The reform is significant especially from copyrights holders’ point of view since the changes enhance rights holders’ opportunities to demand reasonable contracts and fair remuneration for the use of their works on digital platforms. Producers and performers are able to demand additional compensation from distributors who benefit from their works, e.g. if the initially agreed remuneration is unreasonably low in comparison to the benefits gained by the distributor.
In practice, platform service providers should obtain licenses to contents in advance, instead of blocking infringing content or obtaining necessary permits retrospectively. Until now, internet companies have had little incentives to make fair licensing deals with copyright holders because they have not been held liable for contents posted on their platforms.
The Directive sets direct obligations for e.g. tech giants, requiring them to distribute income to artists and journalists in the future. However, online platform service providers are not limited to just Google and Facebook, and the new legislation may also have significant implications for other companies that provide online platform services. The new legislation will in any case require companies to make investments and develop new technical solutions to ensure that copyright rules are followed on their platforms.
Member States are currently preparing the implementation of the Directive, which should be transposed into their national legislation by June 2021. It remains to be seen, how exactly the new rules will affect the national laws of each Member State and what the final implications to the digital single market will be.
Links: Directive (EU) 2019/790