On Tuesday this week the participants of the stakeholder dialogue on Article 17 of the EU copyright directive convened in Brussels for the second meeting. After a first meeting that focussed on practices in the music, games and software sectors (see our report here), this week’s meeting focussed on the current situation in the audiovisual (AV) and publishing sectors.

Hollywood: Article 17 is about filtering after all

The meeting kicked off with a long series of statements from the many different rightholders in the AV sector (see the video recording here). The assembled sector representatives made it clear that from their perspective Article 17 is welcome (as it clarifies that online platforms need to obtain licenses for the works uploaded by their users) but that they are not interested in widely licensing AV works to UGC platforms and would instead focus on the blocking and removing of unlicensed content via the upload filtering mechanisms introduced by Article 17.

This approach is the logical consequence of the predominant business model in the AV sector which relies on exclusive licensing to selected outlets (Cinema, TV, VOD platforms). It directly contradicts the music industries’ narrative from the first meeting that Article 17 is about licensing and not about blocking access – as in the case of music general availability is crucial. Representatives of the AV industry made it very clear that they would fight any attempts at non-voluntary licensing and that they would also fight against effective protection for user rights under exceptions and licensing (see for example the statement issued by the Motion Picture Association starting at 10:41:44 of the video recording). These initial statements make it clear that the AV industry does indeed look at Article 17 as an instrument to limit freedom of expression and reuse and will likely use the stakeholder dialogue to bend the article further in this direction.

It is worth noting that there were a few voices from the AV sector representing individual creators such as actors and screenwriters who made less one-sided interventions and stressed the need for individual creators to obtain fair remuneration for the use of their works by platforms. It remains to be seen in how far these legitimate voices manage to evade being drowned out by the rhetoric of industry.

Will you please start licensing our content?

After the AV industry, the representatives of journalists, visual artists, photographers, authors, publishers and press publishers (who used the majority of their speaking time to complain about the fact that Google and Facebook had decided to simply ignore their rights under the French implementation of the press publishers right) had their turn. The common theme throughout these interventions were expressions of frustration that the dominant platforms so far have not shown any interest in licensing their content and expressions of hope that Article 17 would change this. If this will indeed happen seems highly dubious, and representatives from the platform operators tried very hard not to make any commitments in this regard.

This part of the meeting underlined the fact that Article 17 leaves the fundamental power imbalances between the different stakeholders largely unchanged. In order for rightholders from these sectors to be paid for uses of their works by the platforms (which in itself is a perfectly legitimate objective) there is a clear need for strong collective licensing mechanisms that cannot be ignored by the platforms. However, such licensing solutions will need to be carefully balanced to ensure that they do not affect the vast majority of works that are voluntarily shared by creators who do not expect any monetary reward for their acts of sharing.

During the subsequent interventions from platforms, the big platforms tried to say as little as possible while a number of newly invited representatives from smaller platforms (animexx and seznam.cz) made it clear that the technological and regulatory burden created by Article 17 will endanger their ability to continue operations. As we have argued before, there is indeed a high risk that Article 17 will drive EU based smaller platforms out of business, while it further entrances the position of the dominant US based platforms. One way to prevent this outcome would be to use the stakeholder dialogue to agree on a targeted definition of the affected platforms.

State of play after two days

After the end of the second meeting we now have a clear picture of the state of play. On the right holder side there are at least 4 different camps that have widely diverging expectations towards the Article 17:

The Music industry is broadly interested in using Article 17 as leverage to get licensing deals from platforms that are more favourable than the licensing deals that they currently have in place. Given the importance of music on most UGC platforms it seems likely that they will achieve this objective.

The AV industry is looking at Article 17 mainly as an incentive for platforms to better comply with their wishes to block and take down content. The stakeholder dialogue will be crucial in developing guidelines that effectively protect user rights against the unchecked desire of AV rightholders to keep its content off the open internet.

Rightholders in the print and visual arts sectors look at Article 17 as leverage to finally stop platforms from ignoring their pleas to obtain licenses for their works that users upload to the platforms. Their best bet to achieve this goal will be strong forms of collective licensing.

In the context of Article 17 individual creators contributing to these industries are looking for means to establish their own remuneration claims towards platforms. For them to benefit from Article 17 collective licensing mechanisms will be essential as well.

On the side of the platforms the picture is less clear. The dominant platforms such as YouTube and Facebook have so far tried to keep their cards close to their chests and it is largely unclear how they see their interactions with rightholders once Article 17 is in place. So far their interventions give the impression that they do not see a need to substantially change their practices.

What has become clear is that smaller platforms and platforms dealing with lots of different types of rights will be struggling with the regulatory and technological burdens imposed on them by Article 17. Smaller platforms will benefit most from being excluded from the scope of Article 17 by tightening the definition of the affected platforms. Where they do fall within the definition, ubiquitous collective licensing mechanisms will be essential for enabling them to operate.

The users’ perspective

The first two meetings of the stakeholder dialogue have largely skirted around the key concern for users: how to ensure that the filtering infrastructures that will be created to comply with article 17 can effectively safeguard users rights? The Commission has indicated that this topic will be on the agenda in the third phase of the dialogue that will commence in mid December.

While the discussions about licensing that we have seen so far are not directly affecting users, it seems clear that it will be much easier to safeguard users rights in implementation scenarios that put an emphasis on (collective) licensing than in the “filternet” scenario favoured by the big AV rightholders.

Given this, it will be important to work towards licensing solutions that ensure broad availability of content on online platforms thereby minimising the need for upload filters. The first two meetings of the stakeholder dialogue have shown that this is an objective where the interests of users overlap with those of some parts of the right holder community. Hopefully the next rounds of the stakeholder dialogue will allow us to build on this overlap of interests.