Memo: European policy: Gallo report


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Memo: European policy: Gallo report

  1. 1. ADVICE  ON  DRAFT  “GALLO  REPORT”     (  While  the  report  2009/2178(INI)  looks  at  counterfeiting  in  general,  this  text  merely  looks   at  this  report  as  a  reaction  from  the  European  Parliament  to  the  Anti-­Counterfeiting  Trade   Agreement  (‘ACTA’)  and  the  implications  for  Internet  )   EXECUTIVE  SUMMARY       The   Report   2009/2178(INI),   proposed   by   Rapporteur   Marianne   Gallo   (‘Gallo   report’),   claims   that   counterfeiting   through   peer   to   peer   (‘p2p’)   networks  is  one  of  the  major  causes  for  job  losses  and  loss  of  net  revenue  for  the  European   industry.  It  proposes  measures,  in  particular  the  control  of  Internet  Service  Providers  (‘ISP),   to   protect   Intellectual   Property   Rights   (‘IPR’).   It   sees   control   of   IPR   infringements   as   necessary   for   the   creation   of   a   single   European   market.   The   measures   proposed   in   the   report   do  not  provide  a  solution  to  the  problem  of  IPR  infringements,  as  they  do  not  guarantee  the   principle   of   Net   Neutrality.   There   is   a   clear   mismatch   between   current   IPR   laws   and   online   demand,  which  asks  for  an  assessment  of  previous  directives  and  new  data  on  the  influence   of  legal  and  illegal  file  sharing  on  the  European  economy.   (1-­15)  (16-­20)  EUROPEAN  OBSERVATORY  ON  COUNTERFEITING  AND  PIRACY       The   Gallo   report   calls   for   sanctions   to   counterfeiting   and   IPR   infringements   to   minimize   job   losses   and   loss   of   net   revenues,   but   lacks   exact   data   of   the   negative   effect   of   online   illegal   file   sharing  (‘piracy’)  on  the  European  economy  as  such.  Counterfeiting  of  products  and  distribution   of   copied   multimedia   might   both   constitute   illegal   activities,   it   is   however   necessary   to   differentiate   between   them   as   well   as   to   keep   the   context   in   mind:   the   Internet.   The   problem   needs  to  be  defined  better:  not  all  file  sharing  through  p2p  on  the  internet  is  illegal  and  should   thus   not   be   continuously   referred   to   as   piracy.   The   available   data   is   not   consistent:   there   is   no   scientific   data   that   clearly   shows   the   effect   of   file   sharing   and   /   or   piracy   on   the   European   Economy;  while  some  research  suggests  the  impact  is  negative,  other  research  shows  a  positive   impact  of  (illegal)  downloading  and  file  sharing  on  the  European  economy.    i       There  is  a  clear  need  for  objective  data  on  the  size,  scale  and  effects  of  piracy,  and  more  general   of  legal  and  illegal  file  sharing.  The  recently  created  European  Observatory  on  Counterfeiting  and   Piracy  is  in  the  best  position  to  head  an  objective  investigation  on  this  matter  to  clearly  outline   the   problems   and   define   possible   solutions.   This   needs   to   be   done   in   collaboration   with   other   national  and  EU  statistics  gathering  bodies  that  are  already  in  place  to  avoid  doubling  the  work.   In   particular,   the   Directive   2004/48/EC   of   the   European   Parliament   and   of   the   Council   of   29   April  2004  on  the  enforcement  of  intellectual  property  rights,  also  known  as  Intellectual  Property   Rights  Enforcement  Directive  (‘IPRED’),  needs  to  be  assessed  before  new  steps  can  be  taken.       (21-­24)  CULTIVATING  CONSUMER  AWARENESS         There  is  a  demand  for  content,  which  is  not  currently  being  met  by  content  owners,  resulting  in   illegal   file   sharing.   More   than   a   quarter   of   all   recorded   music   industry   revenues   worldwide   come   from   digital   channels,   however,   according   to   the   2010   International   Federation   of   the   Phonographic   Industry   (‘IFPI’)   digital   music   report,   there   were   only   50   licensed   online   music   services  in  2003.   ii  A  competitive  content  market  and  an  appropriate  legal  framework  will  enable   easy  legal  access  to  content.  These  are  essential  preconditions  to  the  creation  of  a  culture  of  legal,   rather  than  illegal,  consumption.  While  there  is  the  issue  of  IPR  infringement,  one  should  look  at   this  as  a  consequence  of  current  legislation  not  meeting  current  demand.  iii       The   idea   of   a   levy   on   Internet   connections   as   a   way   of   funding   artists   or   somehow   “compensating”   them   for   illegal   downloads   is   not   targeted   at   those   who   download   illegally,   it   justifies  illegal  behaviour  and  destroys  any  chance  of  creating  legal  ways  of  consuming  content,   and  is  very  unlikely  to  accurately  compensate  artists  in  the  right  way.       It   is   important   to   establish   a   dialogue   on   practical   measures   to   raise   awareness   of   the   current   online   IPR   infringements   between   all   concerned   parties,   including   ISPs,   rights-­‐holders   and   consumers'  organisations.  While  cultivating  consumer  awareness  to  reduce  IPR  infringements  is  
