COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT on the modernisation of EU copyright rules Accompanying the document Proposal for a Directive of the European Parliament and of the Council on copyright in the Digital Single Market and Proposal for a Regulation of the European Parliament and of the Council laying down rules on the exercise of copyright and related rights applicable to certain online transmissions of broadcasting organisations and retransmissions of television and radio programmes
Date: 2016-09-14
Institutions: Directorate-General for Communications Networks, Content and Technology, European Commission
Subjects: Internet, audiovisual programme, broadcasting, copyright, cultural heritage, digital technology, reprography, single market, television, transmission network

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   EN 

   EUROPEAN COMMISSION  Brussels, 14.9.2016  SWD(2016) 302 final   COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  on the modernisation of EU copyright rules Accompanying the document Proposal for a   Directive of the European Parliament and of the Council on copyright in the Digital Single Market  and  Proposal for a   Regulation of the European Parliament and of the Council  laying down rules on the exercise of copyright and related rights applicable to certain online transmissions of broadcasting organisations and retransmissions of television and radio programmes {COM(2016) 593} {COM(2016) 594} {SWD(2016) 301}  
 
 
Executive Summary Sheet 

Impact assessment on the modernisation of EU copyright rules 

What is the problem and why is it a problem at EU level?  

A. Need for action 

This IA examines a number of issues linked to the functioning of EU copyright rules in the Digital Single Market. It 
considers adjusting existing rules or introducing new rules in three distinct areas: (i) access to content online; (ii) 
the  functioning  of  key  exceptions  in  the  digital  and  cross-border  environment;  and  (iii)  the  functioning  of  the 
copyright marketplace.  

In  the  first  area,  the  problems  addressed  in  the  IA  are  directly  related  to  difficulties  encountered  with  the 
clearance of online rights, by broadcasters, retransmission services, Video-on-Demand (VoD) platforms or cultural 
heritage  institutions  (CHIs).  Broadcasters  face  difficulties  in  particular  when  clearing  rights  for  making  TV  and 
radio  programmes  available  online  across  borders;  similarly,  the  clearance  of  rights  can  be  complex  for 
retransmission services other than cable operators when they offer channels from other Member States (MS). The 
main findings of the evaluation of the functioning of the Satellite and Cable Directive (Directive 93/83/EEC) have 
been taken into account when assessing the extent of these problems and the possible solutions. Also, difficulties 
in  acquiring  online  rights  contribute  to  the  limited  availability  of  European  audiovisual  works  on  VoD  platforms. 
Finally, CHIs face important difficulties when clearing rights for digitising out-of-commerce (OOC) works of their 
collections and disseminating them to the public. 

In  the  second  area,  the  legal  uncertainty  as  to  the  acts  allowed  under  the  existing  copyright  exceptions,  in 
particular  the  digital  environment,  has  been  identified  as  a  major  issue  for  the  functioning  of  the  Digital  Single 
Market.  Teachers  and  students  are  affected  by  legal  uncertainty  when  using  content  in  digitally-supported  and 
cross-border teaching activities. Researchers face legal uncertainty with regard to the possibility to carry out text 
and  data  mining  (TDM)  on  content  they  have  lawful  access  to.  Preservation  of  works  by  CHIs,  in  particular  in 
digital forms, may also be hampered by legal uncertainty and disproportionate transaction costs. 

In the third area, the IA concentrates on issues related to the distribution of value in the online environment, with 
a  distinction  between  the  problems  faced  'upstream'  by  right  holders  when  trying  to  license  their  content  to 
certain  types  of  online  services  and  those  faced  'downstream'  by  creators  when  negotiating  contracts  for  the 
exploitation of their works.  Right holders face difficulties when seeking to control and monetize the use of their 
content by online services storing and giving access to content uploaded by end-users. It has also become difficult 
for  press  publishers  to  license  their  publications  and  prevent  unauthorized  uses  by  online  services.  Also,  all 
publishers  face  legal  uncertainty  as  regards  the  possibility  for  them  to  receive  a  share  in  the  compensation  for 
uses  of  works  under  an  exception.  Finally,  authors  and  performers  (creators)  may  not  always  have  sufficient 
information  on  the  exploitation  of  their  works  allowing  them  to  negotiate  an  appropriate  remuneration  in 
exchange for the exploitation of their rights. 

