Mercado Único Digital: un largo camino por recorrer

Autor:Viola Elam
Cargo:European University Institute, IT
Páginas:43-58
RESUMEN

Este artículo presenta una evaluación global de las recientes iniciativas elaboradas por la Comisión Europea en el marco de la Estrategia para el Mercado Único Digital (Digital Single Market Strategy, SGDS) y más allá. El principio de territorialidad de los derechos de autor es un hilo conductor que atraviesa varios documentos políticos y propuestas legislativas. El carácter territorial de los derechos de autor se identifica como un gran obstáculo para el establecimiento y el buen funcionamiento de un mercado interior de contenidos y servicios digitales, ya que contribuye a la complejidad de la liquidación de derechos, la exclusividad territorial y las prácticas de bloqueo geográfico. Sin embargo, las opciones políticas iniciales orientadas a una erosión sustancial de la territorialidad de los derechos de autor no se han articulado en medidas legislativas concretas. La Comisión ha optado finalmente por un enfoque considerablemente menos ambicioso, que pretende mitigar algunos efectos secundarios menores de la territorialidad. La propuesta que pretendía imponer la plena accesibilidad de los contenidos en toda la UE se diluyó para dar cabida a las preocupaciones expresadas por la mayoría de las partes interesadas en la industria creativa. Los esfuerzos para hacer frente al bloqueo geográfico no están dirigidos a los proveedores de contenidos audiovisuales y obras protegidas por derechos de autor. La ampliación del principio del «país de origen» se limita a los servicios auxiliares de las emisiones. Del mismo modo, la «portabilidad» transfronteriza de los contenidos no ofrece una solución real para eliminar las barreras nacionales en el entorno digital europeo. Por lo tanto, los derechos de autor seguirán estando arraigados territorialmente y la plena integración de los mercados de contenidos creativos no será una realidad, al menos en un futuro próximo. Este artículo aborda la posible falta de continuidad entre los objetivos generales expresados en el DSMS y los pasos legislativos subsiguientes, y cuestiona el uso de una terminología que conduce a la inseguridad jurídica. El derecho de vecindad recientemente introducido para los editores de prensa podría representar una fuente adicional de fragmentación territorial. La obligación (de supervisión general) impuesta a los proveedores de servicios de la sociedad de la información exige un examen riguroso. Este artículo, sin embargo, valora la adopción de reglamentos, lo que implica un nivel más profundo de armonización y la disposición de excepciones y limitaciones obligatorias.

 
CONTENIDO
IDP no. 26 (February, 2018) I ISSN 1699-8154 Journal promoted by the Law and Political Science Department
Viola Elam
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Universitat Oberta de Catalunya
Submission date: June 2017
Accepted date: January 2018
Published in: February 2018
ARTICLE
Digital Single Market:
a long way to go
Viola Elam
European University Institute
Abstract
This paper provides an overall assessment of recent initiatives devised by the European Commission as
part of the Digital Single Market Strategy (“DSMS”) and beyond. A connecting thread running through
various policy documents and legislative proposals is the principle of copyright territoriality. Copyright’s
territorial nature is identified as a great hindrance to the establishment and smooth functioning of an
internal market for digital content and services, since it contributes to the cumbersomeness of rights
clearance, territorial exclusivity and geo-blocking practices. Nonetheless, the initial policy options, geared
towards a substantial erosion of copyright territoriality, have not been articulated in concrete legislative
measures. The Commission has finally opted for a considerably less ambitious approach, which purports
to mitigate some minor side effects of territoriality. The proposal seeking to mandate full accessibility
of content across the EU was watered down to accommodate concerns expressed by the majority of
stakeholders in the creative industry. The efforts to tackle geo-blocking are not addressed to providers of
audio-visual content and copyright-protected works. The extension of the “country of origin” principle is
limited to services ancillary to broadcasts. Likewise, cross-border “portability” of content does not offer
a real solution to dismantling national barriers in the European digital environment. Hence, copyright will
remain territorially grounded and a full integration of markets for creative content will not become a reality,
at least in the near future. This paper discusses the potential lack of continuity between the overarching
aims expressed in the DSMS and subsequent legislative steps, and criticises the use of terminology leading
to legal uncertainty. The newly introduced neighbouring right for press publishers might represent an
additional source of territorial fragmentation. The (general monitoring) obligation imposed on information
society service providers requires strict scrutiny. This paper, however, values the adoption of regulations,
entailing a deeper level of harmonisation, and the provision of mandatory exceptions and limitations.
Keywords
Digital Single Market, geo-blocking, portability, press publishers, online intermediaries, content recognition
technologies
Topic
Intellectual Property Law, Copyright
43
Viola Elam
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Digital Single Market: a long way to go
Mercado Único Digital: un largo camino por recorrer
Resumen
Este artículo presenta una evaluación global de las recientes iniciativas elaboradas por la Comisión
Europea en el marco de la Estrategia para el Mercado Único Digital (Digital Single Market Strategy, SGDS)
y más allá. El principio de territorialidad de los derechos de autor es un hilo conductor que atraviesa
varios documentos políticos y propuestas legislativas. El carácter territorial de los derechos de autor se
identifica como un gran obstáculo para el establecimiento y el buen funcionamiento de un mercado interior
de contenidos y servicios digitales, ya que contribuye a la complejidad de la liquidación de derechos, la
exclusividad territorial y las prácticas de bloqueo geográfico. Sin embargo, las opciones políticas iniciales
orientadas a una erosión sustancial de la territorialidad de los derechos de autor no se han articulado
en medidas legislativas concretas. La Comisión ha optado finalmente por un enfoque considerablemente
menos ambicioso, que pretende mitigar algunos efectos secundarios menores de la territorialidad. La
propuesta que pretendía imponer la plena accesibilidad de los contenidos en toda la UE se diluyó para dar
cabida a las preocupaciones expresadas por la mayoría de las partes interesadas en la industria creativa.
