Media Industry Gears Up for European Copyright Battle

Brussels - H 2016
Courtesy of Getty Images

A draft proposal suggests the European Union may force networks to strike pan-European licensing deals and make Google pay for Google News.

In Europe, summer is officially over.

Pitched battles between traditional and digital media giants, copyright holders and networks are set to reignite ahead of new proposals aimed at harmonizing copyright law across the European Union.

The European Commission, the EU's executive body, will present its plans to update Europe's copyright legislation at the end of this month. But a draft proposal of the Commission's plans has already leaked and is drawing fire from all sides. Critics say it could do serious damage both to legacy media companies and internet upstarts.

The draft will be debated, and amended, by the European Parliament before being worked over by national governments. Any legislation will likely be dramatically changed before it becomes law.

Still, two proposals outlined in the draft, including changes in licensing rules for the online streaming of films, sports and TV series and a proposed tax aimed at making aggregation sites like Google News pay publishers for linking to newspaper and magazine articles online, have drawn sharp barbs from the media industry.

The licensing change is aimed at updating Europe's so-called country of origin principle laws for the online age. Under current legislation, a national network, such as Britain's BBC or RTL in Germany, only has to license content (a Hollywood film, say) for its own country. But those laws do not apply to online streaming, such as for VOD catch-up services.

The leaked draft suggests the Commission is looking to push for pan-European online licenses, allowing networks to acquire films and series for all 28 countries in the EU. Commercial channels argue that pan-European deals would leave a major dent in their business model, which relies on exclusivity and territory-by-territory licensing. Earlier this summer, executives from 15 commercial TV companies, including Britain's ITV and Sky, France’s Canal Plus and RTL in Germany warned that the changes would have a “chilling effect on content investment” across the continent.

The European Commission is currently investigating film licensing deals between Sky and the six Hollywood majors on charges that they violate EU antitrust laws. Alone among the studios, Viacom's Paramount Pictures has reached a deal with the Commission.

Another section of the draft proposal focuses on news publishers and on getting aggregate sites like Google News to pay when they link to original articles on European newspaper websites. It's an idea — introducing a so-called ancillary copyright for journalistic work — that was tried, and failed, on a national level in both Germany and Spain.

The proposal would give newspaper and other journalistic writings a 20-year online copyright and require online aggregators to acquire a license from the copyright holder before posting even a couple of sentences from the article text.

Germany and Spain both introduced similar laws in an attempt to generate more revenue for traditional publishers, who accused Google News of freeloading off their content. But in both countries, the law had the opposite of the effect intended. Google complied with the legislation, leading to a sharp drop in traffic to traditional news sites. In Germany, publishers relented and granted Google a temporary free license to use article snippets. In Spain, where free licenses were not allowed, Google News simply shut down in the country and traffic for Spanish news sites fell dramatically.

“The European Parliament has consistently warned against introducing such a broad and ill-defined right,” said Marietje Schaake, a Dutch member of the European Parliament, in a blog post in response to the draft proposal. “While I am concerned about journalism, more copyright enforcement will not help publishers, and instead hurts internet users. If implemented, the draft would effectively end the internet as we know it.”

Georg Szalai contributed to this report.