Is the CopyRIGHT directive really RIGHT for SMEs and Start-ups?

The stakes are high just days away from the second round of negotiations amongst the European Institutions of the controversial Copyright Directive legislation voted earlier in September by the Eurodeputies.

There is no doubt that the old copyright law, which dates back to 2001, needs to be revised and adapted to the digital era that we live in , however articles 3, 11, 13 or widely known as the  “TDM exception”, “link tax” and “upload filters”   have raised concerns in the wider public. Despite that, the European Parliament approved the directive including the above-mentioned controversial articles last month.

The directive commits all platforms, regardless their size to take measures in order to scan all data being uploaded so to spot any copyright infringements. In addition, it gives websites the right to ask for licences when the snippet of their content is posted elsewhere. Lastly, it makes the use of data mining only available for scientific research.

The articles are particularly problematic for digital SME’s and Start-ups for the following reasons:

  1. Limited financial means of SME’s and start-ups will make it difficult to comply with the regulation and install expensive filters to their platforms, thus raising barriers to competition with dominant platforms, such as Google and Facebook.
  2. Text and Data mining, known as TDM, is used to process various types of textual data, it is revolutionary in data analytics, machine learning, artificial intelligence and indispensable for the functioning of innovative products and services developed by SME’s and start-ups. More specifically by impeding the commercial use of artificial intelligence amongst SME’s and Start-ups, we hamper their capacity to develop artificial intelligence thus leading them to rely on American solutions. What is more European companies will be bound to pay expensive licences to mine data, which once again gives a compelling advantage to companies established outside the EU.
  3. Free and Open Source software plays an essential role in the functioning of SME’s and Start-ups. It implies that the software is accessible and available for everybody to modify distribute and improve. Nowadays more and more SME’s and start-ups rely heavily on Free and Open Source Software. According to estimations, the software and software-based services market in the European Union was worth EUR 229 billion in 2009, while in 2020 is expected to reach EUR 290 billion. Fortunately, under the current proposal open source collaboration platforms fall as an exception, however in the case that this changes in the future negotiations between the instituions, the consequences could be catastrophic. Companies will have hard time developing products which are based on operating Open Source Software since their builds will face “filtering” which could eventually lead to extremely slowed down processes of product development, which in turn will require more resources and ultimate lead to the collapsing of the software

“The Copyright Directive vote was a sad day for the digital future of Europe. The decision taken by the European Parliament was not the right way to go. The directive is about to cause irremediable damage not only to the free and open internet as we know it, but also to our innovative digital SMEs by erecting even higher barriers that protect dominant platforms from competition. With this decision the parliament is clearly giving advantage to the IT giants who can immediately adapt to the new regulations marginalising SMEs and Start-ups who don’t have the means to acclimate to mandatory filters and licences” – stated Oliver Grün, the President of European DIGITAL SME Alliance.

However, the “battle” might have been lost but the “war” is not over. The directive will become the subject of final negotiations between the 3 institutions, the council the commission and the parliament, thus there is still a chance that it will be rejected when the time for the final vote comes up.

The European DIGITAL SME Alliance calls all SMEs and Start-ups to lobby to their Member States to carefully review the directive and find means to achieve the protection of copyrights without burdening the advancement of SMEs and start-ups. More specifically we call for keeping the exception on the open source collaboration platforms and to adopt a TDM exception under their respective national laws.