Los esfuerzos para hacer frente al bloqueo geográfico no están dirigidos a los proveedores de contenidos
audiovisuales y obras protegidas por derechos de autor. La ampliación del principio del «país de origen»
se limita a los servicios auxiliares de las emisiones. Del mismo modo, la «portabilidad» transfronteriza
de los contenidos no ofrece una solución real para eliminar las barreras nacionales en el entorno digital
europeo. Por lo tanto, los derechos de autor seguirán estando arraigados territorialmente y la plena
integración de los mercados de contenidos creativos no será una realidad, al menos en un futuro próximo.
Este artículo aborda la posible falta de continuidad entre los objetivos generales expresados en el DSMS y
los pasos legislativos subsiguientes, y cuestiona el uso de una terminología que conduce a la inseguridad
jurídica. El derecho de vecindad recientemente introducido para los editores de prensa podría representar
una fuente adicional de fragmentación territorial. La obligación (de supervisión general) impuesta a los
proveedores de servicios de la sociedad de la información exige un examen riguroso. Este artículo, sin
embargo, valora la adopción de reglamentos, lo que implica un nivel más profundo de armonización y la
disposición de excepciones y limitaciones obligatorias.
Palabras clave
Mercado Único Digital, bloqueo geográfico, portabilidad, editores de prensa, intermediarios en línea,
tecnologías de reconocimiento de contenidos
Tema
derecho de la propiedad intelectual, derechos de autor
1. Introduction
The following inquiry aims to provide an overview of
recent initiatives taken by the EU Commission in the field
of copyright and related rights. It purports to outline what
the trend has been in recent years as far as EU copyright
policy is concerned.
A particular focus in the policy debate is laid on the
modernisation of the European framework of copyright and
related ri ghts, in order to make it ful ly fit for the digital world.
Widespread Internet access, high-speed Internet
transmission, ubiquitous devices, increased memory of
storage devices, new online services – such as video and
content-sharing sites, social networks, news aggregators
and search engines – have revolutionised the way creative
content is produced, distributed and used.
Thus, EU policy-making in the area of copyright is geared
towards meeting the new-fangled challenges posed by new
media tools and Internet-based communication technologies.
It aims to achieve a wide availability of creative content across
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Digital Single Market: a long way to go
the EU, whilst providing a high level of protection for right-
holders, and maintaining a good balance with other public
policy goals, such as education, innovation, and research.
1
Likewise, the need for a more harmonised copyright regime
– particularly by tackling specific side effects of copyright
territoriality – is constantly evoked in the EU policy agenda.
As explained below, this focus is reflected in the
Communication of 2015, A Digital Single Market Strategy
for Europe (“DSMS”),
2
where the Commission acknowledges
that the transmission and consumption of digital content
across boarders bears significant potential for economic
growth. Yet, the territorial application of copyright rules
creates a major barrier to the access and use of such online
content services.
Before entering into the details of recent initiatives taken
by the European legislator, it is important to outline, first
of all, the major challenges that the principle of copyright
territoriality poses to the establishment and the smooth
functioning of an internal market for digital content.
2. The Principle of Territoriality
Copyright shares with other IPRs an essential feature:
territoriality. This principle, enshrined in Article 5 of the
Berne Convention, has been reaffirmed in more recent case
law from the CJEU.
3
There is no such thing as a uniform EU copyright law.
Works and other subject matter are protected on the basis
of 28 national laws on copyright and related rights that
apply respectively within the territorial boundaries of each
Member State.
Thus, the exclusive rights that copyright confers are acquired
and enforced at national level on the basis of the law of the
place where protection is claimed (lex loci protectionis).
4
1. EC Communicati on, Towa rd s a M od e rn , m or e Eu ro p ea n C op yr i gh t Fr am e wo rk , COM(2015)626 final, 1 (hereinafter “Communication of 2015”).
2. COM(2015)192 final, 2.4.
3. Case C-192/2004 Lagardère Active Broadcast v SPRE and GVL (14 July 2005), [46].
4. Regulation 864/2007, Article 8.
5. Joined Cases 55/80 & 57/80 Musik-Vertieb Membran GmbH v GEMA (20 January 1981). See Hugenholtz (2016).
6. Case C-128/11 UsedSoft GmbH v Oracle Int’l Corp (3 July 2012).
7. Case C-419/13 Art & Allposters International BV v Stitching Poctoright (22 January 2015).
Notwithstanding the process of copyright harmonisation
has been on-going for more than twenty years, national
copyright laws continue to present significant differences
on substantial issues, such as authorship, ownership, moral
rights, transformative uses of a work (ie, adaptation),
limitations and exceptions, and enforcement.
The dematerialisation of content distribution has prompted
discussion on the negative effects that copyright territoriality
exerts on the free movement of services in the internal
market.
In fact, for a world of tangible goods, the problem of EU
market fragmentation caused by the territorial application
of copyright is easier to tackle; it was first handled by the
CJEU’s case law establishing the principle of Community
exhaustion of the distribution right.
5
The online environmen t, however, receives a different
treatment. With the sole exception of software, given the lex
specialis nature of the Software Directive,
6
the principle of
exhaustion is not analogically applicable to the transmission
of digital content.
7
Indeed, a textual interpretation of Recital 29 of the
InfoSoc Directive rules out the possibility of recognizing
a general principle of “online exhaustion”. Furthermore,
online transmission of copyright works does not imply a
distribution, but both a reproduction and an act of making
available the work to the public, within the meaning of
Article 2 and 3 of the InfoSoc Directive respectively; these
two rights, however, are not subject to exhaustion.
One should also note that the act of “making available to
the public” is relevant in each of the EU countries where
the work can be directly accessed, plus, potentially, the
country in which the content is uploaded. This implies that
online content providers aiming to provide services across
the whole of Europe first need to clear rights covering all
28 Member States.
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Digital Single Market: a long way to go
As a consequence of this, in case the right-holder has not
granted a licence for the online transmission of content in
the whole of Europe, the service provider will have to use
technologies to limit or deny access to the website from the
territories that are not covered by the licence.
A distinction can be made between two forms of geographical
discrimination that a service provider can put in place: geo-
blocking (ie, restricting access to online content based on
the user’s geographical location); and geo-filtering (ie,
automatically re-routing users to different sites).
