European creativity and digital economy are drowning in a copyright swamp

Statement by Andrus Ansip, Vice-President of the EC, on the modernization of copyright in the European Union, new rules of transparency and fairness for online platforms and prior agreement on the Digital Europe Program. Photographer: Lukasz Kobus.© European Union, 2019.

This article was written for The European Sting by one of our readers, Professor Dr. Mindaugas Kiskis at Mykolas Romeris University, Lithuania. The opinions expressed within reflect only the writers’ views and not The European Sting’s position on the issue. 

The EU copyright reform needs just one last approval by the European Parliament. It is bulldozer driven by the copyright incumbents and euro-bureaucrats serving them, who are determined to make it happen at all costs. Although days remain to the current term of the European institutions, the EU copyright reform is fast-tracked for the final vote of the European Parliament on March 26, 2019. Official European Parliament accounts trumpet the new dawn already, despite the votes yet to be cast!

To name this reform a copyright reform is a shame to the real authors and the public. The authentic name would be the rescue package of digital losers at the expense of European creativity and consumers. European creativity and digital economy will be happily crushed for the sake of profit of the incumbent copyright landlords.

To recap the key critical points of the EU copyright reform:

Article 3 brings further marginalization of copyright exceptions, which are already minimal in Europe; it introduces restrictions on access to copyrighted content (data) if you are an ordinary citizen or entrepreneur.

Article 11 is yet another expansion of copyright for the protection of digital press publications granted to publishers (but not to authors!) for a period of 20 years and with a warranty of “fair remuneration”. In other words, it means the introduction of the new levy or tax to appease the copyright landlords.

Article 13 legalizes censorship to ensure that we – consumers – do not enter into the domain of copyright landlords even inadvertently.

Most of these copyright landlords tended by the reform happen to be digital losers – such as the recording industry, old school media and publishers, a swamp of collective management associations and other intermediaries who are stuck in the 20th century but are trying to maintain their income at any cost. Analog dinosaurs in the digital world don’t want to change and refuse to go.

There is no doubt that the copyright system, like the entire intellectual property system, is in crisis. It was never designed to regulate the digital content. It needs reform, but the reformers have to ascertain the purpose of the system first. The purpose of the classical intellectual property systems (i.e. the reason why it is accepted worldwide as a tool for promoting creativity / innovation) is that it only rewards creativity that meets a demand on the free market. Copyright does not guarantee a financial reward – if your work is crappy and worthless, hold on to your copyright, but we are not paying for it.

All problems begin when the copyright holders start to regulate themselves (especially the intermediaries that represent them), and the pursuit of reward driven purely by greed rather than creativity begins. Why do they need the unpredictable free market and capricious consumers, if they can claim “fair compensation” for just holding on to their copyright?! Just disguise greed with fancy slogans like “value gap” and pretend to care for the poor authors.

In this way, the European copyright has gradually become a fundamentally Soviet-style scheme for the absorption (or at best redistribution) of taxpayers’ money. The result is the stagnation of creativity and content businesses  in Europe. Countries where copyright policy is unhindered by Soviet inclinations – the US and some Asian countries – are increasingly overtaking Europe on the digital economy.

Unlike many Europeans, I had experienced the Soviet copyright first-hand. For the uninitiated the Soviet copyright is characterized by:

• Expropriation of economic copyright, in the name of the authors.
• Forced collectivism – the rights of an individual author to make business decisions on key uses are taken away.
• Funding by taxpayers, not by actual users of copyrighted content.
• Focus on redistribution rather than on royalties for a particular use.
• Financial rewards and privileges for authors are detached from the market value.
• Compensation claims are not based on the specific uses of copyrightable content, but on mere possibility to access the creative content – in Soviet Union we were prescribed to purchase certain carefully selected copyright works.

Soviet copyright policy is also characterized by:

• Stagnation – not looking for new ways to commercialize creativity, but aims to maintain incumbent system at all costs.
• Prohibitions and restrictions – e.g. copyright exceptions (uses, which do not need permission from the rightholders) are reduced to a strictly limited list, everything that is not on the list is a copyright infringement.
• No transparency and lack of accountability – who cares who actually gets the money, right?
• Ideological fundamentalism – if you are not for the system, you are an enemy – anti-author and pirate.

In small countries, such as Lithuania, additional distortions are also common – for example the rights to works financed from the public resources are fully appropriated by the intermediaries. Public funding for the creativity (movies, books, works of art) is treated as a property, not as an investment. Have you seen an investor who would give up all rights to an investment and would not expect any return? This is a definition of charity, but purpose of charity is to help those in a real need and not to enrich someone. I am not suggesting that the taxpayers shall be entitled to use publicly funded works for free, but public funding shall serve public interests instead of resulting in exclusively private copyright, which benefits the holders only. For example, part of the profit from a work, financed by public funds shall be repurposed for the support of new content.

The copyright swamp is absolutely uninterested in the new creativity, because it first of all means competition for themselves. Copyright swamp is only interested in money, or, better still, more of it under a “fair compensation” pretence.

This is what is happening in the EU disguised as a copyright reform.

What can we do to restore the authenticity of copyright in Europe, and to promote new creativity and the digital economy? Here are my suggestions:

• Copyright requires a real reform, which must be shaped not by the analogue generation. In too many countries the copyright regulators are from the swamp or cosy with it. People hostile to the digital technologies cannot be in charge of regulating digital economy.
• Copyright policy must be shaped by all actors of the digital content economy, not just outgoing rightholders/intermediaries who have failed to adapt to the digital economy – digital losers.
• The voice of the next generation (digital content) creators and consumers-creators must be taken into account.

Specific and urgent reforms that are needed the most:

• Recognition that each of us is both a digital content creator and a digital content user shall be at the heart of the reform.
• Nothing is created on a void, therefore real and sweeping copyright exceptions have to be restored.
• Limiting of the non-commercial exceptions shall only be allowed in exchange for lesser copyright protection.
• Individual rights management must be enabled.
• Geoblocking and other artificial barriers to digital use must be banned.
• Predatory content commercialization practices (e.g. monopolistic and not transparent practices) must be restricted.
• Consumer and taxpayer funded handouts (fair compensation) to the intermediaries must be eliminated; these may be replaced with statutory royalties focused on specific uses and awarded to the original creators only.
• The copyright system must stop the privileges of the intermediaries, i.e. intermediaries should not have additional rights and safeguards simply because their business object is copyrighted content. Priority must return to authors and new creation.

There is no doubt that the creative economy faces challenges in the context of digital transformation (such as piracy), as well as social problems (such as the decline of old business models and resulting social security problems for the older generation authors), but these problems are largely unrelated to copyright. There are other tools to address these challenges, and they shall be addressed not at the expense of new creativity.

A lot of content, especially cultural one that the mass consumers cannot appreciate is already supported by both public and private resources – scholarships, bonuses, grants, etc., as it was for hundreds of years before copyright has arrived. For once, digital content entrepreneurs are also coming up with new solutions. For example, film and book piracy is solved by the dynamic content (transforming the user, the reader into an actor). Copying of the dynamic content becomes meaningless, since the copy eliminates user participation.

Social challenges may be addressed in other ways, such as re-education, targeted grants and social guarantees for content creators, etc. It is important that these tools are not abused and choked by the copyright swamp (they must be strictly separated from the rightholder bias, collective administration, etc.).

Although these copyright issues seem complex, distant and unrelated to everyday life, in the digital consumer-creator economy they affect all of us, and especially the younger generation. If history teaches anything – the Soviet copyright and larger economy succumbed to the market forces in a violent way. For the sake of creativity and digital future – wake up Europe!