Music Industry Bosses Decry 'Missed Opportunity' As European Union Rejects Copyright Bill

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It had been described as a ‘must-win’ vote for the creative industries, but it is the tech community that is celebrating after members of the European Parliament rejected new copyright legislation that, if passed, would have carried big implications for how YouTube operates.

The EU’s Copyright Directive had been provisionally approved by the European Parliament's Legal Affairs Committee June 20, but a plenary vote today (July 5) in Strasbourg saw the bill narrowly defeated, 318 votes to 278 votes, with 31 abstentions.

The directive, which would have forced user-generated content services like YouTube to obtain music licenses -- effectively ending safe harbor provisions in Europe -- will now be debated and likely amended before parliamentarians meet for a second plenary vote in September.

“Today is a great disappointment for millions of creators who have campaigned for years for the right to fair treatment and fair payment from giant internet platforms,” CISAC president Jean Michel Jarre said following the vote, which had been preceded by fierce lobbying from both the creative and tech sectors.

Yesterday, Sir Paul McCartney, via IFPI, published an open letter urging members of the European Parliament to back the EU’s proposed copyright reforms. All three major labels, dozens of European music bodies and thousands of artists, songwriters and rights holders have also backed the campaign, which they say would address the so-called value gap -- the difference between what free user-upload sites and subscription services pay creators for using their music.

However, critics of the EU’s plans argue that they will they restrict freedoms online and could put an end to memes, remixes and other user-generated content by forcing UGC platforms to put in place automatic content-recognition filters to prevent copyright infringement. Equally contentious is Article 11 of the copyright directive, or "link tax," as it has been dubbed by opponents, which would require online platforms like Google and Facebook to pay a publisher fee if they link to external news content.

The draft directive also contains provisions for improving transparency in royalty accounting to performers and rights holders, as well as proposals for making contracts and payments fairer in the digital world.

In the build up to the vote, which forms part of the EU’s long-in-the-works Digital Single Market strategy, there has been sustained and fierce lobbying from both the creative and tech sectors. According to figures compiled by umbrella organization UK Music using the European Union's Lobbying Transparency Register, YouTube owner Google spent more than €31 million ($36 million) in 2016 to try and influence policy decisions. The EU register does not report how much Google spent on direct lobbying in 2017 or the first half of this year.   

Reacting to the European Parliament’s rejection of the bill, CISAC director general Gadi Oron called it “a missed opportunity to fix one of the biggest problems in today’s digital market. It leaves an unfair situation in which the value of creative works, instead of benefiting their creators, is being used to enrich global technology platforms.”

His words were echoed across the European music business, with Dr. Harald Heker, CEO of German collection society GEMA, saying, “today is a bad day for Europe’s culture and creative industries. The decision of the European Parliament weakens the position of all creators. An unprecedented disinformation campaign has caused confusion and torn down the cultural value system.”

Dr. Florian Drücke, CEO of the association of the German Music industry (BVMI), also showed great disappointment. “Today is not a good day for the whole creative industry," he said. "It is very regrettable and irritating that the stoking of fears through big campaigns by the opponents of the reform have succeeded. The digital platforms have always refused to be confronted with basic legal conditions.”

"Yet again the tech industry has used its considerable political influence to deny creators and rights owners a fair share of the enormous riches that they derive from their businesses," stated Musicians' Union general secretary Horace Trubridge. "These multi-billion pound companies would have nothing to offer their customers and users were it not for the efforts of musicians, songwriters and producers, yet they are allowed to continue to deny the creative community their rightful share. The fight goes on and we will redouble our efforts to convince the legislators they must act to bring an end to this appalling injustice,” he raged. 

PRS for Music’s chief executive Robert Ashcroft struck a more measured tone, noting it was “perhaps unsurprising considering the unprecedented level of lobbying and the comprehensive campaign of misinformation which has accompanied this vote that MEPs want more time to consider the proposals.

“The vote showed that many MEPs across the various European political parties understand the importance of fixing the transfer of value and of a well-functioning market for copyright,” he stated, vowing to “continue to fight for what we believe is their freedom and a fair use of their creative works.”

"These proposals would make a real difference to our creators, to those that invest in them and to all of us who value our culture," said UK Music chief executive Michael Dugher, slamming Google as "the vultures that feed off music creators." He added, "We may have lost this particular round, but the fight to ensure fairness for music creators goes on.”

“This vote is a setback but it is not the end,” reflected David El Seyagh, secretary general of French authors’ rights society SACEM. “We will not be discouraged by today’s decision and will continue to mobilize the support of musicians and music lovers across the world, in the hopes of reaching a fair agreement with these platforms that will safeguard the future of the music industry.”

Additional reporting by Wolfgang Spahr.