ENDitorial: Lessons from the failure of Licences for Europe

Now that the Licences for Europe has failed so comprehensively, it is time to reflect on what types of voluntary or self-regulatory initiatives are likely to work and which are likely to fail.

Last May, at the Stockholm Internet Forum, EDRi ran an “unconference” session, which brainstormed about what characteristics a self-regulatory initiative would need to have in order to be likely to succeed. Participants produced eight criteria. To avoid failures or counterproductive outcomes of such projects in the future, it would be valuable for the Commission to develop a comprehensive methodology for analysing the context and potential for success. Looking at the Licences for Europe framework through the prism of the “Stockholm Internet Forum” criteria, we can see that even these basic principles could have been valuable.

Criterion 1: Is the process internal or external to the intermediary?

This criterion was met to varying degrees by the different industry stakeholders. The ability to grant licences is clearly an internal process for rightsholders. However, for the users of content for various processes (text and data mining, video hosting, etc), the process issue is entirely external. So, we can say that the criterion is partly respected, but does clearly raise concerns

Criterion 2: Are there vested interests on the part of the intermediary?

There is an obvious vested interest for rightsholders to demand licensing of content in all available situations – or at least have the right to do so – because that allows them more control. There are also vested interests for the users of protected content to use special deals and market dominance to exploit voluntary arrangements. If the Commission had used this methodology, therefore, it would have raised a warning flag.

Criterion 3: How competitive is the market?

This varies widely. However, we know that there is major consolidation and dominance in certain major markets that were covered by the discussions. These competition problems range from the music industry to the video hosting industry (where YouTube is part of Google's very wide online activities). Another red flag.

Criterion 4: What is the (public) policy objective being pursued?

Even though the Commission launched the project and chaired it (i.e. it was clearly a Commission project), it insisted on maintaining a fiction that it was simply a facilitator and could not set the agenda or specify what problems needed to be addressed. Consequently, the public policy objective for the four working groups was not set in advance. Another red flag.

Criterion 5: Whose law is being implemented?

The point of the exercise was to move away from the limits of the existing chaotic legal framework. If we take protected content that is used for parody purposes, for example, there are four EU countries that have a specific copyright exception for this purpose and twenty-four that do not. A “voluntary” agreement between hosting providers and content providers to ask the latter to licence such activities (and a licence can always be revoked), would effectively negate the legal rights of citizens in the four countries that have implemented the exception. So, the law would be replace by a system where the citizens of those four countries would lose their rights. Another red flag.

Criterion 6: Are there regional variations of the impact of the measures?

This criterion is only relevant to the extent that it is covered by the previous point. The criterion covers situations where a voluntary measure would have different “real-world” outcomes in different world regions. No red flag.

Criterion 7: What is the responsibility of the intermediary for its interventions and does the citizen have a right of redress?

If we take the example of “user-generated content”, the intermediaries would restrict the rights of the individual through their terms of service (such as in the parody example in point 5 above) and thereby avoid responsibility for restrictions of legally “guaranteed” rights.

Criterion 8: What is the collateral damage for liability exceptions?

This criterion is not relevant.

So, in conclusion, of the eight criteria, points 2, 3, 4, 5 and 7 raise concerns, point 1 is partly relevant and only points 6 and 8 are not relevant.

While this methodology is quite crude, it is still more sophisticated than anything produced by the European Commission over the entire history of its support for “self-regulation” in the online environment. The fact that even this simple methodology could have helped to predict and avoid the problems of licences for Europe shows that a more structured and analytical approach to the issue of self-regulation in the online world is badly needed. There is an open question however – is the lack of an appropriate methodology from the European Commission due to a simple oversight or is the Commission afraid that such a methodology would prevent it from proposing self-regulation in circumstances that are politically appealing but impractical or damaging in the real world?

SIF Unconference: Enforcement through "self-"Regulation - who ever thought this was a good idea? (27.05.2013)

(Contribution by Joe McNamee - EDRi)