Internal Market and Services DG
Knowledge-based Economy
Enforcement of Intellectual Property Rights
Brussels,
MARKT/D3/JP/jn D(2010) Ares S:
DRAFT Summary
Subject:Stakeholders' dialogue on illegal up- and downloading –1July2010.
Those present
Chair:Margot FröhlingerDG Internal Market and Services
Stakeholders: Michael Bartholomew ETNO
Fiona TaylorETNO
Patric HiseliusETNO
Innocenzo GennaEuroIspa
Andrea D'InceccoEuroIspa
Jaymeen Patel Telefonica
Marta MarescaTelecom Italia
Caterina BortoliniTelecom Italia
Frances MooreIFPI
Olivia RegnierIFPI
Jo OliverIFPI
Jeremy BanksIFPI
Gabriela LopesIFPI
Simon MilnerBT
Wouter GekiereEBU
Vicky Hanley-Emilsson ECTA
Chris MarchicMPA
Ted ShapiroMPA
Peter WildingACT
Victoriano DariasGESAC
Guenaëlle Collet AEPO-ARTIS
Mathieu MoreuilSROC
Dara MacGreevy ISFE
Simon LittleISFE
Sophie ScriveENPA
Enrico TurrinFEP
Daphne YaoVirgin Media
Silvie ForbinVivendi
Monica ArinoOfcom
Johannes StudingerUniEuropa
Commission:Alvydas StančikasDG Internal Market and Services
Corinna UlrichDG Internal Market and Services
Joep van der VeerDG Internal Market and Services
Justyna PetschDG Internal Market and Services
Benoît LoryDG Internal Market and Services
Zuzana HeckovaDG Internal Market and Services
Andrea Glorioso DG Information Society and Media
Bernhard MaherDG Information Society and Media
Francesco PirinaDG Health and Consumers
Alexandra Iliopoulou DG Trade
The eighthmeeting of the Stakeholders'Dialogue on illegal up- and downloading took place on the 1st July 2010, under the chair of Mrs. Fröhlinger. The meetingfocused on the economic implications of illegal up- and downloading and reasons for consumers' behaviour. An inventory of studies on the scale and economic implications of illegal up- and downloading was presented. This was followed by the presentation of the results of the follow-up study on the legal framework, regarding the interaction between copyright enforcement on the Internet and data protection in a number of additional Member States. The meeting ended with a discussion on different options for a possible follow up to the Dialogue.
The next meeting will take place on the 10th of September2010.
Introduction from the Chair
The Chair welcomed the participants andrecalled that the purpose of the meeting was to discussand exchange viewsonthe economic implications of illegal up- and downloadingfor rightholders, ISPs and the economy as a whole. The Chair noted that an inventory of studies on economic data had been compiled and sent to the participants. The participants were invited to provide DG MARKT withany studies that had not been included. The Chair explained that the variety of studies presenting different and often contradictory figures and conclusions, hadmade it impossible to make an overall assessment of theeconomicimplications. DG MARKThad therefore decided toleave the overall assessment to the study, which is about to be launched. In this respect, the tenderfor the study to assessthe overall scope and economic implications of counterfeiting and piracyhad been published, and 10 offershad been received. The overall objective of the study isto assess existing economic studies and data, to develop a sound methodology for data collection and analysis and to lay the foundation for future robust and reliable data. Participants were assured that they would be closely involved in the work of the future contractor.
Presentations on the economic implication of illegal up- and downloading
IFPI, Gabriela Lopes
IFPI presented the impact of piracy on the EU's economy and on the recording industry in particular. It focused mainly onthe recently published TERA study, explaining that the industries mostlyaffected by piracy experienced retail revenue losses of € 10 billionand annuallylost were more than 185.000 jobs. The creative industries could expect cumulative retail revenue losses of as much as € 240 billion by 2015, resulting in the loss of 1.2 million jobs. Furthermore, IFPI explained that the methodology used in the studywas not based on the assumption that every infringement resulted in a lost sale, but on a moderate, conservative ratio of 10%. In reference to the Jupiter research of 2009, IFPI explained that the majority of consumers engaged in file sharing do not buy music and that the overall impact of file sharing on music spending is negative. This research found a clear link between per capita spending on music and P2P penetration, indicating that the markets with the highest incidence of unauthorised file sharingare those with the weakest, per capita, spending on music. IFPI also reminded participants that 2009 was the 8th consecutive year of decline for the music industry. The European music market had fallen by 41% in value between 2001 and 2009, despite the fact that during the same periodthere were 260 online music services licensed in Europe and multiple business models legally offering music online. In conclusion, IFPI stressed that the main driver is that pirated content is available free of charge and not the alleged lack of attractive legal services.
