EU Directive On Copyright in the Digital Single Market: Three Not-So-Scary Possibilities

When evaluating the EU Directive on Copyright in the Digital Single Market, there are three general categories of outcomes: Little/no impact, Moderate-but-endurable Impact, Apocalyptic/Catastrophic. It turns out that there are pros and cons to each.

NOTE: Here I consider the DCDSM in the context of arts and entertainment, with a particular focus on user-generated content production. I note at the outset that I suspect there is a very different analysis for the impact of this directive on news media and news dissemination.

 

1. Little-To-No Impact

EU Implications

As a directive, this passing of the DCDSM does not accomplish much. The directive is only an edict that member states must pass their own laws that accomplish the general purposes of the directive. The first question the DCDSM poses, then, is how different nations will approach this directive.  Some nations might do very little, passing only milquetoast legislation and then neglecting to enforce it. Other nations may openly and pointedly refuse to comply with the directive, daring the EU to take punitive measures  against the non-compliant nation. Each country will have to decide how to balance the force of the directive (which is, itself, of debatable strength) with the risks of losing access to some major technology platforms.

Each nation is surely aware that there is a question of whether companies would rather cease operations in countries whose requirements are too onerous. Twitter or YouTube may find that the cost of meeting a nation’s copyright requirements outweighs the benefits to the company of continued operations in that nation. There is a bold example of this behavior in recent memory: When China demanded too much from Google with regard to censorship, access to user’s email and other data, Google simply decided to discontinue operations with the largest consumer base in the world. If Germany asked Twitter to pay for each link that users disseminate through their service, Twitter might prefer to avoid that tax by no longer offering Twitter to Germany.

 

US Implications

Another of the looming questions that this directive poses is whether there will be implications for non-EU jurisdictions. When the EU passed a law that increased user data protections, many companies restructured their data privacy systems across all regions. Some companies might consider a similar approach when faced with the DCDSM—it is sometimes easier to structure a business model to meet the highest requirements placed on the business. Many companies have struggled to navigate copyright claims (and data privacy, consumer protection, and advertising laws) in the wild frontier of user-generated content and digital media. They may see new, stringent laws as an opportunity to approach these problems with new tactics—though companies will have to consider whether their tactics will obliterate their business.

2. Moderate-But-Endurable Impact

In some ways, this is the worst for users and the best for large stakeholders.  This outcome keeps YouTube and Twitter afloat, imposes inconvenience and malcontent on users, but the obstacles are just minor enough to navigate. Maybe YouTube and Twitter charge a small subscription fee to cover their increased costs (not unlike Netflix or Hulu). Maybe the large, familiar platforms lose some of their functionality, but not so much functionality that the platform feels entirely transformed. Under this scenario, most of the things that most users do still mostly work, and therefore the overall satisfaction of the user base is only slightly lessened.

 

 

3. Apocalyptic, Catastrophic Annihilation of Social Media As We Know It

Histrionic

People who have the most to lose in the worst-case scenarios are beyond deeply concerned. The reaction of content creators on YouTube seems to be that this is among the worst things to ever happen for their business model. These people consistently cite existing problems with YouTube’s ContentID system and the copyright strike system as the basis for their concern (and moderating content on a social media platform is no easy task), and predict that this law will exacerbate those existing problems. Their reasoning is that YouTube has already demonstrated the challenges involved in trying to regulate copyright claims on YouTube: algorithms get things factually wrong, there is no presumption of de minimis use, journalism and parody uses are rarely recognized, etc.

The Way Forward

The worst case scenario that content creators fear is the death of the major platforms: YouTube, Twitter, Facebook (and subsidiaries like Instagram), will all lose economic viability or become so difficult to use in meaningful ways that users will abandon them, and the internet itself will die as a direct result. I see plenty of alternatives to the death of the internet (that’s something I expect the telecommunications industry to achieve before anyone else), even granting a severe impact to the operations and function of major (and minor) platforms.

A key fact about the internet is that users will always find ways to navigate the new space. The internet is a battleground for a particular kind of warfare: a fight in which new strategies are always being discovered. New platforms rise to replace old ones (no matter what the reason for the death of the last one was).  New methods and systems are born out of the effort to get around whatever obstruction frustrated the users.

Users will find ways to continue their current behavior, working around the impositions of the new laws. Not allowed to Tweet a link? Users will develop a new system for pointing people to information (humans have been creating systems for this purpose for millennia). Not allowed to stream a video game with a song it? Sing over it. Users are creative: successful content creation in the new environment makes creativity an imperative. The large copyright holders may one day (if not this time around) live to regret promulgating too draconian of an edict of creativity.

 

3A. The Backfire Scenario, Or, The Poetic Justice of Getting What You Ask For

“Success is a menace. It fools smart people into thinking they can’t lose.” – Bill Gates, as depicted in Pirates of Silicon Valley

One likely response to the DCDSM is that users will create more of their own content. If using existing content becomes prohibitively difficult, more users will create what they cannot afford. This will have a detrimental effect on the stakeholders who expect to gain the most from the new laws: the rights holders of existing popular works. These stakeholders have felt for decades that the internet was undermining their profits by allowing people to access movies and music without paying for it. As users create original content instead of incorporating these existing works, the works of the larger establishments will enjoy less dissemination and recognition by the public. The audience for these works will shrink as fewer people are exposed to their works. Large corporate stakeholders will need to invest more in advertising campaigns to acquaint the public with their products; they will try to replace what content creators were doing (for free and more effectively) for them.

For most of the 20th century, large corporate rights holders had every reason to think that they were indispensable—that they were the only way that people could access arts and entertainment. The Napster case demonstrated that the internet had the power to undermine their channels of distribution. User-generated content is the current argument that the content itself can also be produced outside of the control of these large stakeholders. If the DCDSM sparks an apocalypse of the current generation of UGC platforms, the phoenix that rises from those ashes is surely the end of the 20th century entertainment business model. In this scenario, users truly leave the large rights holders behind.

 

Conclusion: Probably Not Really That Bad For Art and Entertainment

Everyone will have to wait and see what form the Directive takes as it influences national laws. I think this is the kind of law that the internet is ready to work around. If it has devastating effects on existing platforms and services, I am quite sure that new platforms will emerge that promote entirely original content, unshackled from existing copyrighted content. The emergence of new solutions is the story of the internet.