Article 17: Closing the Value gap – Where Are We Now?

The European Union’s Copyright Directive, specifically its contentious Article 17, was supposed to revolutionize the relationship between online platforms and rights holders. It was going to close the value gap and make social media platforms finally take down or pay for all the copyrighted content they were up to now, getting for free. The  European parliament voted and approved it on March 26, 2019. But several years and a global pandemic later, the implementation landscape is… messy.

What is Article 17 Again?

For those needing a refresher, Article 17 (now renumbered as such in the Directive (EU) 2019/790 on copyright and related rights in the Digital Single Market) essentially shifted the liability for copyright infringement from users to online platforms that host large amounts of user-uploaded content (think YouTube, Facebook, TikTok, etc.). Platforms are now required to:

• Obtain authorization from rights holders to host copyrighted material. This typically means licensing deals.
• Act expeditiously to remove infringing content when notified by rights holders.
• Make “best efforts” to prevent unauthorized content from appearing in the first place. This is where the controversial “upload filter” debate comes in, as many feared it would lead to automated censorship.

Implementation: A Patchwork Quilt of National Laws

The EU Directive model means member states had to “transpose” Article 17 into their own national laws. The deadline was June 7, 2021, but as expected, not everyone made it. Here’s a snapshot of the current situation:

• Fully Implemented: Countries like France, Germany, Netherlands, Hungary, Italy, and Malta are considered to have fully implemented Article 17. However, “fully implemented” doesn’t mean identically implemented. There are variations in how each country has interpreted key aspects of the directive.
• Partially Implemented: Many other countries fall into this category. They may have transposed parts of the directive but not all, or their laws might still be undergoing legal challenges. Denmark, Finland, and Sweden are notable examples, where the implementation was significantly delayed.
• Still in the Process/Delayed: Some countries are still working on it, facing internal debates or legal hurdles. These delays are causing uncertainty and frustration for both rights holders and platforms. As of late October 2023, Croatia, Cyprus, Czechia, Estonia, Greece, Ireland, Latvia, Lithuania, Luxembourg, Poland, Portugal, Romania, Slovakia, and Slovenia have not fully implemented it, or have not notified the EU commission on the completion of the implementation process.

Consequences of Non-Compliance: The EU has a system in place to deal with countries that don’t implement directives properly. This can involve formal notices, reasoned opinions, and ultimately, referral to the Court of Justice of the European Union (CJEU). In July 2023, the European Commission took this step, referring Czechia, Ireland, Romania, Poland, and Slovenia to the CJEU for failing to fully transpose the Copyright Directive. These cases are currently ongoing, and it may take a year or more before final judgments are issued. If found in violation, these countries could face substantial financial penalties.

Poland even filed a lawsuit against Article 17 at the European Court of Justice, arguing it threatens freedom of speech (the court ultimately upheld the Article but stressed the need for safeguards).

The Million Dollar Question: Who Pays Who?

This is where things get even more complex. Article 17’s goal was to close the “value gap” and ensure rights holders get paid, but the mechanisms for doing so vary:

• Licensing Deals: The most common scenario is platforms signing licensing agreements with collective management organizations (CMOs) that represent large groups of rights holders (e.g., music labels, publishers). For instance, YouTube has expanded its deals with various CMOs across Europe. Some CMOs offer coverage for photographic works, but it is limited,  the distribution opaque, and not comprehensive.
• Direct Licensing: Platforms might also negotiate directly with individual creators or smaller rights holders. It doesn’t seem to be happening.
• Content ID Systems: Platforms like YouTube rely heavily on Content ID, their automated system that identifies copyrighted material and allows rights holders to choose whether to block, monetize, or track it. This system was in place before Article 17 but has become even more crucial in the post-Article 17 world. Equivalent exist on the Meta platform and works with still photograph, but it is far from being universal and well implemented.
• Remuneration through new laws: France, being one of the forerunners, has paved the way for online platforms to negotiate with press publishers on the remuneration for the reuse of their content, implementing the “related rights” part of Article 15 of the Directive. This is being closely watched by other EU members and other groups of rights holders because it could lead the way to a similar implementation for Article 17.

The Challenges and Controversies

Article 17’s rollout hasn’t been without its share of drama:

• “Upload Filters” and Over-Blocking: The fear of automated filters leading to over-blocking of legitimate content (like parodies or fair use) remains a concern. While many implementations include safeguards, the balance between preventing infringement and protecting freedom of expression is still a delicate one.
• Transparency and Disputes: How much are platforms paying? How are royalties calculated and distributed? These questions are often shrouded in secrecy, leading to disputes between platforms and rights holders.
• SMEs and Individual Creators: There are concerns that smaller creators and independent artists, especially in the visual arts, might get lost in the shuffle, with the bulk of licensing deals benefiting larger players.
• The Platform-Specific Approach: Each platform has its own way of dealing with Article 17, leading to a fragmented and confusing landscape for creators who often use multiple platforms.

The Specific Challenges for Visual Artists

While Article 17 holds promise for all creators, visual artists face unique hurdles:

• Weaker Collective Representation: Compared to the music industry, the collective management landscape for photographers and photo agencies is more fragmented, potentially weakening their bargaining position.
• Image Recognition Technology: While improving, image recognition technology is still not as advanced or widely implemented as audio recognition, making it harder to track and manage visual content. Although invisible watermarking offers a possible solution, building a searchable universal registry to store copyright information is impractical due to the high costs and extensive time commitment.
• Lack of Direct Monetization: Few platforms offer robust systems for visual artists to directly monetize their work, unlike the established models for video creators. And don’t seem to be wanting to do so.

Platform Actions: Too Little, Too Late?

Platforms like Meta (Facebook & Instagram) have introduced tools like “Rights Manager” with image-matching capabilities, but their effectiveness and accessibility for individual photographers are still questionable. YouTube‘s Content ID, while powerful, is still primarily geared towards audio and video. Other platforms like TikTok, Pinterest, and X offer limited tools for copyright management, mostly relying on reactive takedown procedures.

The Future of Article 17

Article 17 is still a work in progress. As more countries fully implement the directive and as case law develops, we’ll get a clearer picture of its long-term impact. What is clear is that the relationship between online platforms, rights holders, and users has fundamentally changed. The cases currently before the CJEU will be crucial in shaping the future of copyright enforcement in the EU. The outcome will determine not only the obligations of member states but also the potential financial consequences of non-compliance. For visual artists, the fight for fair compensation and control over their work online continues. Stronger collective representation, improved platform tools, and continued advocacy will be essential to ensure that Article 17 delivers on its promise of a more equitable digital environment. 

With generative AI, the landscape is evolving in ways that could either weaken or strengthen the bargaining power of authentic, original content. On one hand, the abundance of AI-generated alternatives might devalue original works, making them less essential and thus weakening their bargaining power. On the other hand, as audiences and platforms seek to distinguish authentic content from synthetic creations, the value and importance of verifiable originality could increase, potentially strengthening its bargaining power.

The story is far from over, and the coming years will be crucial in determining whether Article 17 achieves its goal of creating a fairer and more sustainable online ecosystem for creators and rights holders.