Documents considered by the Committee on 27 March 2019 Contents

1Copyright in the Digital Single Market

Committee’s assessment

Legally and politically important

Committee’s decision

Not cleared from scrutiny; further information requested; but scrutiny waiver granted; drawn to the attention of Business, Energy and Industrial Strategy, Digital Culture Media and Sport, Science and Technology Committees

Document details

Proposal for a Directive on Copyright in the Digital Single Market

Legal base

Article 114; ordinary legislative procedure; QMV

Department

Business, Energy and Industrial Strategy

Document Number

(38076), 12254/16 + ADDs 1–4, COM(16) 593

Summary and Committee’s conclusions

1.1This Directive forms part of the Commission’s “Copyright in the Digital Single Market” package of September 2016. Its broad range of measures was summarised in the first Report on this matter to our predecessor Committee, referenced at the end of this Chapter.

1.2The Minister of State for Universities, Science, Research and Innovation (Chris Skidmore MP) writes to update the Committee on the progress of the proposal. The Minister explains that there are some reservations about whether the provisions in the negotiated text on addressing the value gap meet the Government’s policy objectives. He further states that the other aspects of the Directive are now in line with the UK’s negotiating objectives. On that basis, and as a result of the flexibility that has been achieved in terms of how the Directive would be implemented, the Minister states that he is “confident that the final agreement will meet a successful balance between the needs of copyright owners, online service providers and consumers”. On that basis, he requests final scrutiny clearance from the Committee.

1.3The proposal has been subject to a relatively lengthy trilogue process. The Minister explains that the most controversial provens have been those relating to the introduction of a new press publishers’ right (Art 11) and to addressing the value gap (where content is shared on internet platforms) (Art 13 (Art 17 of the negotiated proposal)).

1.4The Minister sets out that the Government agreed a number of negotiating principles including that: copyright reform should be balanced and proportionate and that interventions should be clear, targeted and justified by evidence. Policy aims included clarifying the obligations of and responsibilities on online services and to ensure they take appropriate action to remove copyright-infringing content; and foster greater cooperation between rights holders and online services.

Press publishers Right

1.5Article 11 introduces a new right for press publishers, which applies to the online use of press publications by information society service providers (ISSPs) but not to private or non-commercial uses of press publications carried out by individual users. This includes a provision that Member States must provide for authors to receive an appropriate share of additional revenues that press publishers receive for the use of their press publications by ISSPs. It would allow the use of individual words or very short extracts by ISSPs. However, the Minister notes that the mechanism for how this will work in practice is not clear and “may require further judicial interpretation”. The Minister further states that he considers that this aspect of the negotiations have been successful from the UK’s perspective.

1.6We note the potential lack of clarity in the practical operation of the provision and would appreciate further information from the Minister on what he considers the focus of any “judicial interpretation” would be.

Value Gap

1.7The Minister explains that the Article 13 (now Article 17) provisions on the value gap were the most difficult element of the negotiations, with negotiations temporarily suspended in January due to conflicting positions between Member States. The negotiated text seeks to strike an appropriate balance for how obligations are placed on user-uploaded content sharing services.

1.8The provisions clarify that online content sharing service providers may, in certain circumstances, communicate or make works available to the public, and will be liable for these acts if performed without permission of the rightholder. This liability may, however, be mitigated by taking a series of steps, the first of which being to make best efforts to obtain an authorisation. The Minister explains that the Government was very supportive of this approach.

1.9Where neither the rightholder nor the platform wishes to enter into a licensing agreement, service providers must make best efforts to prevent the availability of unauthorised works by adhering to “high industry standards of professional diligence”. The Minister explains that this would require removal of content in a one-off instance (notice and takedown); and an obligation to remove future instances of the same content (notice and stay-down). There is a carve out for micro and small platforms (those operating for less than three years; with a turnover of less than ten million Euros and under five million unique yearly visitors) which would not need to comply with the notice and stay-down provisions. Given the reference to industry standards, we would welcome further explanation from the Government of what those standards would be in the UK.

