European Commission Wants Consumer Friendly Market for Content

With a lot of attention being paid to the European Commission settling the Apple iTunes anti-trust case, it’s interesting to note what the European Commission has called for earlier this week with things like DRM and file-sharing.

Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes

In a press release, the European Commission said, “EU citizens should be able to enjoy easier and faster access to a rich variety of music, TV programmes, films or games via the Internet, mobile phones or other devices. The Commission therefore encourages the content industry, telecoms companies and Internet service providers to work closely together to make available more content online, while at the same time ensuring a robust protection of intellectual property rights. The Commission also wants to facilitate copyright licences for online content covering the territory of several or all of the EU Member States.”

“Europe’s content sector is suffering under its regulatory fragmentation, under its lack of clear, consumer-friendly rules for accessing copyright-protected online content, and serious disagreements between stakeholders about fundamental issues such as levies and private copying”, said Viviane Reding, EU Commissioner for the Information Society and Media. “We have to make a choice in Europe: Do we want to have a strong music, film and games industry? Then we should give industry legal certainty, content creators a fair remuneration and consumers broad access to a rich diversity of content online. I will work on these issues with my colleagues in the Commission and propose a Recommendation by mid-2008 on new ways for achieving a single market for online content. I ask in particular Europe’s consumer associations to take a very active part in this debate. Because for online content, the demand and preferences of 500 million potential consumers are the strongest arguments for achieving new solutions at EU level.”

The main points that the commission is the following:

Availability of creative content: Owners of creative content are sometimes reluctant to make it available for online distribution. Amongst the reasons for this are concerns over illegal downloads and online “piracy”. In addition, there are across the EU major difficulties in negotiating and settling terms of trade between the right owners and the online distributors of creative content. The Commission is therefore today strongly encouraging stakeholders to find innovative and collaborative solutions to exploit the market for content online. A first step into this direction was taken in 2006 with the “European Film Online Charter”, but the Commission notes a lack of ambition and implementation in the follow-up to this initiative.
Multi-territory licensing for creative content: Online environments such as the Internet and mobile services inherently allow content services to be made available across the single European market. However, the lack of multi-territory copyright licences — allowing the use of content in several or all EU Member States — makes it difficult for online services to be deployed across Europe and to benefit from economies of scale. While it is first for rights holders to appreciate the potential commercial benefits of multi-territory licensing, there is an underlying need, also from a consumer perspective, to improve on existing licensing mechanisms.
Interoperability and transparency of Digital Rights Management systems (DRMs): Technologies that support the management of rights and the fair remuneration of creators in an online environment can be a key enabler for development of innovative business models. Lengthy discussions amongst stakeholders have yet to lead to the deployment of interoperable and user-friendly DRM solutions. The Commission therefore seeks to establish a framework for DRM transparency concerning, amongst others, the interoperability of different DRMs, and ensuring that consumers are properly informed of any usage restrictions placed on downloaded content, as well as of the interoperability of related online services.
Legal offers and piracy: Piracy, including the unauthorised up- and downloading of copyrighted content, remains a central concern. The Commission intends to instigate co-operation procedures (“codes of conduct”) between access/service providers, right holders and consumers to ensure not only the widespread offer of attractive content online, but also adequate protection of copyrighted works, and close cooperation on the fight against piracy and unauthorised file-sharing.

The first point is interesting given that rights-holders shut down the original Napster was in 2001. Ever since then, the industry has developed a reputation of trying to keep to a business model suitable in an era before the internet. Since then, it wasn’t until 2004 that Europeans saw, for instance, EMI selling music on iTunes – a gap of over three years for the citizens of the continent – more than enough time to find another network or two in the mean time.

The second point is interesting given that it’s a recognition that borders, as a general rule, vanish on the internet. It follows up the first point nicely because it is inherently one of the major problems record labels have been struggling to come to terms with. It’s not just music, but movies as well. Region coding in DVDs, for instance put borders on specific formats of DVDs. Supposedly, it was to prevent the spread of physical piracy, but of course, that’s where DVDJon came into the content scene and broke the DRM (Digital Rights Management) and kicked off the debate on the use of DRM which, in this case, put the borders on content in the first place. Now the Commission wants to put an end to this, at least within Europe. Some observers might point out that it would be best applied throughout the world to better adapt to what the internet has brought to everyone. Licenses such as Creative Commons and the GPL have adapted to this, but it’s highly unlikely that major companies like Adobe or record labels such as Warner would put such licensed on all of their content because, to them, it doesn’t protect their business models.

A framework for transparency over DRM will likely be a welcome initiative among many consumer advocates, but even the Sony BMG DRM (namely the one used in the XCP rootkit fiasco) was disclosed to a degree (though the rootkit itself was not disclosed legally) It may be interesting to see what this “transparency” initiative really means and what it would look like.

For the last point, it’s currently unclear whether or not the idea is to right file-sharing with the other three points or if they are referring to something else like the controversial file-sharing lawsuits occurring in the United States.

Drew Wilson on Twitter: @icecube85 and Google+.

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