Article 13, YouTube and What's Really Going on in Brussels (Column)

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For a small but committed band of activists strongly opposed to copyright reform, Jan. 19 was supposed to be a day of protest across Europe.

Uniting under the slogan #StopACTA2 -- a reference to the Anti-Counterfeiting Trade Agreement that was defeated in 2012 -- and backed by numerous open rights groups, demonstrations were scheduled to take place in Belgium, Denmark, France, Finland, Germany, Greece, Hungary, Italy, the Netherlands, Norway, the United Kingdom, Portugal, Romania, Sweden and Poland, where much of the online campaigning against the European Parliament’s copyright plans has been co-ordinated from.

If you didn’t hear about the protests until now, it wasn’t because of media or government censorship. It was because hardly anyone turned out for them. Similar protests took place in European cities last August and although the attendance was larger then, it still only amounted to between 500 and 800 people in total, according to estimates. (The ACTA protests, by contrast, drew thousands.)

While the number of people taking to the streets in the name of copyright law has dwindled to near invisible numbers, online chatter around Article 13 has grown increasingly louder as policy makers approach the final stages of the long-winded and widely (although not always accurately) reported European Union Directive on Copyright in the Digital Single Market. The key piece of legislation has the potential to revolutionize how the music business and, at the heart of the matter, YouTube, operates on a worldwide basis.

Since being approved by the European Parliament in September, after an earlier version of the proposal was rejected in the summer, policy makers have been knuckling down negotiating the finer points of the directive, including its two most controversial elements: Article 11, which requires online platforms to pay publisher fees for linking to external news content, and Article 13, requiring user generated content (UGC) platforms like YouTube to conclude “fair remuneration deals” with rights holders and making them legally liable for the hosting of unlicensed content -- effectively ending safe harbor immunity. In practice, that’s likely to involve YouTube using a stricter upload filtering system, although the draft directive does not specify what methods or tools platforms must use to block illegal content.

In line with standard European Union legislative practice, negotiations have been taking place in closed-door ‘trilogue’ meetings between all three branches of the European government -- Parliament, Commission and Council -- whereby each institution presents its own draft version of the directive and attempts to reach a compromise solution.

Of those three proposals, the Parliament text adopts the toughest stance against YouTube, making it fully liable for every piece of unlicensed content hosted on the platform with zero mitigation. The Council draft text also requires the Google-owned platform to obtain licenses from rights holders, but significantly includes exceptions for liability as long as platforms take preventative measures to stop, take down and keep down unlicensed content, and have made every effort to engage with rights holders.

“When you unpack YouTube’s campaign against Article 13, they have only ever opposed the Parliament’s text and have remained very quiet on the [original] Council text because they can live with it, in truth, as it effectively gives them a new safe harbor,” says one music industry executive closely monitoring events in Brussels. “What the Council text effectively says is, ‘As long as you are playing ball and work with rights holders to block infringing content and keep it down, then you are not liable for anything that might slip through the net.’ That’s why YouTube is more relaxed about it. But they can only make use of that safe harbor if either a license is not available or someone decides not to license them. The first step is still to go and get a license in the same way that Spotify, Apple and Deezer do.”

So far, five trilogue meetings have taken place, beginning on Oct. 2 and most recently on Dec. 13 and large parts of the bill have been agreed upon -- although not Articles 11, 13 and 14 -- multiple sources tell Billboard.

A sixth and what is expected to be final trilogue was scheduled for Jan. 21, but was cancelled just days before when the Council -- made up of representatives from the 28 EU member states and chaired by current presidency holders Romania -- failed to agree upon its negotiating position. According to a blog post by Pirate Party MEP Julia Reda, who strongly opposes Article 13 on the grounds of censorship, 11 countries voted against the proposed Council text, including Germany, Belgium, the Netherlands and Sweden.

The most powerful opponent to the draft text is Germany, although contrary to the YouTube-versus-Europe narrative, its main objection has nothing to do with the value gap, but concerns the size of small and micro businesses that will be exempt from Article 13. Germany is understood to want the threshold for small and micro businesses to be turnover of less than €20 million a year; France and a number of other member states believe it should be far lower.

“There is a fear, and I don’t think it’s unfounded, on the part of smaller content providers that they are going to be surreptitiously caught out by Article 13 in everyday practice,” says Raffaella De Santis, associate at London law firm Harbottle & Lewis, which represents a number of small- to medium-sized digital services. “That’s led to an impasse because there is not a version of the text that has any consensus and -- not dissimilar to the Brexit situation -- we have the text of a deal which no one party is happy with or can accept.”

Despite those ideological differences, gradual progress is being made in the negotiations between Germany and France, say insiders, who expect the Romanian Presidency to circulate a new proposal text in the coming days. That will then be discussed in a COREPER (ambassadors) meeting and, if a 55 percent majority can be reached, a rescheduled trilogue will take place shortly after, most likely in the first or second week of February.