What should be achieved?  

Three general objectives have been identified:  
(i)  allow  for  wider  online  access  to  protected  content  across  the  EU,  focusing  on  TV  and  radio  programmes, 
European audiovisual works and cultural heritage;  
(ii) facilitate digital uses of protected content for education, research and preservation in the single market; and 
(iii) ensure that the online copyright marketplace works efficiently for all players and gives the right incentives for 
investment in and dissemination of creative content. 

What is the value added of action at the EU level (subsidiarity)?  

By concentrating on the functioning of EU copyright rules in the digital and online environment, this IA addresses 
problems which have an important cross-border dimension.  

As regards the first area, national solutions for the above mentioned problems related to online access to content, 
including  cross-border,  may  generate  further  fragmentation  in  the  Digital  Single  Market.  Therefore,  in  order  to 
produce clear benefits, a common approach and action should be provided at EU level. 

As regards the second area, the existing level of harmonisation limits the possibility for MS to act in the area of 
copyright,  as  they  cannot  unilaterally  alter  the  scope  of  the  harmonised  rights  and  exceptions.  Moreover,  EU 
intervention is indispensable to guarantee legal certainty in cross border situations. As regards the third area, the 
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rationale  for EU action stems  both from the harmonisation already in place  (notably in terms  of rights) and the 
cross-border  nature  of  the  distribution  of  content  online.  Intervention  at  national  level  would  not  be  sufficiently 
efficient to address the identified problems (notably because it would lack scale) and could create new obstacles 
and market fragmentation. Action at EU level is necessary in order to ensure legal certainty for creators and those 
investing in content, for distributors and for users. It will also allow right holders to better exercise their rights in 
the online environment and guarantee a level playing field in the Digital Single Market. 

B. Solutions 

What are the  various options to achieve  the  objectives?  Is  there a preferred  option or  not?  If  not, 
why?  
The  options  examined  for  each  topic  include  the  baseline  option,  in  most  cases  a  non-legislative  option  (in  the 
form of Commission's guidance or recommendation and/or stakeholders’ dialogue) and one or several legislative 
options. A preferred option has been identified for each topic.  

In  the  area  of access to content online, different  licensing  regimes,  considered  as  enabling  mechanisms  to 
facilitate the clearance of rights, are examined in the legislative options.  

• 

The preferred option in relation to online transmissions of broadcasting organisations is the application of 
the country of origin principle to the clearing of rights for their online services which are ancillary to their 
initial broadcast.  

• 

•  As for the digital retransmissions of TV/radio programmes, the preferred option is the application of the 
mandatory  collective  management  of  rights  to  retransmission  services  provided  over  "closed"  electronic 
communication networks.  
For  the  licensing  of  VoD  rights,  the  preferred  option  includes  a  European  stakeholders'  dialogue  and  a 
negotiation  mechanism  that  would  facilitate  the  conclusion  of  licences  for  the  online  exploitation  of 
audiovisual works by removing contractual blockages.  
Finally, for OOC works, the preferred option is a legislative intervention at EU level enabling MS to put in 
place specific legal mechanisms for the conclusion of collective licensing agreements for the use of OOC 
works  by  cultural  heritage  institutions  (CHIs)  and  on  the  introduction  of  a  cross-border  effect  for  such 
agreements. 

• 

In relation to exceptions, the legislative options are designed in a way to complement the existing exceptions (in 
the case of preservation and teaching) or introduce a new exception for specific uses (e.g. text and data mining). 
Different  options  are  envisaged,  with  variations  on  the  scope  of  the  exception,  the  beneficiaries  and/or  the 
relationship with the licensing market.  

