EU copyright reforms to hit Google and Facebook

Business World News

European lawmakers have approved sweeping copyright reforms that could have far-reaching consequences for the business models of tech giants like Google and Facebook.

The law is aimed at bringing the EU’s rules on copyright into the 21st century to help artists and publishers whose works have been widely dispersed on the internet.

A first reading of the new copyright directive was passed Tuesday in Strasbourg by lawmakers at the European Parliament. But it still needs to be ratified by ministers at the Council of Europe — this is the institution that brings together the different EU ministers according to their portfolios.

The planned reforms, which have been in the making since 2016, have led to a heated battle that pits large tech companies including Facebook, Google and Twitter against artists and media firms.

Google has been particularly critical of the law, which threatens to impact the business model of its video sharing service YouTube and news aggregation platform Google News.

Following the vote in the European Parliament, the tech giant said the new law has seen improvement from an original draft, but will still lead to legal uncertainty and hurt the creative industries.

“The details matter, and we look forward to working with policy makers, publishers, creators and rights holders as EU member states move to implement these new rules,” a spokesperson for the company said.

Twitter said it remained concerned about the potential ramifications of Tuesday’s vote for the internet.

“We will continue to engage with EU member states and civil society as the implementation process evolves,” a spokesperson for the firm said.

Facebook declined to comment.

One section of the law could result in the implementation of pre-filtering systems that block internet users from sharing memes and other content containing copyright-protected material.

Another part of the copyright overhaul would require news aggregation services like Google’s to negotiate commercial licenses with publishers in order to post snippets or links to articles.

‘Hollywood vs. Silicon Valley’

On the tech side, Google and a number of high-profile figures including internet pioneer Tim Berners-Lee and Wikipedia founder Jimmy Wales have railed against the new EU copyright directive. In the media corner, famous artists from ex-Beatle Paul McCartney to Blondie singer Debbie Harry have argued in favor.

According to the European Parliament, the new directive specifies that uploading works to online encyclopedias in a non-commercial way, such as Wikipedia, or open source software platforms, such as GitHub, will automatically be excluded. Start-up platforms will be subject to lighter obligations than more established ones.

“What we have approved is sensible, proportionate and sees the law finally catching up with the digital age,” Sajjad Karim, a member of the European Parliament representing Britain’s Conservative Party, said.

“The emergence of new business models and platforms has led to an uneven playing field and change is essential.”

Pro-internet freedom activists claim the new law will censor everything from memes to snippets of music and film. Supporters of the law, meanwhile, argue that people and companies in the creative industries are being starved of revenues lost to the sharing of their intellectual property on online platforms.

“The main problem I can see is it’s very unclear how tech companies are supposed to comply with those obligations,” Kathy Berry, an intellectual property lawyer at Linklaters, told CNBC ahead of the vote.

Berry, who characterized the episode as “Hollywood versus Silicon Valley” said questions remain unanswered over how tech companies should take a “proportionate response” against copyrighted material online.