Mind the value gap! Article 13 of the EU’s new Copyright Directive poses challenges for video games, gameplay sharing platforms, and content creators

Written on 26 Mar 2019

Since the first draft of the EU's proposed new Copyright Directive was published, there has been much of discussion about Article 13, with publishers of games which rely on user-generated content, gaming influencers, and gameplay sharing platforms all taking an interest. We previously wrote about the European Commission's proposed new Copyright Directive here.

Article 13 forms a key part of the EU’s digital single market strategy. It aims to fix what is often referred to as the perceived “value gap” between content sharing providers and content creators: i.e. the idea that content sharing providers receive significant economic benefit from unauthorised sharing of copyright protected content owned by third parties, while the rights holders themselves receive comparatively little economic benefit. The solution proposed by Article 13 is to make content sharing providers more accountable for protecting the interests of rights holders.

Article 13 has come under fire from both content creators and content sharing platforms. Content creators have stated that it could result in lawful content being flagged for take down. The grass roots content creator community (which has a strong representation among the gaming community) has campaigned that Article 13 amounts to an attack on freedom of speech and could result in a “meme ban”. Their concern is that the way in which automated content ID systems works will automatically result in certain lawful content being flagged as infringing. In particular, content which falls within an exemption from copyright, such as the “caricature, parody, pastiche” exemptions , (which could include for example, some types of viral memes, which incorporate third party content) or the exemption for fair dealing, could be wrongly flagged as unlawful.

Content sharing service providers are also unhappy with Article 13 on the basis that it could stifle creative freedom, discourage the creation of user-generated content, and result in an unrealistic pressure to police. It has also been argued that the existing law already works, on the basis that copyright holders already have control over content via the tools and take-down mechanisms already offered by the content sharing service providers.

The final text of the Copyright Directive was approved by the Council of the EU on 15 April 2019. Once published in the Official Journal of the European Union, each EU member state will then have two years to transpose it into national law.

Being the perfect host is no longer enough

In the past, content sharing service providers have been able to rely on the so-called “hosting defence” to share copyright protected content without permission. The hosting defence is included in Article 14 of the e-Commerce Directive . The hosting defence essentially means that content sharing service providers are not liable for copyright infringement in respect of the content they share, provided that they act quickly to take down any unlawful content on becoming aware of it (normally this happens when a user flags that content is infringing). Importantly, the hosting defence does not impose any obligation on content services providers to monitor the content they share.

Article 13 means that content sharing providers will need to go further to protect rights holders against copyright infringement by actively monitoring content uploaded for copyright infringement. In addition, they need to put in place licence terms to ensure the copyright holders are remunerated appropriate for use of their content.

Further questions remain for video games and interactive entertainment

At the moment there is a lack of clarity about the extent of the measures content sharing platforms will be expected to adopt in order to be compliant. This lack of clarity makes forward-planning challenging. The assumption appears to be that problems associated with the value gap can essentially be solved with technology. However at the moment, few people would say that the technology behind content ID systems is perfect. It is not uncommon for legitimate content to be flagged as unlawful. There appears to be limited evidence that the technology currently available would provide a satisfactory solution, as hoped for by the European Commission.

Article 13 places an obligation on content sharing service providers to implement a form of complaints and redress mechanism, which could be used to deal with disputes as to whether content was infringing or not/whether it content has been unfairly taken down The European Parliament’s amendments to the text require that complaints made under the redress mechanism are “subject to human review”. There is a concern that content sharing service providers could find themselves inundated with complaints, particularly as members of the online gaming community tend to be knowledgeable when it comes to their digital rights, and sometimes hold strong views about freedom of speech when it comes to sharing of user generated content.

Article 13 makes provision for licence fees to be paid to rights holders in return for use of their content. The European Council has proposed that the rights holder “must be provided with information to enable them to assess the economic value of their rights”. If this is retained in the final text it could potentially prove to be challenging to implement. User generated content often incorporates multiple copyright protected works (for example, music, plus images, plus video footage, plus original user generated content). Even the act of identifying the rights holders could prove to be difficult.

Brexit uncertainty

It is not clear what will happen in relation to the Copyright Directive when the UK leaves the European Union, or whether the UK will even implement the legislation. Whatever happens, however, there will be a knock-on effect in the UK, as content sharing service providers take the relevant steps needed to make themselves compliant with Article 13 in the EU.