• 

• 

• 

The preferred option for teaching activities is a mandatory exception covering digital uses undertaken in 
the  context  of  illustration  for  teaching  with  the  option  for  MS  to  make  it  subject  to  the  availability  of 
adequate licences covering the same uses (digital and cross border). 
For TDM, the preferred option is a mandatory exception applicable to research organisations acting in the 
public  interest  such  as  universities  or  research  institutes.  The  exception  would  allow  them  to  carry  out 
TDM on content they have lawful access to, for the purposes of scientific research.  
For  preservation  of  cultural  heritage,  the  preferred  option  is  a  mandatory  exception  for  preservation 
purposes by cultural heritage institutions (CHIs). 

Concerning the functioning of the copyright marketplace, the legislative options considered aim at ensuring a fair 
sharing of the value in the online environment, notably through the introduction of specific obligations on certain 
types of online services or on those contracting with authors and performers.  

• 

In relation to the use of content by user uploaded content services, the preferred solution is an obligation 
on online services storing and giving access to large amount of content uploaded by their users to put in 
place appropriate and proportionate technologies, and to increase transparency vis à vis right holders.  
•  Concerning the rights in publications, the preferred solution is the introduction in EU law of a related right 
for publishers covering the digital uses of their press publications and of a provision enabling MS to allow 
all  publishers  (news,  books,  scientific,  etc)  to  receive  a  share  in  the  compensation  for  uses  under  an 
exception. 
In relation to the  lack of transparency on the  remuneration  of  creators,  the preferred option  consists in 
the  introduction  in  EU  legislation  of  transparency  obligations  on  the  creators'  contractual  counterparties 
(notably  producers  and  publishers),  supported  by  a  contract  adjustment  and  dispute  resolution 
mechanism.  

• 

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What are different stakeholders' views? Who supports which option?  
The  options  considered  in  this  IA  would  affect  a  wide  range  of  stakeholders,  notably:  authors  and  performers, 
collective  management  organisations,  producers,  publishers,  broadcasters,  providers  of  retransmission  services, 
distributors,  online  services,  institutional  users,  researchers,  consumers.  Stakeholders’  views  are  very  specific  to 
each topic and are therefore presented in relation to each option in the IA. The results of the public consultations 
held in 2013-2016 which support the analysis in this IA are presented in Annex 2. 

C. Impacts of the preferred option 

What are the benefits of the preferred option (if any, otherwise of main ones)?  

transmissions  and  by 

The  preferred  options  identified  in  relation  to  online  transmissions  and  retransmissions  of  TV  and  radio 
programmes would reduce the transaction costs linked to the clearance of rights faced by broadcasters for their 
cross-border  online 
retransmission  services  provided  over  "closed"  electronic 
communications  networks  (e.g.  IPTV).  They  are  also  expected  to  enhance  the  cross-border  distribution  of  and 
access to broadcasters' TV and radio programmes.  
Concerning the licensing of VoD rights, the preferred option would help removing contractual blockages and could 
therefore improve the availability of European audiovisual works on VoD platforms.  
For OOC works, the preferred option would favour a reduction of transaction costs and make possible the specific 
licences required for the digitisation and dissemination of OOC works by cultural heritage institutions, for all types 
of works and in all MS, including across borders 

The new exception for digital uses of protected content in the context of illustration for teaching would bring full 
legal certainty to educational establishments and teachers, which is expected to increase the uptake and quality of 
digital  technologies  and  innovative  methods  in  education  and  provide  an  enriched  learning  environment  and 
improved  outcomes  for  students.  The  possibility  for  MS  to  make  the  exception  subject  to  the  availability  of 
licences covering the same uses would bring the necessary flexibility without reducing the legal certainty for users 
or hampering cross-border uses.  
The  new  TDM  exception  would  increase  legal  certainty  and  reduce  rights  clearance  costs  for  research 
organisations,  including  when  research  projects  are  carried  with  a  possible  commercial  outcome,  eg.  in  the 
context of PPPs.  
The  preferred  option  for  preservation  would  provide  full  legal  certainty  to  CHI  carrying  out  preservation 
reproductions of works in their permanent collections, including with digital technologies. 

