of laws — a process that itself can take several years.  Unifying several aspects of digital life in Europe through this long and complex process will be a challenge, to say the least.

One comment

  1. […] via European Commission Issues Communication on Digital Single Market | Copyright and Technology. […]

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