Earlier this week, Engine representatives participated in the U.S. Copyright Office’s Roundtable discussion on the impact and effectiveness of section 512 of the Digital Millennium Copyright Act (DMCA). The DMCA—and the safe harbor provisions of the bill included in section 512— provide a framework to grant online service providers limited liability protections for copyright infringement stemming from user-generated content.
Despite the overwhelming evidence that the DMCA has been a boon to both innovators and content creators, the Copyright Office has been studying the effectiveness of section 512 since 2015. The most recent roundtable examined recent case law developments with section 512 and the developing international framework.
Section 512 protections allow startups to create new ways for users to share content by lowering the risk that a company will face devastating litigation over allegations of infringement. Through a notice-and-takedown provision, platforms can expeditiously remove any infringing content without being held liable for it appearing on their site.
Addressing domestic developments, Kate Tummarello, policy manager at Engine, noted during the roundtable that startups are thriving because of laws such as DMCA. She went on to argue that section 512 could be updated to address the fact that bad actors can still exploit the law by sending false and time consuming notices to small businesses ill-equipped to deal with an influx of takedown requests.
Domestic developments have largely gone in the right direction, while recent global moves to address copyright infringement would place a greater oversight burden on startups. Most troubling, the European Parliament last month voted to adopt a Copyright Directive that will force platforms to use expensive content moderation tools to police user-uploaded content. This directive is likely to curtail startup expansion across the European Union by creating unreasonable obligations for any platform that hosts user generated content.
Rachel Wolbers, policy director at Engine, noted during the roundtable that the cost of creating different platforms to comply with different countries’ laws wasn’t feasible. The Internet allows entrepreneurs to scale quickly by reaching a global audience, fragmentation of copyright laws will force startups to abandon global aspirations for more localized markets.
As the Copyright Office continues its study of section 512, Wolbers said it’s important to remember that so-called carve-outs for small businesses--like those included in the EU Copyright Directive--can hinder growth and “create perverse incentives to stay under the threshold.”
Any changes to existing section 512 protections should be closely examined to see how they would impact the startup ecosystem. Closing up current exploitative loopholes within DMCA will better protect small businesses and intellectual property. Heavy-handed regulations that require online platforms to use expensive content moderation tools will destroy competition and only further anticompetitive practices.