La fase de exploración (1947-1951) Los inicios del turismo de masas.

2.5.1

To what extent has the EU legislative framework been able to keep up with

technological developments, in particular with the digital transformation?

As already clarified throughout this report, the EU legislative framework, and in particular the InfoSoc Directive, can be considered increasingly out-dated in light of technological developments: not only are the exceptions and limitations included in the closed list under Article 5 now increasingly misaligned with technological developments; they also potentially limit the development of welfare-enhancing uses of information. Moreover, enforcement mechanisms outlined in the InfoSoc and IPRED Directives have been largely overtaken by technology, and countries today hardly ever rely on civil litigation to enforce copyright laws. Most notably, the lack of certainty over the application of a number of exceptions, including the one on text and data mining, represents an outstanding oversight of the EU acquis on copyright. For example, when it comes to libraries and similar institutions the current set of exceptions and limitations does not cover e-lending and hamper mass digitisation projects, let alone new options for the ‘online’ consultation of digitised content. Similarly, unevenly implemented exceptions for teaching and research potentially impinge on the provision of pan-European e-learning services as well as on the creation of a truly integrated European Research Area. The creation of UGC and more simply the sharing of pictures on social networks encounter substantial obstacles in the fragmentation and uncertainty of the current EU copyright framework.

Interestingly, a recent report for the European Commission clearly highlights that text and data mining “is useful to researchers of all kinds, from historians to medical experts, and its methods are relevant to organisations throughout the public and private sectors”. In addition, text and data mining lowers research costs, and as such can lower barriers to entry in a number of markets for small and medium-sized enterprises and micro-enterprises. Europe’s uncertain legal treatment of text and data mining is even more serious in light of the emerging automation of service industries (automation of thinking), as well as the widespread use of data-driven analytics in the Internet of Things and its industrial applications (Industry 4.0). The above-mentioned report confirms that European researchers “may be falling behind, especially with regard to researchers in the United States” in this field, and that such a lag “results, at least in part, from the nature of Europe’s laws with regard to copyright, database protection and, perhaps increasingly, data privacy” (European Commission, 2014).

In summary, the relevance of the overall approach adopted by the InfoSoc Directive and its subsequent legislation deserves urgent and careful adaptation to address the problems and gaps identified in the scope of the rights and exceptions, the existing emphasis on

‘copy’ rights rather than authorship and also to address the insufficiencies concerning enforcement.

2.5.2

What are the likely efficiency losses associated with the current inadequacy

of the InfoSoc Directive?

Section 2.2 above already identified a number of inefficiencies associated with the current inadequacy of the InfoSoc Directive. Generally speaking, such inefficiencies can be divided into the following categories:

 Productive inefficiency. Current legislation in the field of copyright increases costs for content producers and distributors, and also limits the availability of content for end- users. In particular, inefficient enforcement limits incentives to produce and distribute new valuable content for right-holders. In addition, current rules do not incentivise those users who would make use of such content to create UGC or to engage in text and data mining based activities. This means that the overall content production is hampered by an unnecessarily complex and restrictive acquis, and this might explain differences in the relative performance of the EU vis-à-vis its global competitors in specific areas (e.g. as reported by the recent Report on a Commission High Level Group, in the area of text and data mining, in which European researchers seem to be lagging behind their US counterparts, who reportedly benefited from the existence of the more flexible ‘fair use’ doctrine as opposed to the more rigid and still unevenly implemented set of exceptions and limitations existing in the EU-28). Although any attempt to quantify the relative weight of the InfoSoc Directive and related legislation on Europe’s digital content production are necessarily doomed to inaccuracy, there are good reasons to believe that both the production of knowledge (e.g. through exceptions for teaching purposes and text and data mining) and its dissemination (e.g. through clearer and more future-proof rules on panorama exceptions, e-lending) would greatly benefit from the availability of more up-to-date rules, which would couple greater effectiveness in enforcement with more user-friendly rules on content consumption, reuse and transformation.

 Allocative inefficiency. This effect refers to the inefficient allocation of resources through the market mechanism. As already mentioned throughout the report, legal fragmentation and limits to the availability of content in the Internal Market fundamentally reduce the value of the Internet for European end-users, because the end-to-end design of the Internet (i.e., the ability of each user to communicate and exchange files with every other user) cannot be fully exploited to share and access all sorts of content. This is, to some extent, also a violation of basic users’ rights as typically included in net neutrality legislation, normally aimed at preserving users’ possibility to access any content, any time, through any device and anywhere (and thus also, inevitably, from any Member State). The untapped consumer and producer surplus brought on by the lack of availability of content and by widespread copyright infringement account for reductions in allocative efficiency that reverberate on the value of digital content available online, and hence also on the value of Internet access for end-users. Nevertheless, this does not necessarily lead to the conclusion that all price discrimination in the Single Market should be prohibited: as noted throughout this Study, there are several instances of price- discrimination, even those based on geo-blocking practices, which can be considered as welfare-enhancing, not welfare-reducing. The difficulty in the reform exercise consists precisely in singling out welfare-reducing practices and curbing them while treating pro-

competitive, welfare-enhancing forms of price discrimination as perfectly viable business solutions.

 Dynamic inefficiency. This type of inefficiency refers to the negative impact that an inadequate copyright acquis can exert on innovation and the production of new content. Again, typical examples are the dissuasive effects of piracy and ineffective enforcement, and also the impact of current uncertainty and existing legal constraints on fast growing new forms of content production such as UGC and text and data mining based activities. Crucially, the reduction in quantity and quality of content available to end-users can also lead to a reduction in the demand for improved Internet connectivity and bandwidth, and could thus also end up stifling incentives to deploy broadband networks due to a sustained slowdown in demand from end-users. As a matter of fact, greater incentives to deploy ultra-high speed broadband have been attributed by experts not only to a more favourable regulatory treatment (e.g. the absence of network access obligations for broadband networks that characterises the Federal Communications Commission regulatory approach since 2003), but also to greater user demand triggered by greater availability of content of interest for end-users.

Finally, and even more important, it is undeniable that, whatever the negative impact associated with the sources of inefficiency identified, it is only likely to increase over time as the Internet permeates a growing number of activities and carries an even larger share of copyrighted creative content. As already mentioned in the previous Sections, the growth of Internet content markets has been consistently stronger than that of traditional media markets in recent years, and the trend is likely to continue in the coming years. The advent of the Internet of Things and the growing deployment of ultra-fast broadband networks is expected to further boost this trend, leading Internet-based content dissemination, production and consumption to dominate the market in the years to come.