European lawmakers have made some dramatic missteps in Internet regulation, but today they passed a bill banning the distribution of licensed content without proper payment. The bill – Article 13 of the EU Copyright Directive – requires firms such as Google/YouTube to secure licenses to copyrighted content they distribute.

It also bars platforms from distributing licensed content that creators have chosen not to license to them, even if the content is uploaded by users. How platforms choose to identify licensed content is up to them, although news articles, blog posts, and advocacy claims are still circulating that claim it requires them to use automated upload filters.

Some companies tried using “cyberturfing” to drum up opposition, but lawmakers are wise to them. Various Internet luminaries, former luminaries, and semi-luminaries also weighed in, but they failed to offer a more realistic plan.

YouTube Dominates Music Video

YouTube is the prime target, for good reasons. YouTube is complementary to Google search, especially for music video. Search for any performer + music video and your first screenful of hits go to YouTube.

This works for Taylor Swift, Eminem, Beyoncé, Adele, Paul McCartney and probably everyone else. After Google directs you to YouTube and you watch the video, the company collects ad revenue, a small part of which is shared with the artist.

According to Information is Beautiful, a YouTube play generates $0.0006 for the artist, or 6/100s of a penny. Apple Music, on the other hand, pays $0.0064, ten times as much.

YouTube dominates this market, with 46% of all online streaming time. An amazing 85% of YouTube users stream music, most of which (76%) comes from artists they already know.

YouTube’s Allies Say This Directive Helps Them

This is where things get complicated. Longtime EFF operative Cory Doctorow claims Article 13 will shut every other online music distributor out of business in blog post titled “How the EU will force all artists to use Youtube, forever:”

Google can and will build tools to comply with Article 13. But no one who might ever compete with Google — in particular, no less-surveillant, European companies who have an interest in meeting and exceeding the payments that artists get from Google — will ever be able to launch their competing service. It’s one thing to try to take on Youtube’s video hosting and recommending — it’s another thing to match the hundreds of millions Youtube will spend on complying with Article 13.

Article 13 is a terrible idea and Google’s first preference is undoubtably that it not pass — they’d rather keep the money they’d have to spend, and also they understand technology and thus understand how stupid this idea is — but their second preference is for Article 13 to pass and ensure that they never have to worry about being outcompeted.

[YouTube doesn’t agree, as we shall see.]

But That’s Not Likely

This is unlikely. In the first place, small and medium sized businesses are exempt. This directive only applies to the major sites whose names you know well: Spotify, Pandora, Apple Music, and the like.

Secondly, while the details of the kind of enforcement that’s required haven’t been written yet, it’s not difficult to imagine methods of compliance that don’t require much technology. Limiting uploads to people who are registered users with real names and addresses and an agreement not to violate copyright could well suffice, especially if repeat offenders are banned.

Thirdly, third party services are likely to develop that will verify compliance with the directive by anonymous uploaders for a fee. This may complicate things for people who want to share videos with small groups of friends and family, but there are ways for such people to share without violating copyright.

YouTube Doesn’t Like Article 13 At All

YouTube already understands that video distribution systems will be abused by digital pirates. It has developed two systems to address this problem already. As YouTube’s Chief Business Officer Robert Kyncl explains:

Creators and artists have built businesses on the back of openness and supported by our sophisticated copyright management tools, including Content ID and the recently launched Copyright Match Tool that manages re-uploads of creators’ content. Copyright holders have control over their content: they can use our tools to block or remove their works, or they can keep them on YouTube and earn advertising revenue.

Content ID does a pattern match of new uploads against a database of popular titles, and Copyright Match Tool prevents the re-upload of recently removed content. YouTube was the first to develop such tools, but the technology is now well understood, as are the means of overcoming false matches. None of this breaks new ground.

But YouTube would not be complaining about the directive – and paying advocates to oppose it – if it really were in Google’s interests. YouTube has had to shoulder high copyright compliance costs because it was such an egregious offender before it bothered to address a problem that arguably began with the actions of one of its founders.

