The EU's Proposed Copyright Directive Is Likely To Be A Wonderful Gift -- For US Internet Giants

A couple of weeks ago, Techdirt ran through the catalog of horrors that make up the EU's new Copyright Directive proposals, pointing out that they would be a general disaster in their current form. Of course, the misery would not be evenly spread: some would suffer more, some less. Indeed, an earlier open letter to the European Commission from a bunch of tech companies (including Techdirt), published on the Don't Wreck the Net site, pointed out one group who wouldn't have too much of a problem with the changes:

The largest companies have the resources and staff to deal with increased regulations and burdens. Startups do not.

That is, the big online companies can weather more or less anything: it's the smaller ones -- particularly startups -- that will have difficulties. That warning was issued before the details were known, and now Joe McNamee from the European digital rights group EDRi has penned a very similar analysis based on the newly-published plans:

There is a lot of noise in the press and among lobbyists about an alleged hostility of the EU towards big American internet companies. Reality is more nuanced and more surprising -- the policies appear to be hell-bent on giving Google new monopolies, to the detriment of European citizens and European internet companies.

The most astonishing of these policies is the proposal in the new Copyright Directive for mass, preventive filtering of information as it is being uploaded to the internet in Europe -- a policy so restrictive and absurd that even China or Russia would baulk at the notion. An anti-Google measure? Hardly. Google actively lobbied the Vice-President of the European Commission about the alleged virtues of its content identification system ("contentID"), even if they hadn't expected the Great Firewall of Europe to be the result.

Even if the Copyright Directive manages to pass through the EU legislative system without any changes -- which seems unlikely -- Google would be in a strong position, because it already has the content ID technology in place that will allow it to comply. Although McNamee suggests that as a result Google would be "uniquely placed to license such software to European internet providers," it's more likely that it would keep it for its own exclusive use. However, the US company Audible Magic would doubtless be more than happy to license its widely-used content identification system as an alternative. And irrespective of whether it's based on technology from Google or from Audible Magic, it's hard to see how this outcome helps the European tech industry. Moreover, McNamee is certainly right about the likely outcome of bringing in an insane "ancillary copyright" in the EU, which would require Internet companies to pay a fee to use news snippets:

In Germany, where this policy has already been adopted, Google has the economic muscle to simply refuse to pay and suddenly it is not Google, but the publishers, who have a problem. Publishers put their content online in order for people to view it and to make money from advertising that is on their sites. They need Google News more than Google News needs them. So, the outcome is that everybody pays except Google. The Spanish government came up with a cunning plan, they passed a similar law to the one in Germany, but required Google News to pay. Result: Google News Spain shut down, to the detriment of smaller Spanish news outlets in particular and, again, everyone except Google loses.

The rest of the EDRi post points out other fundamental flaws in the proposed EU Copyright Directive. But the key point is that far from stimulating the European digital economy, the EU's deeply-flawed plans are likely to boost the power and the profits of the largest US Internet companies. That may be good news for them and their shareholders, but it isn't really the European Commission's job.

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