Who benefits, in the end, this European copyright reform?

There are two rules on which everyone’s attention is polarized: art. 11 on ancillary rights, which would enable publishers to demand payment whenever an article, or even a short excerpt of it (the so-called “snippet”) is published on the web, irrespective when this is done simply to quote the article or to make it more accessible from the Internet chaos through a search engine; and then art. 13, which aims to facilitate licensing agreements between sharing platforms and content owners, in relation to content shared by users. In the absence of such licensing agreements, there would be an obligation to adopt “appropriate measures” to ensure the “non-availability” of such non-licensed content on the platform, even if they are posted by third parties, and not by the platform. The rule, with a tortuous and Byzantine text, avoids talking about preventive filters, since these technological tools would risk, in principle, to be illicit according to European jurisprudence (Sabam and Netlog cases). The European Parliament thus develop a kind of new-language, trying to name with different words what cannot be said. But there is no doubt that preventive filters are involved by this article, since the mechanisms of ex-post removal already exist under European legislation, while the compelling demands of the content industry have always been directed to ask for an active and preventive involvement by of online platforms. If the law passed, therefore, legal battles would start to make preventive filtering mechanisms possible, while not being named in this way to avoid to contrast with the European court. So, we are in full new-language.

From the above rules we extract two very important common elements: first, that the main target of the new legislation is Google (more than the American platforms in general,) that operates as Google News in the case of art. 11 and as Youtube in the case of art. 13; second, the proponents firstly claim from Google (and then from others, if there will be) a sort of economic compensation for the c.d. “Value gap” that would be, according to some of them, the gap between what is generated by creative content on the web and how much is returned to those who hold rights.

The first subject, that of Google as a target, reflects an understandable battle which is however conducted with wrong weapons and, in addition, with the risk of creating collateral damages far worse than the potential benefits. Where some national states (Germany and Spain) have anticipated the measure of art. 11, Google responded with de-indexing news in concerned countries, in order not to pay the unexpected tax. As a result, publishers have asked to give up the tax but in general the impact on online operators has been heavy, because not everyone can afford to do what Google does, that is to close a business. And here the real problem emerges, namely the dominant position of Google, whose services are essential to the Internet ecosystem, including newcomers such as publishers who moved from traditional press to the online dimension.

Google appears dominant even when it operators like Youtube and, should the provision on filters and licenses under Article 13 be approved, it should not do much: Gioogle has already developed an ad hoc technology, the c.d. Content ID costing millions of bucks, and is therefore well equipped to resist the worst scenario. But could all the others do the same? Google already has few competitors but with the new legislation it will not have any more, because nobody could afford to develop a technology like that of Content ID on infinitely lower scales. For the few of them it would only remain to pay content providers, but in the end the tax would apply to the ones with poor wallets, not Google certainly.

Then there is the argument of the value-gap. Here too the battle is understandable, but still one should consider whether the problem is approached in the right way. The digital revolution had an overwhelming effect on consolidated business models: a clear example is the music market, which came out completely transformed by the Internet devolution, from the small shops selling CDs for 30 euros to online music stores offering everything in streaming at flat rates. In telecommunications there was a similar process: from phone calls and SMS at a high price we moved to Skype, WhatsApp and flat rates. In both cases, the traditional owners (i.e. recording companies and large telcos) did not like the change, but they know that back to the past is now unthinkable: technology does not allow it and consumers do not want it.

For publishers and content providers, a similar dilemma arose: resisting the digital devolution or embracing? At the end, they have opted for a conservative and anti-historical position, thanks above all to the help offered by the European Commission lead in last years by the German Oettinger (a commissioner who appeared sympathetic to the problems of the great German publishers ): so, despite the disruptive power of technology, publishers have invented a sort of reimbursement ex-lege that, moreover, creates more damage to the online industry in general (especially the European one, made up of dwarfs and start-ups ) rather than large American platforms.

In truth, the change created by the digital revolution should be controlled and exploited, rather than suffered passively, even when submission may seem less bitter because legislation grant some small amounts of repayment. This is a solution that could benefit some quarterly profit & loss statements, but only for a short time, since it could not be a structural solution.

The real problem of the value gap is why the wealth created by digital revolution remains in the hands of a few operators, as in the case of the accumulation of capital in 1800 AD. The problem is not the value gap itself, but its concentration. On this theme, the European copyright reform completely misses the target but, on the contrary, lays the foundations for a consolidation of online monopolies giving them, paradoxically, also a sort of mediation power on the circulation of information (as warned by the Italian Data protection chair, Antonello Soro).

So, who benefits from this copyright reform?