In the third area covered by this IA, the preferred options are expected to allow right holders to better exploit and 
control  the  distribution  of  their  content  online.  The  obligation  for  user  uploaded  content  services  to  deploy 
technical means would allow right holder to better decide on the availability of their content on these services. It 
is likely to encourage the conclusion of agreements for the use of content and to generate additional revenues for 
right holders.  
As  for  press  publishers,  the  preferred  option  would  increase  their  legal  certainty,  strengthen  their  bargaining 
position  and  have  a  positive  impact  on  their  ability  to  license  content  and  enforce  the  rights  on  their  press 
publications. The preferred option would also increase legal certainty for all publishers as regards the possibility 
for them to receive a share in the compensation for uses under an exception. 
The  transparency  obligations  imposed  on  their  contractual  counterparties  would  provide  creators  with  the 
information necessary to assess whether their remuneration is appropriate and with the legal means to request, 
where necessary, adjustment of the remuneration (contract adjustment mechanism).  

What are the costs of the preferred option (if any, otherwise main ones)?  

The application of the country of origin to the right clearance for broadcasters' ancillary services online would be a 
new situation for right holders when licensing their content to broadcasters for online transmissions. However, it is 
a targeted intervention (limited to broadcasters' ancillary online services and not affecting the contractual freedom 
of  broadcasters  and  right  holders)  which  is  expected  to  facilitate  the  development  of  the  market  without 
disruption of the existing business models and distribution strategies.  
The  application  of  mandatory  collective  management  for  certain  types  of  digital  retransmission  services  would 
affect  the  right  holders'  licensing  choices  in  a  limited  manner.  The  compliance  costs  would  be  marginal  as  the 
same  network  of  collective  management  organisations  (CMOs)  which  is  used  to  license  rights  to  cable 
retransmissions could be used to license rights to retransmissions by means other than cable.  
As regards the negotiation mechanism aimed at facilitating the licensing of VoD rights, the implementation costs 
would be limited, as MS could rely on existing structures with the necessary expertise. Stakeholders (right holders, 
distributors,  VoD  platforms)  may  incur  some  costs  for  participating  in  the  negotiation  mechanism.  These  costs 

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would however be offset by the efficiency gains deriving from successful negotiation.  
The preferred option for OOC works would not imply any direct costs as such. In case the legal mechanisms are 
used, CMOs would incur some costs related to transparency requirements, handling of opt-outs and administration 
of the licence.  

In the area of exceptions, the preferred options are not expected to affect right holders' licensing revenues to any 
significant extent. Very limited compliance costs may arise from the need to adapt the scope of existing licences 
to take account of the new exceptions.  
For teaching, the new exception is not expected to have an impact on the right holders' primary market, notably 
because  of  the  purpose  and  conditions  attached  to  the  exception  (illustration  for  teaching,  digital  uses  under 
secure electronic networks). It may imply some compliance costs for MS deciding to make the application of the 
exception  subject  to  the  availability  of  licences  covering  the  same  uses,  because  of  the  requirement  to  ensure 
availability and visibility of such licences. However, these costs would allow to significantly reduce the educational 
establishments' administrative burden.  
In  the  case  of  TDM,  the  lawful  access  condition  foreseen  for  the  use  of  the  exception  would  ensure  that  the 
preferred option does not affect the right holders' subscription market.  
The preferred option for preservation of cultural heritage would not generate particular compliance costs; impact 
on  revenues  for  rights  holders  would  be  minimum  and  even  negligible,  as  this  exception  would  only  apply  to 
works that CHIs already have in their permanent collections and have no bearing on the acquisition of permanent 
copies into a collection.  

