EC Copyright Reform Proposals Spark Concerns Over Portability, News Aggregation

Cross-border portability of digital content and a possible "snippet tax" on news aggregators are part of a proposed European Commission copyright reform package raising concerns among stakeholders, they told us last week. The proposal includes a regulation to allow those who subscribe to Internet content services in their home countries to access them when they travel in Europe, and a communication setting out a vision for a modernized European copyright regime. The package represents the first move toward a digital single market, with other legislative and policy proposals to follow, the EC said.

Europeans traveling within the EU now may be cut off from online services offering films, sports broadcasts, music, e-books or games they paid for at home, the EC said. The proposed regulation would allow them to access those services abroad, starting in 2017, the same year mobile roaming charges are due to end, it said.

The entertainment industry is "very supportive of portability for consumers," said Wiggin (Brussels) attorney Ted Shapiro. Many online content services are already portable or partially portable, he said. But the industry "is likely much less excited" about the proposed regulation, he said. The draft, which is "based on a legal fiction designed to chip away at the concept of copyright territoriality," would mandate portability but seems to lack the necessary legal hooks for effective authentication of users, a reasonable approach to the concept of temporary access, and a long enough transition period to allow industry to adapt (the draft calls for six months), he said. "Further clarity will likely be introduced during the legislative process to safeguard the financing models which underpin the production of culturally-diverse content in the EU," said Shapiro, former European general counsel for the Motion Picture Association.

Whether cross-border portability is a good thing will depend on whether this is just a "back door" to complete transborder access and an end to territoriality, said K&L Gates (Brussels) public policy and law attorney Ignasi Guardans. Ending territoriality would disrupt current business models and kill funding of Europe's content industry without replacing it with something else, he said. If portability is temporary, it's not a problem, but the EC will have to better define "temporary," he said.

Others voiced guarded support for cross-border content portability. It "goes in the right direction" but lacks ambition, said French citizens' advocacy group La Quadrature du Net. It fails to address the real issues of accessing content in different countries, including geoblocking and digital rights management, the organization said. The concept of portability is good but its ultimate benefits will depend on the duration and conditions of access to subscribers' content, telecom consultant Innocenzo Genna blogged. "The proposal of the Commission is intentionally vague because this item will [present] a battle field when discussing with the Council and European Parliament," wrote Genna, who advises smaller players.

The copyright communication offers a "political preview" that will be translated into legislative proposals and policy initiatives in the next six months, the EC said. It noted "growing concern" about whether current EU copyright rules ensure the value generated by some of the new forms of online content distribution is fairly shared. Discussion centers on some online platforms and aggregation services, but the issue is likely to arise for all online activities involving the commercial reuse or retransmission of copyright-protected content, it said. The EC "is reflecting and consulting" on sharing the value created by new forms on online distribution of copyrighted works among the different market players and will consider measures in the spring, it said: The body will "consider whether any action specific to news aggregators is needed."

The focus on news aggregators is an attempt to introduce a "snippets tax" system that has been adopted in Germany and Spain but doesn't work, said Computer and Communications Industry Association Europe Associate Director Jakob Kucharczyk in an interview. Google, Yahoo and other news aggregators have stopped displaying snippets in those countries because they don't want to pay royalties, he said. Now, the concept has made it into the copyright communication, he said. CCIA's website said members include those companies.

CCIA believes news aggregation is valuable to the publishing industry because it helps route users to content they want, Kucharczyk said. The EC text is a negative development, and more will be known about the text in coming months, he said. The copyright communication could set the scene for a flawed approach that has been opposed by the European Parliament and many news publishers, he said.

The battle over aggregation arises from the different national interpretations of the EU copyright directive that don't harmonize the responsibilities of those who only gather news stories, Guardans said. The EC wants to clarify the situation but it's hard to know now whether what it will put on the table will be acceptable, he said. The prevailing view, backed by the European Court of Justice, is that aggregation isn't covered by copyright law, he said. The issue is whether an aggregator is benefiting its own business by using content produced by others or simply linking to creators' own websites at no real advantage to itself, he said. The EC's "intention to sort it out is generally well-accepted," but without a legal text it's unclear how it will do so, Guardans added.