Business Does Involve Work

The technical means of identifying copyrighted works without any context can be challenging: it takes artificial intelligence to determine, in a short time, whether an arbitrary series of bits encodes a copyrighted work or not. But computer-based services solve complicated problems all the time, such as driving cars amidst heavy traffic in the rain.

Google/YouTube, Facebook, Amazon, and Netflix encrypt all of their Internet traffic, an expensive, computationally-intensive task. And they do that simply to make consumer activity invisible to competitors in order to protect advertising revenue. Screening video uploads is likely much less difficult.

But there are good reasons to do what Europe wants to do with Article 13. For too long, too many Internet platforms have built gigantic businesses on the backs of uncompensated and poorly-compensated creators. Businesses that can’t stand to pay reasonable fees for the inputs don’t really deserve to exist, and the Internet owes creators a great debt.

Copyright is in the Public’s Long Term Interest

Not only does copyright ensure that artists are paid for their work as it’s consumed, it ensures that distributors have viable businesses in the long run. And it ensures that culture continues to develop, which is in everyone’s interest.

Copyright has been enforced in one way or another since the 6th century, and it hasn’t destroyed civilization yet. In fact, the original copyrighted book was a Latin translation of the Book of Psalms.

EFF claims that Article 13 is an “extinction level event for the Internet.” Please, haven’t we had enough of that sort of hysteria? The Internet will remain a vibrant and vital system for communication despite – and perhaps because of – reforms such as Article 13.

The US should give serious consideration to harmonizing our copyright law with that of the EU after all the details shake out. In the meantime, feel free to move about the Internet.

Addendum: Text of the Law

Here’s what the controversial provision actually says:

1. Without prejudice to Article 3(1) and (2) of Directive 2001/29/EC, online content sharing service providers perform an act of communication to the public. They shall therefore conclude fair and appropriate licensing agreements with right holders.

2. Licensing agreements which are concluded by online content sharing service providers with right holders for the acts of communication referred to in paragraph 1, shall cover the liability for works uploaded by the users of such online content sharing services in line with the terms and conditions set out in the licensing agreement, provided that such users do not act for commercial purposes.

2a. Member States shall provide that where right holders do not wish to conclude licensing agreements, online content sharing service providers and right holders shall cooperate in good faith in order to ensure that unauthorised protected works or other subject matter are not available on their services. Cooperation between online content service providers and right holders shall not lead to preventing the availability of non-infringing works or other protected subject matter, including those covered by an exception or limitation to copyright.

2b. Members States shall ensure that online content sharing service providers referred to in paragraph 1 put in place effective and expeditious complaints and redress mechanisms that are available to users in case the cooperation referred to in paragraph 2a leads to unjustified removals of their content. Any complaint filed under such mechanisms shall be processed without undue delay and be subject to human review. Right holders shall reasonably justify their decisions to avoid arbitrary dismissal of complaints. Moreover, in accordance with Directive 95/46/EC, Directive 2002/58/EC and the General Data Protection Regulation, the cooperation shall not lead to any identification of individual users nor the processing of their personal data. Member States shall also ensure that users have access to an independent body for the resolution of disputes as well as to a court or another relevant judicial authority to assert the use of an exception or limitation to copyright rules.

3. As of [date of entry into force of this directive], the Commission and the Member States shall organise dialogues between stakeholders to harmonise and to define best practices and issue guidance to ensure the functioning of licensing agreements and on cooperation between online content sharing service providers and right holders for the use of their works or other subject matter within the meaning of this Directive. When defining best practices, special account shall be taken of fundamental rights, the use of exceptions and limitations as well as ensuring that the burden on SMEs remains appropriate and that automated blocking of content is avoided.

The vote in the European Parliament was 438 votes in favor and 226 opposed, with 39 abstentions.