For all these reasons, on the one hand, the principle
of territoriality – that inevitably encourages territorial
licensing and geo-blocking practices – has been denounced
to constitute a major hurdle for achieving internal market
goals and, in more recent years, the establishment of a
unified digital market in Europe.
On the other hand, territoriality is often perceived as
the cornerstone of cultural, educational and linguistic
heterogeneity. For the sake of cultural diversity, the need of
preserving autonomy, through state-specific rules, becomes
critical.
Moreover, within the audio-visual industry, territorial
licensing and exclusivity continue to play a key role in the
financing, production and distribution of works.
2.1. Policy options to overcome
or mitigate copyright
territoriality
Prior to the launch of the DSMS, various approaches have
been suggested to address the negative effects ensuing
from the territorial application of copyright law.
8
In order to overcome obstacles hindering the accessibility of
content across borders, it has, first, been propos ed to ex tend
the principle of exhaustion to online transmitted works.
8. Public Consultation on the Review of the EU Copyright Rules, launched by the previous Commission in December 2013. Available at: <http://
ec.europa.eu/internal_market/consultations/2013/copyright-rules/docs/consultationdocument_en.pdf>.
9. EC Report, Responses to the Public Consultation on the Review of the EU Copyright Rules (July 2014). Available at: <http://ec.europa.eu/
internal_market/consultations/2013/copyright-rules/docs/contributions/consultation-report_en.pdf>, p. 21.
10. EC White Paper, A Copyright Policy for Creativity and Innovation in the European Union (2014).
11. Article 1(2)(a). A similar principle is also contained in Article 2 of the AVSM Directive 2010/13/EU and Article 3 of the ECD 2000/31/EC.
Nonetheless, right-holders appeared to be reluctant to
such an option, arguing that enabling the online resale of
digital content would undermine investment in the copyright
content.
9
As compared to their analogue counterparts, digital works
exist in perpetuity and can be duplicated in exact replicas at
a very low price. Thus, if physical copies depreciate in value
and quality over time, digital content will always remain in
its original state.
Moreover, in case of digital transmission of content, it is
also extremely complicated to determine whether the online
seller has deleted the original copy of the work. For all these
reasons, the risk of mass-scale infringemen t is considerable.
The second possible route delineated by the Commission to
enhance cross-border distribution of content is to address
the uncertainty surrounding the territorial reach of the
“making available” right.
10
In fact, the provision set out in Article 3 of the InfoSoc
Directive does not state what elements of the act of making
available should be considered relevant for its application
(ie, the availability on a server, the actual transmission, the
accessibility by the public, the reception by the public), nor
does it determine the place where the act occurs.
To remedy this issue, one possibility would be to extend to
all online communications the “country of origin” principle,
enshrined in the Satellite and Cable Directive 93/83/EEC
(“SatCab Directive”).
11
According to this legal fiction, the act of satellite broadcasting
takes place, for copyright purposes, in the country where the
signal originates, although it has effects beyond the Member
State of origin. Hence, in order to broadcast audio-visual
content, the rights need to be cleared only in the country
where the signal is first uplinked, rather than in the countries
where the signal is received. The side effects of territoriality
are thus mitigated.
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Digital Single Market: a long way to go
It follows that, if the “country of origin” approach were
followed in the online environment, the “making available
of a copyright-protected work would take place in the
Member State where the work is uploaded or where the
uploader has its centre of activities. Thus, a service provider
would have to obtain a licence from the right-holder solely in
such a country (ie, country of upload or centre of interests).
12
As outlined below, in the aftermath of the DSMS, the
discussion about the applicability of the “country of
origin” principle to online communications converged into
a public consultation on the review of the SatCab Directive,
13
followed by a proposal for a Regulation laying down rules
on the exercise of copyright and related rights applicable to
certain online transmission of broadcasting organisations
and retransmissions of television and radio programmes
(“Broadcasting Regulation”),
14
published on 14 September
2016.
Finally, the third policy option discussed by the previous
Commission is the introduction of a unitary European
copyright title, eradicating the principle of copyright
territoriality.
The creation of a pan-European title, on the grounds of
Article 118 TFEU, is a radically different process from the
harmonisation of national laws. The former entails the
introduction of a new title, through a Regulation, that
is directly applicable in all Member States. By contrast,
harmonisation is aimed at adjusting and approximating
existing national laws, primarily through Directives.
The automatic operation of a unitary European title may
necessitate the simultaneous replacement of national
titles, as opposed to the case of Community designs and
Community trademarks.
A smoother approach would be to make such European
copyright title an option for right-holders, which would not
replace but co-exist in parallel to national copyright titles.
15
12. Following the approach endorsed by the CJEU in recent case law, the act of making available can be localised in the Member State or
several Member States where the public is targeted (“targeting approach”), through advertisements, promotions, or choice of language,
rather than in the country of origin. See Case C-173/11, Football Dataco v Sportradar (18 October 2012).
13. Available at: <https://ec.europa.eu/digital-single-market/en/news/full-report-public-consultation-review-eu-satellite-andcable-directive>.
14. COM(2016)594 final.
15. Derclaye and Cook (2011, p. 260).
16. Communication of 2015, supra note 1, 6.
In this respect, it should be noted that, contrary to other IPRs,
copyright in the EU subsists independently of registration,
in accordance with the “no-formalities” principle enshrined
in Article 5(2) of the Berne Convention.
Thus, the viability of a softer solution depends mostly on
whether the EU can implement an optional registration
system – on top of national copyright systems – that
will, nonetheless, comply with the abovementioned “no-
formalities” principle.
For the moment, the idea of introducing a single European
copyright title has not been concretised, but vaguely
postponed to the future. It constitutes a very difficult task
to achieve, in a context where harmonisation of national
laws is far from being fully achieved.
The EU would need to adopt a Regulation dealing with all
aspects of copyright, including those for which there is still
significant disparity in Member States’ legislations.
In the Commission’s view, albeit not in a reasonable time,
uniform application of the rules would also call for a
single copyright jurisdiction with its own tribunal, so that
inconsistent case law does not lead to more fragmentation.16
By way of comparison, discussions surrounding the adoption
of the unitary patent system commenced many decades ago
(in 1962); even so, the new system is expected to be up and
running by the end of 2017.
