Much of the U.S. media focus regarding copyright policy in Europe has been focused on the Gowers Review in the UK, which is restricted to one country, is merely advisory and lacks the power of law. There is far more occurring across the pond, however.

Most EU nations have now implemented the Copyright Directive, which like our DMCA put into law provisions accepted in two WIPO treaties. Much of the debate now, as in the US, is related to how to foster legal digital services while ensuring the fair compensation of rightsholders, and two major policy procedures are underway.

There is a long history of protection for artists in Europe -- European countries put together the Berne Convention a century before the US signed it -- but they also tend to favor active state involvement. Take a speech given yesterday by Charlie McCreevy, the European Commissioner for Internal Markets and Services. He cautioned -- correctly -- that IP must be balanced between rightsholders and users, and leaning too far in one direction can be harmful:

This on-going process has resulted in two Commission initiatives – one adopted last year and one to be brought forward in the very near future – in which there has been particularly strong interest.

My approach to both matters – the licensing of music in the online environment and the question of fair compensation for legitimate acts of private copying – has been the same. I have worked hard to find a balanced way forward, one that takes into account the best interests of all stakeholders, rightsholders, industry and consumers, and that can contribute most to ensuring a strong and vibrant future for Europe's creative sector.

Here's how he feels the Commission handled licensing across EU member states:

We chose to place choice firmly in the hands of the rightsholder. This seemed to us to be the best and most balanced way forward. In empowering rightsholders to choose freely the manager that can best represent their interests online, creative artists are in the strongest possible position to protect and defend the value of their works.

Well, I can applaud that, but why did the Commission have to get involved in licensing to begin with?

It came as some surprise to many that licensing arrangements in Europe resulted more from custom and practice than from law, and so we came to the conclusion that the most appropriate means to address the problem was through a Commission Recommendation.

Hmm. I'm not completely familiar with the provisions of the Commission's recommendation, but if an EU-wide licensing mandate exists, it can't be said that choice is firmly in the hands of the rightsholder. Licensing from custom and practice can also be called a "market." Rightsholders will be best served through market negotiations, as I have written here and here; the primary advantage of government-mandated licensing is facilitating availability of product to end-users. If this was in fact the EC's goal -- making it easier for online services to license music -- I wish McGreevy would say so.

There is no question that the online music market in Europe trails that in the US, and it's still pretty small here, despite what early adopters might think. A BSA study (unfortunately a year old) shows how EU nations are only just beginning to see online music choices.

That BSA study also provides some statistics on levies, which other than in the UK is a common method of compensating artists. This anti-market approach puts taxes on various media and hardware -- it varies from state to state -- and artists are paid from that fund. We've seen how well that has worked (not) with the Audio Home Recording Act. Why, in a digital era where an online music provider knows exactly which song has been purchased or downloaded for a subscription service, we would want to avoid a direct market compensation system in favor of an inexact media tax system (when an iPod user who doesn't burn CDs isn't even paying the tax) I'll never know. As the EU conducts the other inquiry McGreevy mentioned, fair compensation for downloading, it would be wise to abandon levies and go for direct market compensation via non-governmental third parties chosen by rightsholders. In other words, a market solution. But my fear would be that the EU seeks to make levies uniform across the EU and increases them (which could lead to Switzerland doing a good business shipping blank CDs and DVDs at discount to the EU countries that surround it).

It makes no sense to mandate licenses when they're occurring spontaneously in the market. It makes no sense to create a Rube Goldberg machine to compensate artists when it can be done directly. We shouldn't be surprised that Europe, in particular the EU, doesn't see the market as the solution to its "problems" with copyrights, online services and licensing. But I can't say the US has a better track record in this area.

posted by Patrick Ross @ 12:01 PM | DMCA, Markets: Business, Investment & Innovation

Link to this Entry | Printer-Friendly | Email a Comment | Post a Comment(0)