MPA, Ted Shapiro
The MPA explained that P2P traffic has diminished in terms of percentage of overall internet traffic. The MPA explained that there are also different trends,that reflecta changing audience. The easier the access to illegal content is, the wider the audience becomes.MPAexplained that illegal sites incur very little or nocosts. Theyavoid taxes and earn easy money, which is a clear regulatory inequality. Moreover, some of the illegal sites also earn revenue from advertising. Finally, the MPA showed a comparativelist of site traffic, concluding that illegal sites are constantly getting wealthier.
SROC, Mathieu Moreuil
SROC explained the particular issues facing the sports sector as a result of piracy. It stressed that thelegitimate revenuesearned from sports streaming is often reinvested in the sports value chain, including grass-root sports, which is of societal interest.
SROC underlined that the sale of broadcast rights represents a major source of revenue for sports rights owners. However, the most popular sports transmissionsusehundreds of unauthorised streams, offering free and live retransmissions to audiences of over 1millionviewers. This starts to bea real threat to the sector.
SROC explained that live streaming of sporting events is mainly based on two types of technology: unicast and peer-to-peer. Unicast iscontent streaming directly from a server to a viewer, whilea peer-to-peer exchange takes placebetween viewers. SROC informedparticipants that the monitoring of a Premier League game from April 2008 revealed anillicit audience of 238 thousand viewers. Out of these viewers, 13% were from the UK where legal offers are actually available. SROC concluded that piracy threatens the sports reinvestment model and subsequently impacts on investment in sports development at various levels, including investment in talent development, community programmes etc.
Presentation of a follow up study on Online Copyright Enforcement and Data Protection
TheInternal Market and ServicesDG presented the results of a follow up study on the correlation between enforcement of copyright on the Internet and data protection legislation in three countries, namely the United Kingdom, Poland and the Netherlands. The results to a large extent confirmed the findings of a previous, similar study from November 2009 coveringAustria, Belgium, France, Germany, Spain and Sweden. Both studies are available on the website of the Internal Market and Services DG. [1][2]
Generally, IP addresses have been found to constitute personal data. Disclosure of users' identities by ISPs to rightholders is,in general, authorized in the context of criminal proceedings, but is subject to restrictions relating to data protection in the context of civil enforcement. The Dutch courts have provided for some guidance in respect of voluntary disclosure of users' details by ISPs to rightholders (Lycos/Pessers case). In the UK, new legislation (the Digital Economy Act 2010) has introduced a new set of obligations on ISPs in relation to copyright infringement aimed particularly at P2P activities and illicit file sharing.
Ways forward for the Dialogue
The Chair explained possibleoptions, concerning the future of the Dialogue: These were:
- to wrap-up the current Dialogue and consolidate its results in a concise synthesis report;
- to continue with the Stakeholders'Dialogue and focus on the IPR Enforcement Directive, in the context of illegal up- and downloading;
- to continue with the Stakeholders' Dialogue and focus on preparing an MoU on cooperation between rights holders and Internet Service Providers in a limited number of areas.
Various stakeholders expressed their views:
ETNO
ETNO confirmed thatso far the Dialogue had been a very helpful exercise, whichhad helped to broaden the understanding ofthe various interestsand concerns of the participating stakeholders.
ETNO proposed that before deciding on the future of the Dialogue, it would be useful to make an evaluation of the process, summarised ina jointly agreed report.This would maketheDialogue more transparent and make it easier to agree on the modalities of the next steps.
Concerning the possibility of an MoU, ETNOpointed out that the whole process of elaborating an MoU needs to be open and transparent and should involve all stakeholders. ETNO added that an MoU should not include provisions concerning individual warning letters, technical measures, monitoring of online activities by ISPs, nor awareness campaigns funded by ISPs only. ETNO reiterated its view that the participation of the consumers and data protection authorities is needed to ensure credibility. ETNO stressed that any cooperation should always stay within the boundaries of the current legal framework.
ETNO indicated that they could consider future work on the online aspects of the IPR Enforcement Directive, but insisted on transparency. ETNOfelt that ISPs should also be included in the process of the work on the Enforcement Directive,carried out by the Observatory's legal sub group.
In conclusion, ETNO proposed an additional option, where, first,the participants should agree on a synthesis report,summarisingthe work of the Dialogue. Afterwards, it could be discussed whether to work on an MoU and/oron the Enforcement Directive.
BT
In view of a recent failure of a similar attempt in the UK, BT was critical of the idea of an MoU. BT suggested that the preferred option would to continue the Dialogue in the context of the Enforcement Directive and to produce a report summarising the whole exercise.
EuroISPA
EuroISPA stated that both an MoU and work on the Enforcement Directive could be a good way forward. Drawing up a synthesis report, summarizing the work of the Dialogue was also considered a good idea.
