Internet Giants Required to Pay Creators for Content in the EU

The European Union has agreed to new rules that will require online platforms, such as Google and YouTube, to compensate creators for the online dissemination of their copyrighted works.

The rules are part of the European Commission’s efforts to create a Digital Single Market and ensure that the rights and obligations of European Copyright Law are applied to the internet.

Under the rules, online platforms will be required to negotiate with musicians, performers, artists, authors, and news publishers for the right to display their copyrighted material. Creators will also be permitted to re-negotiate for additional compensation “when the remuneration originally agreed to is disproportionately low compared to the benefits derived by the distributor.” While the rules do not require upload filters, online platforms must proactively block any copyrighted content for which a license is refused. This includes removing user uploaded video clips that contain copyrighted material. When content is posted without a license agreement, online platforms must demonstrate that they have made best efforts to obtain authorization. The rules also maintain online platforms’ obligation to remove any unauthorized content upon notification.

The rules provide exceptions for the use of copyrighted material for quotation, criticism, review, caricature, pastiche, and parody. Thus, online platforms can display some memes and gifs without providing compensation. Online platforms may also freely display hyperlinks to news articles accompanied by very short snippets. Uploading copyrighted works in a non-commercial manner to online non-profit encyclopedias, such as Wikipedia, open-source software platforms, such as GitHub, and educational and scientific repositories is also permitted. Platforms that have been live for less than 3 years, have less than 10 million Euros in revenue, and less than 5 million monthly users, will be subject to less obligations.

After the rules are confirmed and published, Member States will have 1 year to adopt the rules through national legislation. In the meantime, online platforms in the EU should be preparing for this Directive. Reviewing online content, obtaining license agreements, and imposing mechanisms to block and remove unauthorized content is of the utmost importance.

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