Providing that trilogue meeting proceeds smoothly, the agreed text then has to be ratified by the legal affairs committee before a final vote on the directive can take place, probably in March or the final Plenary session in April.

If those deadlines are not met, the fear from the music industry is that the Copyright Directive will not get passed before a new European Parliament is elected in May. Were that to happen, the directive would not be dead in the water, but it is likely that a new Parliament would want to thoroughly review such a contentious, high-profile piece of legislation before passing it, significantly delaying its introduction.

“In some quarters, that could be a possible aim -- in the hope that the directive will get kicked into the long grass,” says De Santis, adding, “with a new constitution of the Parliament, anything could happen.”

At present, “the chances of the Copyright Directive being dropped entirely are close to zero. The chances of the directive being adopted without Articles 11 and 13 are small, but can’t be discarded,” says Sophie Goossens from global law firm Reed Smith.

“It’s a very fluid process and the situation is changing daily,” elaborates one music industry insider, who like others Billboard spoke to requested to remain anonymous.

In the meantime, heavy lobbying continues to take place behind the scenes from both the creative and tech sector. In the run up to December, Google sent a large delegation of managers and senior execs to Brussels to directly lobby policy makers, according to one music executive closely involved. “They met commissioners, directors general, Prime Ministers, everyone involved from the member states,” the person says. “They have been extremely active in the lobbying process and this continues in this very delicate and technical phase of the process.” Last September also saw Wyclef Jean, who has been vocal in his opposition to Article 13, travel to Strasbourg (the official seat of the European Parliament) to urge MEPs to vote against the directive.

The music and creative industries have been equally busy lobbying, both behind closed doors in Brussels and through public campaigns backed by artists from Sir Paul McCartney to Plácido Domingo to Adele. In response, the tail end of 2018 saw YouTube shift its focus from private lobbying and proxy organizations (such as Copyright for Creativity, indirectly funded by Google) towards a more public facing campaign, with blog posts from CEO Susan Wojcicki and global head of music Lyor Cohen outlining its stance against Article 13.

“YouTube clearly changed strategy in terms of their public positioning,” says Helen Smith, chief executive of European indie labels group IMPALA. “I think they were surprised by the [September] vote in the [European] Parliament and that the campaigns they had been running were not as effective as they thought they would be.”

Smith outright dismisses YouTube’s argument that Article 13 will damage artists’ livelihoods and mean the end of memes and GIFs, which she says are already protected by European law. “If anything, it clarifies that everything that’s covered by exceptions will continue to be covered,” she says. “This directive does not have anything other than a positive impact on memes and GIFs, as it will stop platforms from abusing their position by taking everything down when it’s not necessary.”

YouTube declined to comment for this article, instead highlighting Wojcicki’s op-ed blog post and issuing the statement, “We support the goals of Article 13, but the version written by the European Parliament could have unintended consequences that would change the web as we know it. We welcome the chance to work with policymakers and the industry to develop a solution within article 13 that protects rights holders while also allowing the creative economy to thrive.”

“Some of the provisions that we have seen being tested in the past few weeks seem to have been inspired by the Google pen, but we expect to see a different approach now,” says Smith, referring to recent draft texts that placed greater obligations on rights holders, as opposed to platforms, around the policing of unlicensed works.

“The last version of the Romanian presidency [text] was more in favor of the interests of the tech giants,” agrees German MEP Helga Trüpel, who is not involved in negotiations but supports Article 13. “I was not happy with the most recent text,” she explains. “It was watered down and it was not clear how to go against the value gap. That is the opposite of what I want to achieve. I want to keep the interests of the authors, artists and journalists. This is about fair payment and remuneration.”

Sources say that the council’s position has since shifted back towards protecting rights holders, following “a clear steer from senior politicians in Europe.” The issue of liability and how to effectively implement upload filters on UGC platforms -- without restricting internet users’ freedoms -- still remains a hotly-contested issue between policy makers, however.

“Efficient filtering systems rely on the population of a database, against which content uploaded is compared and matched. What happens if the database is not correctly populated -- and who should be liable for populating it -- is one of the issues currently being discussed,” says Goossens. “It’s interesting to see that after all these years, the ghost of the Global Repertoire Database is coming back to haunt yet another text about European copyright.”

Nevertheless, Goossens says there’s “no sense in Brussels” yet that the Copyright Directive is going to collapse. “It’s not unusual for difficult texts such as this one to be negotiated until the last minute. Each institution is trying really hard to get to a compromise and it’s almost business as usual. The general mood is still a hopeful one."

That same sense of cautious optimism is shared by the majority of music industry execs and representatives who spoke with Billboard. “Are we going to get a perfect text? No,” reflects one. “Because there is no such thing in law. Are we going to get something that works for the music industry? At this point in time -- and it could all change tomorrow -- I would say there’s a greater chance that we get something that we want, than something we don’t.”