The Copyright Directive’s Link Tax Has Been A Failure; Will Anyone Learn From This?

It seems so long ago that people were trying to stop the worst aspects of the EU Copyright Directive. It was quite a battle, as Chapter 6 of Walled Culture the book (free digital versions available) recounts in detail. The final legislation was passed in March 2019, but it is important not simply to accept what happened and move on. The copyright industry used many dubious arguments to convince MEPs to vote for the new copyright framework. Although many of us pointed out the flaws in these at the time, we were drowned out by the chorus of well-paid lobbyists employed by the copyright world. Now that the EU Copyright Directive has been in force for a few years, we can begin to see its real-world effects. That allows us to compare them with the claims that were made to get the law passed.

For example, the so-called “link tax” was supposedly about saving the newspaper industry. Many publishers say they are struggling, which is true, but not for the reasons they claim. It is largely their own failure to embrace the opportunities of the Internet in the 1990s that led to newcomers like Google becoming hugely successful in the online news space. Nonetheless, publishers argued that a new ancillary copyright should be created to allow them to generate revenue that was desperately needed if the world of newspapers was to thrive in the EU.

In fact, as I wrote in an article six years ago, for the link tax we did have some data points. Both Germany and Spain had introduced a link tax before the EU Copyright Directive, and the resulting income from them was pitiful – certainly nowhere near enough to “save” the newspaper industry. This showed the link tax was more about publishers asserting their right to demand a payment from the Internet giants, as part of their larger claim that any use of copyright material must be controlled by them.

There was another thread to the publishers’ argument that even more copyright protection was needed. According to the newspaper industry, the journalists who wrote the news stories deserved some remuneration from Internet companies that linked to it. This was a seductive argument, not least for journalists. But I knew from my own experience as one of them, that these grand promises from publishers to share with journalists extra revenue rarely materialized, and that this was just a ploy to win over doubtful MEPs. We are now in a position to see how this particular aspect of the link tax has worked out. A useful post by Ula Furgal on the Kluwer Copyright Blog summarizes what has been happening around the EU in terms of implementations:

Rather unsurprisingly, only a handful of the member states decided to implement the provision on the journalists’ share by explicitly indicating what part of publishers’ revenues creators are entitled to receive. And among those that did, the share varies quite significantly. While in Italy, journalists are due to receive between 2-5% of publishers’ revenues, in Bulgaria the share should be minimum 20% and at least 1/3 in Germany. In Greece, the percentage depends on the proportion of journalists employed by a publisher, compared to those involved on casual basis. It is either 15% or 25%, with the former owed to journalists when less than 60% of them are salaried employees, which could be read as the Greek legislator’s attempt to reward the publishers providing creators with more stability. The share guaranteed by the Lithuanian implementation (to be followed by Poland) is the most generous, reserving 50% of the revenues to authors.

The blog post notes that there is huge variation here, “which is difficult to justify as it is rather unlikely that the news production processes and sector practices vary so significantly between the countries”. That state of affairs is particularly ironic since one of the main justifications for the EU Copyright Directive was that it would unify copyright law across the twenty-seven member states and bring it into the digital age. In practice, it has simply extended the earlier fragmentation of copyright in new ways.

As for the key question of whether journalists are, as promised, benefitting much from the new link tax, Furgal writes:

It does not seem that the right to appropriate share is currently making a substantial difference to the journalists and their incomes.

That’s really no surprise, given that the earlier link taxes in Germany and Spain made very little difference to publishers’ incomes, and journalists get a (varying) proportion of that. But as well as confirming that the past was a good guide to what might happen with any new EU-wide ancillary copyright, this particular piece of copyright history is also important for some current discussions, as Furgal points out:

Considering its complex positioning, between big tech, content producers and creators, the appropriate share problem could offer valuable lessons for the ongoing discussion on remunerating creators in the GenAI age.

Sadly, the failure of the link tax to deliver anything worthwhile for anyone, despite all the time and effort involved in bringing it in, is likely to be a lesson that the copyright industry refuses to learn.

Follow me @glynmoody on Mastodon and on Bluesky. Originally published on Walled Culture.