EU reforms: the clock is ticking!

Time is running alarmingly short and the pressure to complete several ambitious reforms in the EU is increasing exponentially. In 2019, a new Commission will be sworn in and post-Brexit elections may fundamentally change the current political ecosystem in the European Parliament. MEPs will soon be focusing more on their re-election that on getting things done in Brussels. Not an ideal time to be rushing through some highly contentious new business but, unless it is done, copyright reform, as well as the modernisation of the media and broadcasting regulatory framework, may well be dropped for years to come.

Not that it would necessarily be entirely a bad thing. The revision of the satellite and cable directive, threatening to extend the country of origin principle to all online broadcast content and expanding the mandatory collective management of simultaneous retransmission rights beyond cable, has been fiercely criticised for breaking up territorial licensing and jeopardizing the long-term sustainability of the audiovisual sector. Its second objective is also undermined by direct-injection technology, which the Court of Justice recently defined as one act of communication to the public and not retransmission. The new regulation may thus well end up being irrelevant at best, irresponsible at worst. Having approved their respective mandates, the Council, Parliament and Commission are now meeting in "trilogue" (Euro slang for "tripartite dialogue"), a completely opaque negotiation phase where compromises are struck behind closed doors and beyond public scrutiny. The Parliament is in a very uncomfortable situation, having settled internally for a very narrow extension of the country of origin principle only to news and current affairs. The Council, on the other hand, wishes this principle to also apply to the online distribution of content fully owned and controlled by the broadcasters. This could, potentially, also extend to commissioned works and include most audiovisual broadcast content. With its ultra-liberal proposal, the Commission is sticking to its guns, heavily lobbying its co-legislators to complete the Digital Single Market, get rid of geo-blocking and any form of territorial licensing, arguing that consumers must access everything, from everywhere and at any time. Meanwhile, the Parliament unexpectedly brought in "direct injection" in its report and, at this advanced stage of the negotiation, neither the Council or the Commission seem comfortable with it. The Parliament proposal is not entirely unhelpful but it regrettably does not address the problem from the right angle. It builds on the EU case law to argue that broadcasters and distributors should be jointly liable for the licensing of content through direct injection. A legal fiction, establishing that direct injection is, for the purpose of the regulation, equal to simultaneous retransmission would have made a lot more sense. It would have justified extending statutory collective management beyond cable, safeguarding a precious source of income for stakeholders. As it looks now, this mechanism is being extended… for nothing, as direct injection has become the overwhelming technical practice. Trilogue needs to deliver a compromise before the end of the year. Arguably, in this case, few will complain if it does not.

On the copyright front, progress is painstakingly slow. Informal compromise agreements between the main political groups in the European Parliament are constantly challenged and reopened and the landscape is very uncertain. Things that should have been out for good keep creeping in through the back door, requiring constant monitoring, striking and parrying.

Having gone though most of Chapter III in the draft directive (i.e. articles 14 to 16, addressing the contractual remuneration of authors and performers), the Parliament is now fiercely debating press publishers' rights and the licensing of content on video sharing platforms. Things are not looking too promising for the time being, with the rapporteur, MEP Vöss (EPP), suggesting amendments that are even more inflammatory than the initial Commission proposal.

On Chapter III, fingers crossed, some tentative improvements are worth mentioning: a sweeping exception to new transparency obligations when performances are deemed "not significant" appears to have been scrapped from article 14. Furthermore, these obligations should now also be extended to all sub-licensees and reporting obligations in collective agreements, where equivalent in nature and scope, are acknowledged as a valid industry alternative. Collective representation, including by trade unions, should also be acquired when filing a contract adjustment claim or requesting an alternative mechanism to settle a dispute around reporting, transparency and revenue. Equitable remuneration for making available on demand, the focus of the Fair Internet campaign, is however not yet in sight. This is very regrettable, as most performers are not likely to get substantial benefits from the directive, unless it also taps them directly into the revenue of streaming and downloading platforms, through mandatory collective management. The political compromise has not yet gone beyond a bland statement that the remuneration of authors and performers must be fair and proportional. This may serve as a decent introduction to the transparency and contractual provisions in the draft directive, but is not going to put money in the pockets of all performers.

MEPs are expected to come back to this provision at a later stage, once things clear up with respect to article 13 and the "value gap" between YouTube-type platforms and content owners. Regardless of how this article will finally shape up, the value gap between performers and producers is likely to persist, unless bold measures are taken to make sure they get an honest share of the online market revenue. With a rather apathetic Council, the best chances of getting something promising for performers out of the trilogue "black box" lies on a strong Parliament report, uplifting the rights of creators. As the lead committee (JURI) vote keep slipping further on and is getting dangerously close to the summer break, the clock is definitely ticking.