Article 18 & the EU Position

Through the following PMQs it is clear that collective management is a viable method to effectively implement the directive

PQs

Question by Alexis Georgoulis for Article 18 to apply to all service providers, not just UGC.

"Over the last two decades, we have witnessed a dramatic shift in access to music and film through online services. Some online services share content, such as Youtube and TikTok, while others select and make content available themselves, such as Spotify, Apple Music and Netflix.

 

The adoption in 2019 of the European Copyright Directive (2019/790) by the EU institutions, specifically Article 18, highlighted a consensus that performers were not receiving fair remuneration for online uses of their content, such as streaming. While the Member States have until June of this year to implement the directive, a few have already published draft legislation through which they will regulate certain online services, namely online content-sharing services.

 

Could the Commission please clarify if the mention of ‘appropriate and proportionate remuneration’ in Article 18 of the European Copyright Directive applies to all uses of content, including by online services, not limited to online content-sharing service providers?"

Answer given by Mr Breton
on behalf of the European Commission

"The rationale of Article 18 of Directive (EU) 2019/790 on copyright and related rights (‘the directive’)(1) is to protect authors and performers, who tend to be in weaker contractual positions, when they grant a license or transfer their exclusive rights harmonised under Union law, for the purposes of exploitation in return for remuneration. Article 18 does not differentiate between different uses of copyright protected works or subject matters.

However, when Member States implement Article 18 they have to respect the conditions laid down in this provision and other applicable Union law rules, including those on online content sharing service providers, which are subject to a specific copyright regime laid down in Article 17 of this directive."

(1)https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019L0790&qid=1624449921814&from=EN

See the question and answer right here

Question by Iban Garcia del Blanco which highlights that performers are locked in by buy out contracts and lump sum payments.

"In recent years, some platforms dedicated to the management and sale of audio tracks for use by third parties have been using buy-out contracts as a subterfuge, thereby requiring authors and performers to surrender their entire copyright in exchange for a single payment. In doing so, these platforms keep all future income generated from the use of these creations and circumvent the systems in place for collective management of copyright, which is an essential part of a creator’s income.

 

Under Article 18 of the Copyright Directive, Member States shall ensure that where authors and performers license or transfer their exclusive rights for the exploitation of their works or other subject matter, they are entitled to receive appropriate and proportionate remuneration.

 

1. Does the Commission consider that buy-out contracts ensure appropriate and proportionate remuneration for authors and performers?

 

2. Does the Commission intend to limit this type of contract by which platforms abuse their dominant position vis-à-vis authors and performers, who individually negotiate contracts which basically lead to the expropriation of their rights and legitimate income?"

Answer given by Mr Breton
on behalf of the European Commission

"Member States must implement Directive (EU) 2019/790 on copyright in the digital single market (the DSM Directive)(1) by 7 June 2021.

Once it is implemented, the answer to whether buy-out contracts ensure appropriate and proportionate remuneration for authors and performers under Article 18 will depend on a case-by-case assessment, taking into account the margins of manoeuvre left to Member States.

In particular, as mentioned by the Honourable Member, the Commission understands that one of the distinctive features of buy-out contracts is that such contracts remunerate authors and performers based on so-called lump sums, i.e. single payments.

Recital 73 of the directive indicates in this respect that lump sum payments may constitute appropriate and proportionate remuneration but they should not be the rule. Member States should have the freedom to define specific cases for the application of lump sums, taking into account the specificities of each sectors.

The practice described by the Honourable Member was also highlighted in the recently adopted Media and Audiovisual Action Plan(2), where the Commission notes that the application by platforms of a model whereby all intellectual property rights are acquired from producers and/or individual creators since the start, worldwide and in perpetuity, may have the effect of ‘locking-in’ producers and talents with the platforms in question."

The Commission will continue discussing this matter with interested parties in the context of the implementation of the DSM Directive as well as in the follow up to the Media and Audiovisual Action Plan.

(1)Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC, OJ L 130, 17.5.2019, p. 92‐125 https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1558431447846&uri=CELEX:32019L0790

(2)Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions ‘Europe’s Media in the Digital Decade: An Action Plan to Support Recovery and Transformation’. See in particular the box on ‘The role of platforms in Europe’s audiovisual market’ at page 2. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020DC0784

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Question by Niklas Nienass stating that Article 18 applies to all performers, not just AV.

"Directive 2019/790, and specifically its Article 18, gives authors and performers a right to appropriate and proportionate remuneration when they license or transfer their exclusive rights. Member States have until 7 June 2021 to implement this directive on copyright and related rights in the digital single market. Throughout the debate prior to the adoption of this directive, there was a consensus that performers were not receiving fair remuneration from online uses such as streaming.

 

Most Member States are currently in the process of drafting the transposition legislation and some have already published drafts and submitted them to public consultation.

 

In order to support Member States in their efforts to best provide performers with ‘appropriate and proportionate’ remuneration, could the Commission please confirm that ‘performer’ here refers to all performers, including audio and audio-visual performers?"

Answer given by Mr Breton
on behalf of the European Commission

"The Commission confirms that all authors and performers, including authors and performers of audio and audiovisual works, are covered by Article 18 of the directive on Copyright in the Digital Single Market(1). It does not follow from the text of the directive that only authors and performers of a certain category of works would benefit from the principle of appropriate and proportionate remuneration set out in this Article."

(1)Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC https://eur-lex.europa.eu/eli/dir/2019/790/oj

See the question and answer right here