3. Digital Single Market Strategy
and beyond
On 6 May 2015, the European Commission adopted its
DSMS, envisaging three main areas of intervention, as far
as copyright law is concerned: 1) ensuring access to – and
the provision of – copyright-protected content across
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Digital Single Market: a long way to go
borders, and tackling geo-blocking; 2) reviewing some
exceptions and limitations to copyright, and discussing
the possibili ty to int roduce an exception for text and
data-mining for commercial and non commercial purposes
alike; 3) discussing the role of intermediaries and whether
enforcement of copyright and IPRs could be ameliorated
at the EU level.
To achieve these objectives, the Commission proposed
a step-by-step or “incremental” approach;
17
it presented
proposals for the very short term (ie, the draft Regulation
on ensuring the cross-border portability of online content
services in the internal market, from now on “Portability
Regulation”),
18
a set of proposals planned for 2016, and
a “long-term vision” that was vaguely postponed to the
future.
In 2016, there was a sudden flood of legislative proposals.
On 23 March 2016, the European Commission launched
a “public consultation on the role of publishers in the
copyright value chain and on the panorama exception”. In
that occasion, it came as a surprise that the Commission
was considering the introduction of a neighbouring right
for publishers, since this possibility was not contemplated
in the DSMS.
On 25 May 2016, the European Commission adopted a new
legislative proposal for a Directive amending Directive
2010/13/EC concerning the provision of audiovisual media
services.
19
In the meantime, it published a Communication
on Online Platforms and the DSM.
20
Thereafter, on 14 September 2016, the Commission unveiled
a new set of proposals, including the draft Broadcasting
Regulation and the proposal for a Directive on Copyright in
the Digital Single Market (“Copyright Directive”).
21
17. Id.
18. COM(2015)627 final.
19. COM(2016)287 final.
20. COM(2016)288 final.
21. COM(2016)593 final.
22. Synodiniou (2016). Research Paper commissioned by the EU Parliament, DG for Internal Policies, EU Portability. Regulation, In-Depth
Analysis of the Proposal.
23. COM(2016)289 final.
3.1. Draft regulation on the portability
of online content services
The proposed Portability Regulation would represent “a
dynamic shift towards a new legislative tactic which aims
to have a stronger, full and direct effect”, being the first
Regulation in the field of copyright law.
22
It sh ould, howeve r, be noted that the scope of the
intervention is very narrow, since it is aimed at tackling a
very specific side effect of copyright territoriality: the barrier
to “portability” of legally acquired content (such as films,
music, e-books, games, and sporting events) within Europe.
The broader question of cross-border “access” to content
(ie, the possibility for a consumer to subscribe to an online
service provided in another Member State) is addressed by
the draft Geo- Blocking Regulation.
23
Yet, despite what was originally announced in the DSMS:
1) the Geo-Blocking Regulation excludes from its scope
audio-visual services; 2) the prohibition on traders applying
different conditions of access to goods and services does not
cover “services the main feature of which is the provision
of access to and use of copyright-protected works or other
protected subject matter” (Article 4(1)(b)).
Hence, the Commission’s ambitious plan to prohibit
unjustified geo-blocking was doomed at the outset to partial
failure, as the most frequently “geo-blocked” online content
(ie, audio-visual and copyright-protected works) is outwith
the scope of the proposed Regulation.
As a consequence, right-holders will still be able to license
content o n a ter ritorial basis, and service providers will
limit access to such content, depending on the customer’s
country of residence.
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Digital Single Market: a long way to go
In fact, the proposal seeking to mandate full accessibility of
content across the EU was watered down to accommodate
concerns about the potential negative effects on territory-
based content distribution models, expressed by the majority
of right-holders, producers, distributors and broadcasters
operating in the creative industry.
24
From the latter’s perspective, it remains crucial that
territoriality is not undercut, being considered a principle
that contributes to securing adequate financing of high-
quality and independent content, preserving cultural and
linguistic diversity, and safeguarding creative freedom.
In fact, pre-sale distribution agreements, which are usually
associated with exclusive territorial licences, continue to
represent a prominent financial tool in the audio-v isual
sector.
Going back to the issue of “portability” of subscriptions
across borders, this objective is primarily accomplished by
Article 3(1) of the Portability Regulation, which imposes a
mandatory obligation on service providers to ensure that
users, who have subscribed to an online content service
25
(audio-visual services and services that provide access to
any type of work, such as Netflix, iTunes or Sky Go) in their
home territory, can access and use it, while temporarily
present in another Member State.
To this purpose, Article 4 of the Portability Regulation
restricts the effects of copyright territoriality by introducing
a legal fiction whereby the provision of, and the access to,
an online content service shall be deemed to occur solely
in the subscriber’s “Member State of residence”, and not
in the place where the act physically occurs.
26
Noteworthy, the Regulation shall apply retroactively to
contracts concluded before the date of its application and
render any contractual provision contrary to cross-border
portability unenforceable.
27
Thus, territorial restrictions
cannot be imposed any longer, neither contractually (ie, by
24. European Audiovisual Observatory (2015).
25. Are providers hosting user-generated content included within this definition? Would it be possible to reconcile Article 3 of the proposed
Regulation with Article 15 of the ECD?
26. The term “solely”, as opposed to “shall be deemed to occur”, is also contained in Article 1(2)(b) of the SatCab Directive.
27. Articles 5 and 7.
28. Supra note 22, p. 28.
29. Mazziotti and Gimonelli (2016).
30. EU Parliament (2016).
a licensor on the service provider) nor technologically (ie,
geo-blocking measures).
The Council of the European Union and the European
Parliament have completed their review of the draft
Regulation and proposed a number of amendments. It
remains to be seen what will be the final text on which the
legislative organs will agree.
A certain degree of uncertainty surrounds the “hybrid”
nature of portability, as both a mandatory exception to the
making available right – which is subject to the three-step
test – and a user’s right – which cannot be overridden by
contractual clauses.
In a similar vein, the nature of the service provider’s
obligation, the legal consequences, as well as the
mechanisms of enforcement remain rather obscure.