For online services distributing content uploaded by end-users, there would be compliance costs deriving from the 
technologies  to  be  put  in  place.  These  costs  would  depend  on  the  quantity  and  the  type  of  content  to  be 
identified.  They  are  expected  to  be  limited  by  the  fact  that  the  technologies  to  be  put  in  place  need  to  be 
proportionate, and that a majority of the services covered already deploy some content identification technologies. 
The introduction of a related right covering digital uses of press publications is not expected to generate higher 
licence  fees  for  online  service  providers  which  already  conclude  licences  covering  specifically  the  use  of  digital 
news content. It would only imply costs for those online services providers which are not concluding licences for 
the  reuse  of  publishers'  content  today  when  they  should  in  principle  do  so,  pursuant  to  copyright  law.  The 
possibility for MS to allow all publishers to receive a share in the compensation for uses under an exception is not 
expected to generate costs as collecting societies, in charge of collecting compensation for publishers, are already 
in  place  in  a  majority  of  MS.  For  remuneration  of  creators,  the  transparency  obligations  would  generate 
compliance costs for the creators' contractual counterparties, which are however expected to be reasonable. The 
very limited availability of data did not allow  for an overall quantification of these costs; however estimates are 
included  in  the  IA  on  the  basis  of  the  few  examples  reported  by  stakeholders.  The  contract  adjustment 
mechanism is expected to generate limited costs (e.g. renegotiation costs) since it is likely to be used mainly as a 
leverage in negotiation. MS could use existing structures in order to reduce the possible costs related to setting up 
the dispute resolution mechanism.  

What are the impacts on SMEs and competitiveness?  

The  high  share  of  SMEs  in  the  creative  industries  has  been  taken  into  account  in  the  assessment  of  the  policy 
options.  The  preferred  options  in  the  area  of  access  to  content  are  expected  to  benefit  SMEs  (as  TV/radio 
broadcasters, service providers or right holders), by reducing the administrative burden linked to the clearance or 
licensing of rights. In the case of exceptions, the preferred options constitute solutions which are not expected to 
have any significant impact on the licensing market or revenues of SMEs (right holders). An exclusion of micro-
companies has not been considered appropriate as it would create major legal uncertainty for users.  
In the third area of this IA, the preferred options would support SMEs  (right holders) in concluding agreements 
with online content services. Where they would generate obligations for SMEs, exemptions or mitigating measures 
have not been deemed appropriate as they  may create possibilities for businesses to circumvent the obligations 
and would not allow reaching the desired objectives.  

Will there be significant impacts on national budgets and administrations?  
The  preferred  options  will  not  generate  any  significant  impacts  on  national  budgets  or  administrations. 
Nevertheless,  certain  options  include  specific  obligations  for  MS,  e.g.  identification  or  creation  of  an  impartial 
instance to facilitate negotiation between the relevant parties for the licensing of VoD rights; measures to ensure 
the visibility of licences for educational uses; organisation of stakeholders' dialogues on the reporting to authors 
and  performers  and  setting  up  of  a  dispute  resolution  mechanism  between  authors/performers  and  their 
contractual counterparties. Indications of costs, where available, are mentioned in the relevant sections of the IA.  

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Will there be other significant impacts?  
N.a.  

Proportionality?  

The preferred options have been elaborated in a way to effectively address the original problems without going 
beyond  what  is  needed  to  achieve  the  objectives.  Other  options,  sometimes  with  a  wider  scope,  have  been 
excluded as they would not allow a balanced and proportionate response to the problems presented in this IA. 

D. Follow up 

When will the policy be reviewed?  
Specific  indicators  have  been  defined  to  monitor  progress  in  the  achievement  of  the  objectives,  with  data 
collection foreseen to take place every 2 or 3 years. A comprehensive evaluation could take place at the latest 10 
years after the adoption of the legislative measures, in order to measure their impacts and added value.  

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