  2. 2. ADVICE  ON  DRAFT  “GALLO  REPORT”     important,   there   also   is   a   need   to   look   at   other   problems,   including   pricing,   availability   of   legal   files,  etc.  This  again  calls  for  new  research.     (25-­38)  TACKLING  ON-­LINE  INFRINGEMENT  AND  PROTECTING  IPRS  ON  THE  INTERNET     Holding   Internet   intermediaries   liable   for   misuse   of   their   services   by   third   parties   violates   the   principle  of  Net  Neutrality,  the  core  principle  for  the  functioning  of  the  Information  Society  that   was   enacted   in   the   2000   Electronic   Commerce   Directive.   It   sets   the   legal   framework   for   ISP   liability   and   prevents   Member   States   from   requiring   ISPs   to   carry   out   surveillance   of   their   services.  iv       The   protection   of   fundamental   rights   must   be   taken   into   account   in   all   policy   proposals   or   legislative  initiatives.  These  aspects  also  need  to  be  considered  in  all  processes  relating  to  impact   assessments  of  previous  proposals.  v  Any  voluntary  measures  must  take  place,  in  any  case,  within   the   boundaries   of   the   legal   framework   and   with   the   respect   of   the   fundamental   rights   of   citizens,   including  privacy.       Any   measures   taken   to   enforce   IPRs   must   respect   the   European   Convention   for   the   Protection   of   Human   Rights   and   Fundamental   Freedoms,   as   stated   in   Article   1.3.a   of   the   Framework   Directive.   vi   In   particular,   they   must   respect   the   presumption   of   innocence   and   the   right   to   privacy.   With   regard   to   any   measures   of   Member   States   taken   on   their   Internet   access   (e.g.   to   fight   child   pornography  or  other  illegal  activities),  citizens  in  the  EU  are  entitled  to  a  prior  fair  and  impartial   procedure,  including  the  right  to  be  heard.       (39-­46)  INTERNATIONAL  DIMENSION       Protection  and  enforcement  of  intellectual  property  are  crucial  for  the  EU's  ability  to  compete  in   the   global   economy.   However,   as   stated   before,   the   legislation   in   place   does   not   meet   consumer’s   demand,  which  leads  to  illegal  file  sharing  online.  For  European  citizens  and  industry  alike,  the   harmonisation   of   exceptions   is   a   necessary   step   in   order   to   facilitate   cross-­‐border   trade,   and   create   equality   and   clarity   before   the   law.   vii   The   creation   of   a   single   European   online   market   would  be  an  important  step  forward  for  the  growth  of  the  single  market  in  general.       The   problem   of   online   IPR   infringements   is   a   cross-­‐border   issue:   any   agreement   that   will   be   made   on   the   issue   of   IPR   needs   to   involve   national   and   multilateral   actors   and   agreements.   Copyright  regulates  the  flow  of  consumer  as  well  as  knowledge  goods  in  the  single  market.  This   flow  can  easily  be  hampered  by  inadequate  IPR  legislation.  The  negotiations  on  the  multilateral   agreements,   such   as   ACTA,   thus   need   to   continue.   Negotiations   need   to   be   conducted   in   a   transparent   way,   according   to   the   Treaty   of   Lisbon.   Before   voting   on   a   particular   agreement,   it   needs   to   be   assessed   if   they   respect   Resolution   2007/2153/EC   viii   and   are   in   line   with   EU   and   national  rules  on  IPR  that  are  already  in  place.             RECOMMENDATION       There  is  a  clear  mismatch  between  current  international  IPR  laws  and  the  demand  of  multimedia   online,   which   requires   new   data   to   understand   the   relationship   between   piracy   and   the   European   economy.   The   European   Observatory   on   Counterfeiting   and   Piracy   should   be   tasked   with   conducting   an   objective   and   independent   research   in   collaboration   with   (trans-­‐)   national   institutional  organizations.  The  data  can  serve  as  basis  to  propose  other  measures  to  reduce  the   IPR   infringements,   while   protecting   online   file   sharing   to   assure   creativity   and   respecting   the   eCommerce   agreement   on   Net   neutrality   and   the   EU   Conventions.   A   response   to   this   problem   requires  a  dialogue  between  all  actors,  from  ISPs  to  transnational  organizations.  Action  needs  to   be   taken   on   national,   European   and   international   level   –   respecting   the   role   of   national   governments  and  their  IPR  enforcing  institutions.    
  3. 3. ADVICE  ON  DRAFT  “GALLO  REPORT”       FOOTNOTES                                                                                                                     i  La  Quadrature.  Internet.     ii  IFPI.  Internet.     iii  European  Union  adopting  regulations  that  will  penalize  Internet  users,  RSF  (2009).  Internet.­‐union-­‐european-­‐union-­‐adopting-­‐21-­‐10-­‐2009,34794     iv  Reporters  without  borders.  Idem.   v  Françoise  Castex,  Christian  Engström.  Amendments  on  Directive  2009/2178  (INI)  on  enhancing   the  enforcement  of  intellectual  property  rights  in  the  internal  market.   vi  Article  1.3.a  of  the  Framework  Directive:  “Measures  taken  by  Member  States  regarding  end-­‐ users'  access  to  or  use  of  services  and  applications  through  electronic  communications  networks   shall  respect  the  fundamental  rights  and  freedoms  of  natural  persons,  as  guaranteed  by  the   European  Convention  for  the  Protection  of  Human  Rights  and  Fundamental  Freedoms  and   general  principles  of  Community  law.”   vii  Copyright  for  Creativity.  Internet.     viii  Resolution  2007/2153/EC  calls  on  Member  States  to  avoid  adopting  measures  conflicting  with   civil   liberties   and   human   rights   and   with   the   principles   of   proportionality,   effectiveness   and   dissuasiveness,  such  as  the  interruption  of  Internet  access.