28
Moreover, key to the actual scope of the Regulation is the
definition of the “temporarily present” requirement (Article
2(d)).
Scholarship suggests that a strict definition would be
applicable only to tourists, travellers and most probably
short-term migrants, in a way that the proposed Regulation
can be viewed as a sort of “roaming for Netflix” that does
not erode the principle of territoriality.
29
On the contrary, if the same definition were construed
more broadly, as meaning “any length of presence other
than permanent presence”, it would benefit a much larger
share of the EU population – including long-term migrants
thereby contributing to the creation of a DSM for copyright
content.
30
Likewise, the concept of “Member State of residence”
(Article 2 (c)) needs further clarification, since the notion
of “habitual residence” is not clearly defined in EU law.
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Moreover, under the Commission’s proposal, the Regulation
shall apply to online content services that are purchased or
offered for free, on the basis of a contract, and that can be
accessed by streaming, download or any other technique
that allows use of that content.
However, the line between paid or unpaid services is
somewhat blurred. What if a user does not have to pay
at the time of subscription, but only at a later stage (for
instance, in order to have an additional service)?
Finally, the Regulation enables right-holders and service
providers to identify, on a purely contractual basis, the most
effective means to verify the subscriber’s Member State of
residence. This means that different verification measures
may be implemented for different content. Moreover, right-
holders may have incentives to require stricter verification
mechanism, such as constant monitoring of the location,
in order to preserve territoriality and benefit from price
discrimination strategies, whereas service providers may
prefer “softer” mechanism, such as periodic checking of the
IP addresses, billing addresses, bank details, etc.
31
Arguably, making the verification means dependant on the
parties’ bargaining power is at odds with the objective of
the Regulation, namely to introduce a common approach to
ensuring cross border portability at the Union Level (Recital
29; Article 1).
3.2. Regulation on broadcasters’ online
transmission and retransmission
Despite fierce opposition from right-holders,
32
the draft
Broadcasting Regulation purports to enhance a wider online
access to TV and radio programmes by users across the EU.
To this end, it extends the “country of origin principle” to
broadcasters’ “ancillary online services” made available by
or under the control or responsibility of the broadcaster.
33
31. Id., 33.
32. In the view of right-holders and commercial broadcasters, an extension of the country of origin principle to online communications: 1)
restricts the ability to license rights on a territorial basis and reduces creators’ revenues; 2) poses the risk of forum shopping; 3) is not
needed, as voluntary multi-territorial licences already exist.
33. See Article 2(1) referring to the acts of communication to the public, making available and reproduction.
34. This principle departs from the SatCab Directive (ie, the place where the signal in transmitted) and Directive 2010/13/EC (the place of the
broadcaster’s establishment, not “principal” establishment).
35. Recital 12, Articles 1, 3, and 4.
Online services ancillary to broadcasts include simulcasting
(online services that are simultaneous to the broadcast) and
catch up services (online services provided within a defined
time period after the broadcast), whereas on-demand
services of a broadcasting organisation and other online
services of a third party are not covered (Recital 8).
In order to mitigate the risk of forum shopping, the EU
legislator refrained from establishing the country of origin
“where the server is located”; rather, it is the country where
the broadcaster has its “principal establishment”.
34
It follows that a broadcasting organisation, making its
simulcast or catch up services available online, has to be
granted a licence from the content owner solely in one
country (ie, that of its principal establishment).
As for the digital retransmissions of TV and radio
programmes, the proposed Regulation provides for the
application of a mandatory collective management of right.
Retransmissions shall include retransmissions provided over
“closed” electronic communication networks (such as IPTV),
and not offered on the open Internet.
35
Looking at the broader picture, in the first place, the principle
of country of origin laid down in the draft Regulation is
targeted to cover very specific segments of the Market (ie,
online transmissions that are related to the broadcast).
Thus, the scope of its application is very limited, as it does
not extend to stand-alone online services, nor does it
apply to any subsequent communication to the public or
reproduction of content (Recital 9).
Second, the proposed Regulation does not affect the
contractual freedom of right-holders and broadcasters,
insofar as they will still be able to license their rights on
a territorial basis, provided that any territorial restriction
conforms to EU competition rules (Recital 11).
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In fact, the proposal does not oblige broadcasters to provide
their services across borders, or right holders to grant pan-
European licenses. Hence, the possibility of geo-blocking is
not ruled out.
When agreeing licensing fees, the parties shall take into
account all aspects of the ancillary online service, including
its “functionality, audience and language” (Article 2(2);
Recital 10).
36
Hence, the broadcaster may be required to
pay a higher price to guarantee the right-holder concerned
an appropriate remuneration.
It seems that the Commission worked out a compromise
solution for reconciling conflicting views among major
stakeholders. As for the Impact Assessment accompanying
the draft Regulation, this intervention is expected to
facilitate the development of the market without disruption
of the existing business models and distribution strategies
(ie, facilitate the clearance of rights for certain services
only, whilst guaranteeing a high level of protection of right-
holders).
37
It is, however, questionable whether the very limited scope
of the reform, mingled with the considerable discretion left
to the parties over the possibility to grant territorial licences
and geo-block online content, will prove effective.
Arguably, the proposed Regulation does not significantly
contribute to enhancing cross-border accessibility of
content. On the contrary, it seems that, after many years
of intense legislative activity, the Commission has finally
acknowledged the key role that territoriality plays for
the long term viability of the audio-vi sual sector, and
reconsidered its strong political will to create an internal
market for digital content and services.
36. See Joined cases C-403/08 FAPL v QC Leisure and Others and C-429/08 Karen Murphy v Media Protection Services (4 October 2011),
[107]-[110].
37. Available at: <http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52016SC0302&from=EN>, p. 3.
38. See also Articles 4 and 5.
39. Contractual provisions contrary to the “decompilation exception” (Article 6) are unenforceable.
40. Article 15.
41. Hyperlinking does not constitute a communication to the public (Recital 33).
3.3. Directive on copyright
in the Digital Single Market
The proposed Copyright Directive presents some peculiar
characteristics different from earlier Directives in the field
of copyright law.