1.10The negotiated text’s position on user generated content (UGC) has changed, now requiring Member States to ensure users can rely on exceptions and limitations with uploading UGC. The negotiated position has a narrower approach to this as compared with previous drafts, which the Minister explains will be welcomed by rightsholders who were concerned about a potential reduction in licensing opportunities if the exceptions had been more broadly framed. The Minister states that he is strongly supportive of these elements.

1.11The Minister does however also note some “less welcome” additions to the negotiated text. He notes that the Article is “not as clear as is desirable” and that SME platforms may remain unclear which obligations apply to them. He notes that SMEs have also argued that they could act as a barrier to investment. The Minister also notes that parts of the music and audiovisual sectors have expressed concern that the provisions may harm the creative economy. While highlighting these concerns the Minister appears to suggest that the requirement for the Commission to work with Member States to provide best practice guidance, will address some of the uncertainties.

1.12We note that since the date of the Minister’s letter, the European Parliament has published amendments proposed by the political groups to this Article, which include various suggestions to delete or amend it.

Other provisions

1.13The Minister explains that provisions on fair and proportionate remuneration for authors and performers, and a right for authors and performers to revoke rights granted to third parties, have been incorporated. He notes that the UK did not support these additions because they were not founded on an impact assessment but does not believe that they are contrary to the UK’s negotiating principles and considers that there is sufficient flexibility to allow the UK to ensure any new provisions complement existing UK legislation.

1.14The Minister explains that the Directive has a 24 month period for transposition. He provides no further assessment of how the UK would engage with the proposed Directive, if passed, in the context of the UK’s withdrawal from the EU.

1.15The Minister states that he is confident that the final agreement will meet a successful balance between the needs of copyright owners, online service providers and consumers. It is in that context that he seeks scrutiny clearance.

1.16We thank the Minister for his detailed update and for setting out the key issues relating to this Directive so clearly. We also thank him for the clear request to clear the measure from scrutiny but we decline to do so at this stage.

1.17We note that the passage of this proposed Directive has, to date, been relatively lengthy and contentious. We also note that amendments are proposed to the vote in the European Parliament that are due to take place in the week commencing 25 March. In this context we are happy to provide a scrutiny waiver to allow the Government to vote in favour of the proposal, should it come to a vote in Council unamended. However it appears possible that the proposal will be amended when voted on by the European Parliament. If it is amended we ask the Minister to provide the Committee with an update on any amendments made and a further assessment of whether the Government would support these amendments.

1.18The Minister has noted that in the press publishers right, the proposed Directive is not sufficiently clear and could require judicial interpretation. We ask the Minister to provide further details on what he considers the focus of any judicial interpretation would be and whether he considers there are any particular risks for different stakeholders in the UK.

1.19We also ask the Minister to provide an indication of the approach that the UK would take to adopting voluntarily in UK law the provisions of this proposed Directive if the 24 month transposition period were to conclude after the end of any implementation period (according to the terms of the draft UK/EU Withdrawal Agreement, if ratified). Finally, we ask the Minister to indicate what, if any, the implications of the proposed Directive would be for the UK as a third country rather than as a Member State of the EU.

1.20We request clarification on the above points by the end of April 2019.

1.21We draw this chapter and this document to the attention of Business, Energy and Industrial Strategy, Digital Culture Media and Sport, Science and Technology Committees.

Full details of the documents

Proposal for a Directive of the European Parliament and of the Council on Copyright in the Digital Single Market: (38076), 12254/16 + ADDs 1–4, COM(16) 593.

Previous Committee Reports

Seventeenth Report HC 71–xv (2016–17), chapter 5 (2 November 2016); Thirtieth Report HC 301–xxix (2017–19), chapter 2 (6 June 2018).





Published: 2 April