The
report, which was carried out independently at the Commission's
request, concluded that the Directive must be changed if the
potential of Europe as a single marketplace for online services is
to be realised.
"The Directive has at best only partly achieved its main goal of
promoting growth and innovation in online content services," said
the report. "As our benchmark test has revealed, the Directive
deserves particularly low marks for its (lack of) harmonising
effect and its (lack of) legal certainty."
The Copyright Directive was passed in 2001 and was intended to
update EU law on copyright for the internet age. Amongst other
things it protected the use of digital rights management
technology.
The report, carried out by the Institute for Information Law at
the University of Amsterdam and the Queen Mary Intellectual
Property Centre in London, investigated the various implementations
of the Directive into member states's laws, and the effect the
Directive has had on the market.
Its
most serious criticisms were reserved for the effects the Directive
was found to have had on the market. It found that a lack of
specificity in some parts of the Directive served to undermine its
very purpose.
The report said a particular problem existed in the vagueness of
the Directive's rules on when a country can enshrine exceptions to
it and limitations to its laws in their own national laws.
"Here, actual harmonisation has hardly been achieved, for a
number of reasons. In the first place, the provisions of the
Directive are mostly phrased in broad and categorical terms,
leaving wide discretion to the member states," said the report.
"Even worse, from a perspective of approximation, is the
Directive’s failure to come up with a set of mandatory
limitations."
"Member states are left with near-total freedom to pick and
choose from the Directive list of optional limitations those that
they see fit. The result is a mosaic of exceptions and limitations
that vary from Member State to Member State, which might seriously
impede the establishment of cross-border online content services,"
it said.
While the Directive was intended to make doing business across
European borders cheaper and easier by providing a common legal
framework, it has failed in relation to the rules on limitations
and exceptions, the report said.
"As to limitations, the lack of harmonised rules directly
affects legal certainty of market players offering online services
across national borders," it said. "A serious consequence of the
prevailing uncertainty regarding the scope of limitations in the
digital networked environment has been to force users to negotiate
the conditions of use of protected works with every single rights
holder, for every territory involved. This clearly raises
transaction costs."
The report said that the Directive changed the philosophical as
well as the technical legal landscape. It tipped the balance of
power in favour of rights holders, it said, and away from
users.
"The broad scope of the right of reproduction … gives right
holders near-absolute control over acts which in the off-line world
were never the right holder’s prerogative," it said.
The report recommended introducing some form of consistency by
creating a short list of mandatory exemptions to the restrictions
imposed by the Directive. Countries would be permitted to add
further exemptions if they wished.
The report was scathing about the Directive's rules on digital
rights management. "The Directive’s convoluted rules on [DRM] have
little more to offer to the member states and its market players
than confusion, legal uncertainty and disharmonisation," it
said.
It recommended that Europe follow Germany's lead in making it
compulsory to declare on a product that digital rights management
is a part of that product, and to declare the "scope and
characteristics" of that technology to consumers.