First, contrary to the structure of Article 5 InfoSoc Directive,
the proposed Directive mandates upon Member States to
introduce some exceptions or limitations, such as text and
data mining (“TDM”) carried out by research organisations
for “commercial” and “non-commercial” purposes alike.
(Article 3). Thus, for the first time, certain exceptions and
limitations to copyright infringement cease to be optional.
38
Moreover, the Directive is designed to make contractual
clauses contrary to the TDM exception “unenforceable”
(Article 3(2)). A similar requirement can be found only in
the Software Directive 2009/24/EC
39
and in the Database
Directive 96/9/EC.
40
Noteworthy, notwithstanding the public consultation of
March 2016, “freedom of panorama” does not form part
of the proposed Directive. What was initially perceived as
a fundamental issue has just vanished in the mists of time.
Contrariwise, the highly controversial neighbouring right
for publishers has been finally introduced under Article 11
Copyright Directive. This provision provides publishers of
press publications with a neighbouring right (not an ancillary
right, but an exclusive right that Member States “shall”
implement) for the digital use of their press publications
(from now on “RPPP”).
More precisely, press publishers will have control over the
rights provided for in Article 2 and 3(2) InfoSoc Directive,
meaning that they will be entitled to oppose any reproduction
and making available to the public of the published version
of the articles (not including hyperlinking).
41
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Only press publishers as defined in national legislation will
be granted the new RPPP, lasting for 20 years from the date
of the publication of the press publication.
For other publishers in general, Ar ticle 12 provides that
Member States “may” provide that these publishers have
a claim to share the compensation that the author receives
when the work is being used on the grounds of an exception
or limitation under national law (ie, private copying or
reprography).
Therefore, contrary to the goal of maximum harmonisation,
not only does Article 12 leave to Member States the option of
granting other publishers a share in the author’s revenues,
but it also lacks any indication of how the sharing would
need to be done (ie, 40:60 or 50:50?).
42
Going back to the RPPP, in the Explanatory Memorandum
of the proposed Directive, the Commission highlights that
the reason for introducing such right is to facilitate online
licensing of their publications, the recoupment of their
investment and the enforcement of their rights”.
Moreover, in Recital 31 of the proposed Directive, the
Commission alludes to the importa nce of preserving a high-
quality, free and pluralist press. To this end, an improved
legal enforcement and additional sources of revenues for
press publishers are needed.
A comprehensive assessment of the beneficial or unfortunate
effects that such reform may cause exceeds the scope
of the present inquiry. It should however be noted that,
in general terms, the call for introducing a neighbouring
right was triggered by the fact that press publishers have
incurred a substantial loss of revenue to be attributed to the
emergence of new sources of information through digital
media.
Hence, the backers of the proposed Directive – mostly
large publishing houses – are interested in getting shares
of revenues generated by search engines, news aggregators
and social networks that allegedly free ride on their
investments by providing the public with shor t fragments
42. Xalabarder (2016, p. 6).
43. Id., p. 9.
44. Ramalho (2016).
of newspaper articles, such as headlines, snippets and
thumbnail, without paying a licence fee.
Furthermore, the adoption of a RPPP is underpinned by
the assumption that press publishers occupy a similar role
to that of film or phonogram producers, and the latter are
already entitled to neighbouring rights.
Many arguments against the proposal to introduce a RPPP
can be put forward. For present purposes, it is impor tant to
stress that such proposal fails to explain how 28 additional
national rights might help achieving the objective of creating
a DSM for online content, instead of increasing the risk of
territorial fragmentation.
As noted by Xalabarder, a criticism that one could make is
that publishers have been, until now, the assignees of the
authors’ exclusive rights, thus having an exclusive right to
bargain with the online platforms.
As she sugg ests, another layer of excl usive rights is
unnecessary.
43
It may constitute an additional source
of fragmentation, making t he clearance of rights mo re
burdensome and increasing transaction costs. It may also
weaken the position of authors, who would not be able
to claim a share of the additional revenues secured by
publishers.
Legal uncertainty ensuing from the introduction of a
new right and its unpredictable interplay with (national)
exceptions and limitations equally jeopardises internal
market goals.
44
In addition, the RPPP is a major cause for concern because
it may: 1) restrict cross-border flow of – and access to –
information, thus threatening the fundamental right
enshrined in Article 10 ECHR and Article 11 of the Charter;
this is somewhat paradoxical, given that the rationale
underlying the legislative intervention is to safeguard
a free and pluralist press; 2) reduce the possibility for
authors to benefit from maximum exposure of their works;
3) considerably affect research and education institutions,
start-ups and other smaller online businesses, as well as
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open access publishers; 4) hinder the emergence of new
business models; 5) promote non-European publications,
that would be accessible without restrictions.
Moreover, the rationale for granting neighbouring rights to
phonogram producers, broadcasters and film producers was
mainly economic, ie, to foster investments in the production
of phonograms, films, and broadcasts – that back in the days
were particularly high and risky – by granting temporary
exclusive rights.
The proposed publisher’s right seems to ignore the reality
that, nowadays, publishing does not require a considerable
up-front investment in technical infrastructure. The type
of investment that is usually made is directed towards
advertising, marketing, branding, and content aggregations;
these activities do not, however, justify the introduction of
an additional and autonomous right.
45
Additional questions surround the compatibility of the RPPP
with the Berne Convention and, in particular, the provision
on quotations. In fact, Article 10(1) of the Convention sets out
a mandatory limitation for the so-called “revue de presse”46
that it is compatible with fair practice.
One may argue that search engines and news aggregators
provide a service that is functionally equivalent to a “revue
de presse”,
46
ie, a collection of quotations from a range of
newspapers and periodicals.
47
Hence, the importance of distinguishing between copyright-
protected “expression” and “information” that is available
in the public domain.
Germany
48
and Spain
49
have implemented new “ancillary
rights” in their national legal systems, demonstrating that
such rights do not constitute an efficient measure to fill the
gaps and deficiencies along the value chain.