EuroISPA underlined that it was important for the work of the Dialogue to invite representativesofthe data protectionauthoritiesand consumers. It was also suggested that participants need to have clear ideas what can be tackled in the MoU. The promotion of legal offers and awareness campaigns could be suitable issues.
CableEurope
CableEurope shared the positions presented by ETNO and EuroISPA.
MPA
The MPA stated that the MoU could be a good option. However, before launching work, the participants should discuss and agreeon the topics tobe included. The MPA agreed that a synthesis report would be a good idea as long as it does not become in itself an issue for debate.Finally, the MPA explained that they would like to continue with theDialogue in the context of the Enforcement Directive, in parallel to the work on the MoU and thesynthesis report.
IFPI
IFPI stressed that for the music industry time is extremely important.Therefore,they would accept the idea of a synthesis report, but suggested that it should be a parallel exercise to the other areas of work and should not slow down work on an MoU or a Dialogue on the Enforcement Directive. IFPI supported the suggestions for inclusion in the MoU, such as public awareness on the economic and cultural importance of copyright to the digital economy and raising awareness on the existence of legal offers. However, IFPI stressed that in terms of presentation it had to be clear that there was already a significant number of legal offers available.
SROC
SROC agreed that there was a need for a clear agreement on what should be included in an MoU and that it should not be a precondition to the work on the IPR Enforcement Directive.
ENPA and AEPO-ARTIS
Both supported the creative industry's position and suggested to continue a Dialogue in the context of the Enforcement Directive, but advocatedmore focus on specific sectors.
ISFE
ISFE suggested that a public synthesis report may change the dynamics of the Dialogue and suggested that an internal report could be a solution. ISFE supported the idea of an MoU and the continuation of theDialogue in the context of the Enforcement Directive.
EBU
EBU supportedthe suggested synthesis report, anMoU and the continuation of a Dialogue in the context of the Enforcement Directive,stressing that the involvement of representatives from data protection authorities and from consumers is crucial.
FEP
FEP supported the option to work on an MoU and to continue a Dialogue in the context of the Enforcement Directive.
Conclusions
Synthesis Report
The Chair summarised the discussion,concluding that there was a strong request from the ISPs to have an agreed synthesis report, which would be made public. The Chair did not note any strong objection from rightholders to this proposition, except the concern that this report could become itself a subject of much debate. The Chair explained that the report could constitute a synthesis of past meetings and that there should be no confidential information included. The Chair announced that the Commission's services would prepare a draft for comments and agreement by the participants.Ifno agreement could be reached, it could beconverted into a Commission document. The report would bemade public to ensurefull transparency.
Dialogue in the context of the Enforcement Directive
Concerning the continuation of the Dialogue in the context of the Enforcement Directive, the Chair explained that in the Communication on the Digital Agenda, the Commission has announced to launch a Stakeholders' Dialogue in the context of the revision of the Enforcement Directive. The existing Dialogue could provide a good basis for this, given that the group functions well and that participants have developed a good understanding of each others position and concerns.
The Chair acknowledged the importance of involving representatives ofconsumers and of data protection authorities. However, the Chair reminded the participants that BEUChad been invited many times and had chosen not to accept the invitation. The Chair underlined that this exercise should be seen by consumers' organisations as an opportunity to make their views known.
The Chair also indicated that additional internet companies could be invited to the Dialogue and asked participants for suggestions.
MoU
The Chair concluded that a possible MoU could mainly include public awareness and the promotion of legal offers. It would not deal with technical measures and cooperation between ISPs and rightholders would in any event remain within the boundaries of the existing legal framework.
Observatory legal sub group/ Revision of the Enforcement Directive
In reply to ETNO, the Chair also explained that the Legal Subgroup deals with many issues related to IPR Enforcement which often have nothing to do withillegal up- and downloading. However, to the extent the Legal Subgroup is going to deal with Internet related issues, participants of the Stakeholders' Dialogue could be invited to attend the meetings of the Subgroup.
Therefore, the work of the Dialogue will be complementary to the work of the Observatory's legislative group, where different experts specialising in legal aspects relating to IPR litigation are involved.
Operational conclusions
The Chair announced that the draft Synthesis Report will be drafted and sent to the participants before the Summer break. The participants should seek to reach an agreement on it immediately after the Summer break.TheDialogue could then continue to work on the MoU and the Enforcement Directive.Consumers organisations and representatives from data protection authorities would be invited, if participants agree.
DG MARKT will also draw up papersoutlining the possible scope of an MoU and work on the IPR Enforcement Directive and present those to the participants as quickly as possible.
The next meeting will take place onthe 10th ofSeptember,at which meeting stakeholders would be invited todiscussthe draft Synthesis Report as well as the topics which could be discussed in relation to the IPR Enforcement Directive and the scope of a possible MoU.
Distribution:all participants,
Cabinet Barnier, MARKT/D3, representatives from other Commission DGs
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