Business

European lawmakers have approved an initial deal on controversial copyright legislation that could have far-reaching consequences for the business models of tech giants like Google and Facebook.

The law is aimed at bringing the EU’s rules on copyright into the 21st century to help artists and publishers whose works have been widely dispersed on the internet.

An initial text of the new copyright directive was passed Tuesday in Strasbourg by lawmakers at the European Parliament. But it still needs to be ratified by ministers at the Council of Europe.

The planned reforms, which have been in the making since 2016, have led to a heated battle that pits large tech companies including Facebook, Google and Twitter against artists and media firms.

One section of the law could result in the implementation of pre-filtering systems that block internet users from sharing memes and other content containing copyright-protected material.

Another part of the copyright overhaul would require news aggregation services like Google’s to negotiate commercial licenses with publishers in order to post snippets or links to articles.

On the tech side, Google and a number of high-profile figures including internet pioneer Tim Berners-Lee and Wikipedia founder Jimmy Wales have railed against the new EU copyright directive. In the media corner, famous artists from ex-Beatle Paul McCartney to Blondie singer Debbie Harry have argued in favor.

Pro-internet freedom activists claim the new it will censor everything from memes to snippets of music and film. Supporters of the law, meanwhile, argue that people and companies in the creative industries are being starved of revenues lost to the sharing of their intellectual property on online platforms.

“The main problem I can see is it’s very unclear how tech companies are supposed to comply with those obligations,” Kathy Berry, an intellectual property lawyer at Linklaters, told CNBC ahead of the vote.

Berry, who characterized the episode as “Hollywood versus Silicon Valley” said questions remain unanswered over how tech companies should take a “proportion response” against copyrighted material online.

Google has been particularly critical of the law, which threatens to impact the business model of its video sharing service YouTube and news aggregation platform Google News.

“The text needs to be clearer to reduce legal uncertainty about how rights holders should cooperate to identify their content — giving platforms reference files, as well as copyright notices with key information (like URLs) to facilitate identifying and removing infringing content, while not removing legitimate material,” Kent Walker, Google’s senior vice president of global affairs, said in a recent blog post.

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