50
45. Kretschmer et al. (2016, p. 6). p. 6.
46. See the French version.
47. Peukert (2016, p. 177).
48. Section 87f-h of the German Copyright Act.
49. Article 32.2 of the Spanish Copyright Act.
50. Peukert, supra note 47.
51. Hilty et al. (2016).
52. Supra note 1, Communication of 2015, 4.
In fact, online distribution of information presupposes a
symbiotic relationship between content suppliers and
other online services, such as search engines and news
aggregators, that enable this content to be more easily
retrieved and accessed.
Most visits to news websites come from users accessing
the page from other online players. Moreover, hyperlinks
coming with snippets make it easier for users to find the
news content they are looking for, thus increasing online
traffic to newspapers.
51
The economic justification behind this reform, therefore,
remains rather obscure. What is missing is an appropriate
and all-embracing assessment of how the RPPP would
actually serve social needs, whilst reflecting market reality.
It is instead argued that the proposed publisher’s right has
clear potential to affect the vast majority of stakeholders
along the value chain.
It seems that the policy response to an alleged non-
functioning market place is the recognition of a right that
will restrict the enjoyment of Internet freedoms, undermine
the visibility of authors and contradict European open
access policies.
This is even more worrisome considering that earlier
experi ments in Spain and Germany have proved unsucc essful.
The same draft Copyright Directive contains two other
highly contentious provisions: Article 13 and Recital 38.
The objective of “sharing the value in the Internet chain” is
a driver in the European debate. In fact, “there is a growing
concern about whether the current EU copyright rules make
sure that the value generated by some of the new forms of
online content distribution is fairly shared”.
52
This has prompted a growing debate on the scope of the
liability exemptions set forth in Articles 12 to 15 of the
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e-Commerce Directive 2000/31/EC (hereinafter “ECD”), and
their application to activities of new players, and on whether
these go beyond simple hosting or mere conduit of content.
53
The Commission’s concerns are twofold. In the first place,
there is a risk that unlicensed online intermediaries, providing
access to aggregated or user-uploaded content (YouTube,
Facebook and DailyMotion), shrink their responsibility, by
claiming the safe harbour immunities without the conditions
for their application, and refuse to negotiate licences with
the right-holders concerned.
This may lead to an imbalance (“value gap”) in the online
marketplace in favour of these “false” intermediaries.
54
On the other hand, “some infringing intermediaries have
refrained from setting up cooperation mechanism with
right-holders, fearing that this intervention would render
them no longer neutral and, therefore, eligible for safe
harbour protection” (“non-sufficiently collaborative”
intermediaries).
55
To tackle the “value gap”, the Copyright Directive imposes
a series of alternative obligations on what it imprecisely
defines as information society service providers that store
and provide to the public access to large amounts of works or
other subject-matter uploaded by their users(hereinafter
“targeted providers”).
56
This definition does not clearly identify the targeted
providers. In particular, the reference to “large amounts
of works” leads to potential ambiguity. It purports to
differentiate Internet giants from small-scale actors, given
that only the former are liable to exert a significant impact
on the online content market.
57
Yet, where to draw the line between large, medium and small
amounts of works remains obscure. As this blurred definition
53. Id.
54. Rosati (2016).
55. Id., p. 4.
56. Article 13(1).
57. Copyright Directive, [2].
58. The question whether it is advisable to substitute the requirement of “large amounts of works” with “user uploaded content” will become
increasingly more crucial. See the Report of the EU Parliament 2016/0280(COD), March 10th, 2017, Rapporteur: Comodini Cachia.
59. Article 1(2) makes no reference to the ECD.
60. Supra note 58.
is susceptible of more than one reasonable interpretation, it
may induce SMEs and start-ups not to grow in the current set
up of the market; should they expand their activities, they
would have to abide by the obligations under Article 13.
58
Moreover, the proposed Directive does not illustrate with
sufficient clarity the notion of providers that “store and
provide to the public accessto copyright-protected content.
This definition appears to be narrower than “hosting
providers” within the meaning of Article 14 ECD (that
consists solely of “the storage of information provided by
a recipient of the service”).
Thus, at first glance, it would be logical to consider that
targeted providers belong to the category of “hosting
providers” under Article 14 ECD and, therefore, are prima
facie eligible for the liability exemption provided therein.
However, the Com mission forgot to specify that the
Copyright Directive should in no way affect existing rules
laid down in the ECD.
59
According to th e report of MEP
Comodini Cachia, it is thus crucial to specify that Article
13 complements, instead of amending, the liability regime
already established in the ECD.
60
Recital 38 of the Copyright Directive adds uncertainty to
an already vague definition, suggesting that: 1) targeted
providers perform an act of communication to the public
within the meaning of Article 3 of the InfoSoc Directive and,
therefore, are obliged to conclude licensing agreements with
right-holders, unless they fall within the liability exemption
under Article 14 ECD; 2) the fact that targeted providers
optimise the presentation of or promote the uploaded works,
irrespective of the means used thereof, is in itself a sufficient
ground for concluding that they are “active providers”,
falling outside the scope of Article 14 ECD.
This provision is open to several important criticisms. In
the first place, the CJEU has not taken a clear stance on
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whether ISPs facilitating access to copyright-protected
works perform an act of communication to the public.
61
National courts have sometimes taken the view that ISPs
could be found liable as secondary or indirect infringers.
62
Moreover, Recital 38 introduces a non-rebuttable
presumption that service providers carrying out certain
types of activit ies (ie, optimisation or promotion of uploaded
content) are not of a mere technical, passive of automatic
nature; this is so “irrespective of the means used thereof
(ie, even if the content is automatically optimised), and
regardless of whether they have actual knowledge or
control over the informatio n they store.63 Such an approach,
however, contradicts the reasoning of the CJEU in Google
v Vuitton
64
and in L’Oréal v eB ay.
65
As for the alternative obligations imposed by Article 13(1),
targeted providers shall: a) in cooperation with right-holders,
take measures to ensure the functioning of agreements
concluded with right-holders for the use of their works or
other subject matter; b) prevent the availability on their
services of works or other subject-matter identified by right-
holders through cooperation with the service providers.
A plausible interpretation of Article 13 is that the obligation
under letter (a), read in conjunction with Recital 38, should
not extend to hosting providers eligible for the liability
exemption under Article 14 ECD, given that the latter are
not obliged to conclude licensing agreements. Thus, for
this latter category of ISPs, the obligation under letter (b)
comes into place.
