Well, this isn't a surprise. After all, we warned you
that it was likely to happen, and we helped get together folks to warn the EU Commission
that this was a bad idea, but the EU Commission has always seemed dead set
on a plan that they believe will hold back big successful American internet firms, while fostering support for European ones. This week they made their first move by releasing details of some of their plans. This is all part of the "Digital Single Market" plan, which, in theory, makes a ton of sense. The idea is to knock down geographical regulatory barriers on the internet, such as geoblocking. And the first part of the EU's plan is right in line with that idea
and makes perfect sense. It talks about getting rid of geoblocking and also making cross-border delivery of packages easier and less expensive -- basically making e-commerce work better. That's all good.
But it's the second part that is concerning, and that's where they start talking about updating "audiovisual rights" and the regulation of "online platforms."
The audiovisual rights stuff is getting most of the press attention, because of silly rules like requiring video platforms to promote more European-created content.
Currently, European TV broadcasters invest around 20% of their revenues in original content and on-demand providers less than 1%. The Commission wants TV broadcasters to continue to dedicate at least half of viewing time to European works and will oblige on-demand providers to ensure at least 20% share of European content in their catalogues.
This is a silly protectionist measure that we've seen in various countries for TV for ages and it's a joke. If you want more people viewing European content have them make better content
. Forcing content on people because it's "from Europe" isn't going to make anyone want to watch it if it sucks. It will also, of course, make life more difficult for new entrants who will have to make sure that enough of their content meets this arbitrary standard.
But the much more concerning stuff involves the regulation of the internet. Now, yes, the EU Commission basically tries to bend over backwards to say that this isn't about creating new regulations for the internet
. And also to claim that they're not changing the "intermediary liability" regime as laid out in the E-Commerce Directive that is a decent, if unfortunately weaker, version of US intermediary liability protections, saying that platforms aren't responsible for actions of their users. But... there's a big "but" after those claims, and it basically undermines those claims. You can read the following and see them swearing no new regulations and no changes, but the four bullet points and the details buried in them suggest something entirely different:
Today's Communication on platforms does not propose a new general law on online platforms, nor does it suggest to change the liability regime set by the e-Commerce Directive.
The aim is to make sure that platforms can be created, scale up and grow in the European Union. To reach this goal we need a functioning Digital Single Market where online platforms (both startups and established market operators) are not hampered by heavy regulation.
Online platforms are already subject to EU legislation such as consumer and data protection rules, and competition law. New initiatives will only be taken to tackle any specific problems identified and only if it is established that better enforcement of existing rules is not sufficient to address these.
In our approach to online platforms, we will be guided by the following principles:
- a level-playing field for comparable digital services
- responsible behaviour of online platforms to protect core values,
- transparency and fairness for maintaining user trust and safeguarding innovation,
- open and non-discriminatory markets in a data-driven economy.
Let's go one by one. First the "level playing field." This is a popular line, but it's kind of meaningless. What does it even mean? Some companies are going to be more successful than others, or use different business models or strategies. And those, by their very nature, create a different kind of playing field. We should be worried when the government is arguing for tilting the playing field one way or the other. For example, in earlier discussions about this, there were arguments that YouTube's model was unfair, but Spotify's model was fine. Why should the government favor one over the other?
Also, within the details, they make it clear that, despite what was said above, this is about extending new censorship regulations to platforms. "Data protection" regulations include things like "the right to be forgotten." Recognize that when reading this:
In the new e-Privacy Directive the Commission will consider, for example, extending data protection obligations currently applicable only to telecoms companies to platforms.
The next one is the big concern, because it's so... broad: "Ensuring that online platforms behave responsibly." What does that mean? Who determines what's "responsible?" Because you have the RIAA and MPAA insisting that "responsible" means vast censorship of platforms to block anything that might even remotely be infringing. Or you have the FBI insisting that "responsible" means keeping log files for a really long time and not encrypting stuff (or encrypting it with holes in it). There's a lot of wiggle room within "behaving responsibly" that should be a cause for concern.
And, indeed, it looks like the EU Commission is buying the MPAA/RIAA's view of what "behaving responsibly" means:
In the third quarter of 2016, the Commission will propose a copyright reform package aiming to achieve a fairer allocation of value generated by the online distribution of copyright-protected content by online platforms providing access to such content.
This is a fairly loud dog whistle to the RIAA. In the past few months the RIAA has been going on and on about what they're ridiculously calling the "value gap" in online platforms. In short that "value gap" is that internet companies are making lots of money... while record labels are not. To them, that's because of some sort of unfairness in the law. To most everyone else it's because the markets have shifted, and the record labels failed to adapt. And, really, if we're talking about unfair markets and "fair allocation of value" why didn't anyone complain through the 70s, 80s and 90s when the laws were so tilted that the labels basically got all of the "allocation of value" while the actual artists got stiffed?
And, of course, despite the EU Commission initially saying that there would be no impact on the intermediary liability protections in the E-Commerce Directive, they pretty quickly walk that back in the details:
In relation to the liability regime of online intermediaries established by the e-Commerce Directive, the Commission will assess:
- the need for guidance on the liability of online platforms when putting in place voluntary measures to fight illegal content online [starting in the second half of 2016], and
- the need for a formal notice-and-action procedures [after taking due account of the updated audiovisual media and copyright frameworks].
Got that? So now the government will be pushing for "voluntary measures" to take down content. But since it's the government looking into it, it's not so voluntary, is it? And then a "notice and action procedure" which means "notice and takedown." In the US, obviously, we have that for copyright, which has created a massive censorship regime, but we don't have such a setup for other kinds of content. The EU, generally, does have a sort of notice-and-takedown for things like defamation, and it looks like that may expand.
Oh, and then the ever amorphous censorship of "hate speech," which no one ever seems to define clearly:
In addition to revised audiovisual media rules, the Commission will further encourage coordinated EU-wide self-regulatory efforts by online platforms in tackling illegal content online. The Commission is currently discussing with IT companies on a code of conduct on combatting hate speech online.
Sure, I dislike hate speech as much as the next guy, but attempts to suppress hate speech tend to lead to straight up government censorship
or as a way to attack speech governments don't like.
Next up, we've got: "Fostering trust, transparency and ensuring fairness." Yup, there's that "fairness" again. Obviously, fostering trust and transparency are actually things I'm very, very supportive of. But I'm not clear on what the government needs to be doing here, when there are often good ways for the market to do that itself. Companies that are more transparent generate more trust by themselves. And many new platforms rely on public trust to actually provide any value. So, sure, I don't want fake reviews online either, but isn't that something that platforms can handle by themselves?
The Commission will encourage industry to step up voluntary efforts, which it will help in framing, to prevent trust-diminishing practices (in particular, but not limited to, tackling fake or misleading online reviews) and monitor the implementation of the self-regulatory principles agreed on comparison websites and apps.
So, while we applaud the idea of doing away with geoblocking, as well as the general principles
of fairness, trust and transparency, it's extremely frightening to think about what the government has to do in this arena at all, since almost all of the suggested ideas are wide open to abuse in the form of just attacking platforms the government or legacy industries don't like, rather than focusing on what actually creates the most value for the public.