Digital Single Market

Proposal for a Directive of the European Parliament and of the Council on copyright in the Digital Single Market

November 2016

Europe is currently 28 separate national markets, and a Digital Single Market is proposed by the European Parliament as a way of allowing wider access to content across the EU countries in the fields of education, preservation of cultural heritage and text and data mining in the field of scientific research. Also addressed is the area of fair remuneration in contracts of creators.

A proposal for a legally binding EU Directive on copyright and the Digital Single Market has recently been issued covering these areas and it lays out how the EU states would be expected to achieve the Directives aims.

The proposed Directive has been broadly welcomed by creators’ organisations. One of the main areas which are positive for creators is under the section on Fair remuneration in contracts of authors (‘authors’ are the creators of works) and performers (Chapter 3 see below). AOI and other organizations are pleased there is recognition that authors and performers have issues with transparency in relation to the uses of their work (Article 14). This could be how works are used, how much revenue is generated from the works and the money due for those uses. Illustrators will be aware that this is not always made clear to them by their commissioners, so the potential requirement for regular and adequate information on the exploitation of their works will be welcome.

Also proposed is a ‘Contract adjustment mechanism’ (Article 15). which would ensure that creators could request additional payment from the user of the rights in their work, eg publishers, if the subsequent revenue is higher than expected – a ‘best seller’ clause. We would like representatives of creators to also be able to negotiate on behalf of individuals with the clients in these instances (trade associations, agents) should a creator not wish, or feel able, to challenge the existing agreement.

The proposed Directive also states that countries should ensure that disputes concerning the transparency obligation and the contract adjustment mechanisms mentioned above could be submitted to a ‘voluntary, alternative dispute resolution procedure’ (Article 16).

CHAPTER 3  Fair remuneration in contracts of authors and performers  

Article 14 Transparency obligation

Member States shall ensure that authors and performers receive on a regular basis and taking into account the specificities of each sector, timely, adequate and sufficient information on the exploitation of their works and performances from those to whom they have licensed or transferred their rights, notably as regards modes of exploitation, revenues generated and remuneration due.
The obligation in paragraph 1 shall be proportionate and effective and shall ensure an appropriate level of transparency in every sector. However, in those cases where the administrative burden resulting from the obligation would be disproportionate in view of the revenues generated by the exploitation of the work or performance, Member States may adjust the obligation in paragraph 1, provided that the obligation remains effective and ensures an appropriate level of transparency.
Member States may decide that the obligation in paragraph 1 does not apply when the contribution of the author or performer is not significant having regard to the overall work or performance.

Article 15 

Contract adjustment mechanism

Member States shall ensure that authors and performers are entitled to request additional, appropriate remuneration from the party with whom they entered into a contract for the exploitation of the rights when the remuneration originally agreed is disproportionately low compared to the subsequent relevant revenues and benefits derived from the exploitation of the works or performances.

Article 16  Dispute resolution mechanism

Member States shall provide that disputes concerning the transparency obligation under Article 14 and the contract adjustment mechanism under Article 15 may be submitted to a voluntary, alternative dispute resolution procedure.

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