In order to comply with Article 13, targeted providers are
required to implement content recognition technologies
(such as fingerprinting and watermarking), and to be
sufficiently transparent towards right-holders with regard
to the type of technologies used, the way they are operated
and their success rate for the recognition of right-holders
content (Recital 39).
61. Going in this direction, see the CJEU’s decision in Case C-527/15, Stichting Brein v Jack Frederik Wullems (26 April 2017).
62. For an overview of intermediary liability in the UK, France and Germany, see: Angelopoulos (2017).
63. Id. See also Stalla-Bourdillon et al. (2016a).
64. Joined Cases C-236/08 to C-238/08 (23 March 2010).
65. Case C-324/09 (12 July 2011).
66. Stalla-Bourdillon et al. (2016b).
67. Eriksson (2016).
68. Case C-360/10 SABAM v Netlog NV (16 February 2012).
Thus, the proposed Directive makes it mandatory for service
providers to scan users’ content for protected material by
means of filtering measures (such as “Content ID” developed
by YouTube), and increase transparency, so that revenues that
derive from creators’ content can be more easily identified.
A group of scholars voiced criticism over Article 13, arguing
that it imposes a general monitoring obligation, since it
requires a great number of intermediaries to actively
monitor data of all users.
66
Google’s vice President Caroline Atkinson warned that
YouTube has pai d € 53 million to create its Content I D
software.
67
Thus, the obligation to implement content
recognition technologies may have negative effects for
competition in the market and create barriers to entry.
Moreover, such technologies are not clever enough to access
content and verify whether an exception or limitation to
copyright infringement may apply in a given case.
It follows that the imposition of such broad obligation
as it stands: 1) contradicts Article 15 ECD and the CJEU’s
established case law interpreting it;68 2) is not proportionate
(ie, a measure strictly necessary to achieve a legitimate aim);
and 3) does not strike a fair balance between the protection
of IP (Article 17(2) of the Charter), and other fundamental
rights, enshrined in Articles 7 (privacy), 8 (protection of
personal data), 11 (freedom of expression), and 16 (freedom
to conduct business) of the Charter, that are fundamental
pillars of any democratic society.
Conclusions
Policy options, initially put forward for achieving a DSM,
included the eradication of copyright territoriality by means
of a unitary European copyright title, the recognition of
online exhaustion, and the extension of the Country of Origin
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principle to all online communications. None of these options
have been expressed in concrete legislative measures, but
all have been vaguely postponed to a later date.
The Commission has finally opted for a less ambitious and
more gradual approach to removing obstacles to cross-
border access to content and circulation of works. A number
of specific legislative proposals have been put forward for
this purpose.
I have maintained that the Commission’s initial overarching
aim to tackle geo-blocking was scaled down to accommodate
(the sound) concerns about the potential detrimental impact
on the audiovisual market.
Likewise, the extension of the “country of origin” principle,
set out in the Broadcasting Regulation has a very limited
scope, thus leaving a wide variety of services, for which
consumers’ demand is considerable, unaffected. Although
the proposed reform offers an additional instrument for
facilitating the clearance of rights, overall it does not change
the current scenario to a considerable extent.
In a similar vein, there is a tendency to focus on attention-
grabbing issues, such as cross-border “portability” of
content, which do not offer a real solution to dismantling
national barriers in the European digital environment.
Therefore, I have suggested that a full integration of markets
for creative content online is not likely to happen, at least
in the near future. The call for modernising the copyright
framework resulted in sector-specific regulation, not
necessarily in continuity with the Commission’s vision on
current important policy topics.
The EU legislature has, in fact, reached a compromise, which
limits considerably the overarching goals set forth in the
DSMS.
Moreover, for reasons that I have put forward, doubts
persist as to the opportunity and necessity to introduce
a neighbouring right for press publishers, and impose on
certain service providers what closely resembles a general
monitoring obligation, in conflict with Article 15 ECD.
It is questionable whether the Commission struck a fair
balance between different fundamental rights, such as the
protection of IPRs and freedom of expression.
The Commission adopts terminology (for example “large
amounts of works”) neither technical nor clear and uses
notions that are not harmonised at EU level (“the country
of habitual residence”).
On the other hand, I value the adoption of Regulations in
the field of copyright and related rights, entailing a deeper
level of harmonisation.
Moreover, the provision of mandatory exceptions and
limitations, such as the exception for TDM, is to be welcome.
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IDP no. 26 (February, 2018) I ISSN 1699-8154 Journal promoted by the Law and Political Science Department
Eloi PuigEloi Puig
Jose R. Agustina
www.uoc.edu/idp
Universitat Oberta de Catalunya
58
Eloi PuigEloi Puig
Digital Single Market: a long way to go
Viola Elam
Recommended citation
VIOLA, Elam (2018). “Digital Single Market: a long way to go”. IDP. Revista de Internet, Derecho y Política.
No. 26, pp. 43-58. UOC [Accessed: dd/mm/yy]
<http://dx.doi.org/10.7238/idp.v0i26.3111>
The texts published in this journal, unless otherwise indicated, are subject to a Creative
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permitted. The full licence can be consulted onhttp://creativecommons.org/licenses/by-
nd/3.0/es/deed.en.
About the author
Elam Viola
viola.elam@eui.eu
PhD candidate
European University Institute
Degree in Law (“Laurea Magistrale”) from the University of Florence, School of Law. In September 2012,
she was selected for an 8-month traineeship at the Brussels branch of the Italian law firm “Chiomenti
Studio Legale”. In the academic year 2013/14, she completed an LL.M. in Intellectual Property Law at
Queen Mary University of London. Last academic year she was been awarded a merit-based scholarship
to attend a one-year LL.M. programme in European, Comparative and International Laws, at the European
University Institute in Fiesole. She is currently a second year PhD student at the European University
Institute, researching on the IP implications of 3D printing.
European University Institute
Badia Fiesolana - Via dei Roccettini 9,
I-50014 San Domenico di Fiesole (FI) - Italy