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EC’s safe harbours report leaks as YouTube music chief hits back

By Chris Cooke | Published on Friday 29 April 2016

The debate about safe harbours continues unabated, with numerous music industry execs and veteran artists speaking out in recent weeks against the laws that enable opt-out streaming services, with most now going on an all-out offensive against YouTube in particular, rather than just including the video site in a list of other safe harbour dwellers.

As much previously reported, the safe harbours of US and European law say that internet companies are not liable if their customers use their servers and networks to distribute copyright protected material without licence, providing the net firm has some sort of takedown procedure in place. It means that YouTube isn’t liable when its users routinely upload music without permission from the label or publisher, because Content ID allows the rights owner to block or monetise the offending tunes.

But, say many music companies, Content ID is only effective to a point, meaning that keeping your content entirely off YouTube is a labour intensive task. Which means a lot of unapproved music content stays on there. Which strengthens the Google service’s negotiating hand when agreeing licensing deals with the music industry.

Which, of course, is why the music industry wants safe harbour rules rewritten so that services like YouTube no longer benefit from them. Copyright rules in Europe have been under review for a while, and the US Copyright Office instigated a specific review of safe harbours late last year. It’s as a result of the latter that a flurry of notable artists have spoken out against YouTube in recent weeks.

Meanwhile, back in Europe, the European Commission is busy preparing an update on its ongoing Digital Single Market project, which includes the copyright and safe harbours review. And yesterday a draft of that update leaked via Politico.

In it, the Commission makes it clear that it has no ambitions to radically overhaul the E-Commerce Directive from which the European safe harbours stem, though there is talk about ensuring a “fairer distribution” of the value of user-upload sites and introducing some EU-wide standards on takedown systems.

The draft report begins: “Although the present intermediary liability regime, as set out in the E-Commerce Directive, was designed at a time when online platforms did not have the scale they have today, it created a regulatory environment that has considerably facilitated their scaling up … The public consultation showed strong support the existing principles of the E-Commerce Directive”.

Though, it does then concede that there is nevertheless “a need to clarify certain concepts, including the scope for the safe harbour for intermediary liability, including for online platforms”. This will be achieved, the report reckons, with “sectorial legislation, on the basis of maximum harmonisation and a problem-driven approach, without prejudice to the E-Commerce Directive. This is particularly the case for ensuring a fair allocation of revenues for the use of copyright-protected content”.

So what does that all mean? Well, “while [user-upload] services are attracting a growing audience and gaining economic benefits from the content distribution, there is a growing concern as to whether the value generated by some of these new forms of online content distribution is shared in a fair manner between distributors and the right holders. In their replies to the public consultation, right holders across several content sectors reported that their content is increasingly used without authorisation or through licensing agreements which, in their view, contain unfair terms”.

So what’s to be done? “In the next copyright package, to be adopted in the autumn of 2016, the Commission will aim at ensuring fair allocation of the value generated by the online distribution of copyright-protected content by online platforms whose businesses are based on the provision of access to copyright-protect material”.

Which is wonderfully ambiguous. What the music industry really wants is YouTube to be held liable for all the unlicensed content on its platform so that Google would have to invest the time into removing unapproved files from its servers. This would mean that the music industry could demand better terms – which mainly means more minimum guarantees in addition to the existing revenue share arrangement – because without the labels and publishers on board, Google would be left with an awful lot of monitoring work to do.

But the EC’s talk of finding a better way to allocate the value of online distribution doesn’t sound anywhere near so draconian.

Meanwhile, another EC priority is reviewing – again – whether there should be EU-wide standards for the takedown element of safe harbours, something YouTube would probably welcome given that, for all its limitations, Content ID is one of the best takedown systems out there.

“The Commission will continue to review the need for formal notice-and-action procedures during the second half of 2016”, says the draft report. “Taking into account the effect of the updated audio-visual media and copyright framework on illegal content online”.

It remains to be seen what the final version of the EC’s Digital Single Market report looks like, and what impact it has on the music industry’s lobbying efforts in Brussels. Though the YouTube-bashing seems set to continue, as does YouTube’s recently stepped up efforts to fight back in the war of words, which this week included an article by the firm’s Head Of International Music Partnerships, Christophe Muller, in The Guardian.

“The truth is that YouTube takes copyright management extremely seriously”, he wrote. “And we work to ensure rightsholders make money no matter who uploads their music. No other platform gives as much money back to creators – big and small – across all kinds of content”.

He went on: “Today, thousands of labels and rightholders have licensing agreements with YouTube to actually leave fan videos up and earn revenue from them. They agree that a world in which fans express love for their favourite artists by uploading concert footage and remixes is something to be celebrated. And they see that fan-uploaded content can be a way to drive exposure and boost sales”.

Read Muller’s article here, and the leaked EC report here.