The EU's new copyright reforms could change the internet

A European Union flag with a hole cut in the middle flies at half-mast outside a home in Knutsford, England, after the historic Brexit referendum, June 24, 2016. (Photo: Christopher Furlong/Getty Images)
The EU wants to change some fundamental ways the Internet functions. (Photo: Christopher Furlong/Getty Images)

Some of the European Union’s leaders think they’ve come up with a two new way to boost the continent’s digital economy: let newspapers bill search engines like Google and Yahoo (Finance’s parent company) for showing snippets of news stories, and get video sites to make sure their users don’t uploaded copyrighted content.

Making digital companies prop up analog firms may not seem like a particularly sound strategy, but it’s a key part of the proposed copyright reforms the EU’s European Commission released on Wednesday—some of which are not particularly objectionable and aim to solve actual problems in the market.

The fact that these ideas have flopped before doesn’t seem to have discouraged the EC. And you shouldn’t be too surprised if a vote by the European Parliament to adopt them encourages Big Copyright’s lobbyists in the US to demand similar measures here.

A screening at video and other sites

The first bone the EC’s Copyright Directive throws to copyright holders is a requirement that sites hosting content submitted by their users adopt systems to scan for and reject copyrighted material. That represents a major shift from current law in Europe, which requires sites to take down infringing material when a copyright holder notifies it of the offense and, in return, frees them from being held liable for what their users post.

The US has a similar system in place, and it’s allowed the entire category of “user-generated content” sites to flourish. Without it, you’d have no Twitter (TWTR), no Facebook (FB), no Instagram, no YouTube—establishing this regime ranks as one of the most important accomplishments of the Telecommunications Act of 1996.

The EC now proposes to flip this around by requiring sites to police their users upfront. That’s not impossible—YouTube’s Content ID does this and allows copyright holders to choose between having a video taken down or taking a cut of the ad revenue that clip generates—but it is difficult for sites without the resources of a Google (GOOG) behind them to write code to match short video samples against an enormous library of copyrighted content.

The commission’s proposal would exempt smaller sites but doesn’t specify a threshold. The full text of the proposed Directive only says that this requirement would apply to sites that host “large amounts of works.” What is clear about this: Life for any EU user-generated-content startups proposing to compete with the likes of Google will get a lot harder when they have to budget for taking on copyright-cop duties at some point.

Get ready for a snippet tax

The commission’s other bad idea aims to protect the press by allowing publishers to stop search sites from showing one- or two-sentence summaries of their stories unless those sites license such summaries and, presumably, pay for them.

Well, I’ve seen this movie before, and I know how it ends. It ignores the reality that Google News and other search sites send people to news sites—and since Google News doesn’t include any ads of its own, the exchange of value is already tilted in publishers’ direction.

But if publishers really don’t want Google’s help (maybe they feel that a reader who would be satisfied with a one-sentence summary of a story can somehow be motivated to perform the extra effort of searching for it on their own sites?), they can already refuse that assistance by editing a standard file on their sites to block Google or any other search engine from indexing their content.

Past attempts by news publishers to demand royalties from Google and others have flopped when search sites balked and publishers relented. In the most dramatic case, Spain passed a law in 2013 requiring such payments, with no option for news sites to waive them—and Google responded by essentially firing the country, in the form of closing the Spanish version of Google News.

Google remains unconvinced on snippet taxes. A post on its European-policy blog declared that “paying to display snippets is not a viable option for anyone.”

Meanwhile, the EC’s proposal says nothing about the massive and growing amounts of traffic sent to news sites from social-media sites like Facebook—which already influences news consumption enough to make journalists worry about its leverage.

One longtime critic of European copyright overreach, Pirate Party European Parliament member Julia Reda, said this is best read as an attempt by established media outlets to protect their own market share.

“The positive effects of social media and search on reaching new audiences are more pronounced for smaller, less well-known news outlets than for the largest ones,” Reda wrote in an e-mail. “It’s a dangerous game for them, though, because there are plenty of publishers who oppose this law.”

It can happen here too

From a chair in the States, it can be tempting to make fun of those silly Europeans and their odd fondness for making up new kinds of intellectual-property rights — like the “right to be forgotten” rule, which requires search engines to scrub their results to hide old or embarrassing results of a EU resident who’s not a public figure and files such a request.

But intellectual-property overreach is not just a European sport. It happens in the US too, most recently when a federal court decided that an incredibly common form of software development infringed on a property right that had never before been recognized. Meanwhile, the Recording Industry Association of America is already campaigning to change US copyright law, saying it’s too weak in protecting musicians and too soft on the likes of Google.

So if the European Parliament goes ahead with the EC’s proposals, you can expect calls to make them our newest import from Europe.

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