Karel De Gucht’s Fake ACTA Debate

Last week, the Trade Commissioner De Gucht, the same who recently declared he was “not afraid of the anti-ACTA demonstrations”, went on to explain why, considering the wave of criticism on ACTA, he is now turning to the European Court of Justice to assess whether ACTA would be detrimental to fundamental rights¹See the midday press-point of the European Commission on February 22nd, 2012, http://mediakit.laquadrature.net/embed/776?size=medium.

Commissioner DeGucht speaks about a balance to find between fundamental rights: between freedom of expression, privacy, “including the right to property, in case intellectual property”²This was clearly referring to article 17 “Property” of the Charter of Fundamental Rights, the second alinea of which states: “Intellectual property is protected”. One should note that art 17.2 does not refer to persons, a clear indication that it is of a more indirect nature that other rights in the Charter., assuming that copyright would deserve the same standing that the fundamental freedoms of persons, such as the freedom of expression.

De Gucht is actually trying to cover the tracks of his responsibility for the unacceptable ACTA. He is attempting to buy time, defuse opposition, and further manipulate any public debate on the reform of copyright. He characterizes the “Europe-wide debate on ACTA” as dominated by “disinformation on social media and blogs”, as if the only-reasonable debate were one in which people agree with him. His defence of ACTA is based on 2 core arguments:

• ACTA does not change anything in Europe and will not change the way in which European citizens use websites and social media; and
• ACTA will change something for Europe as it will ensure that the jobs of Europeans will not be lost to the €200 billion of counterfeited goods (sic) flooding the markets.

Each of these two arguments is flawed. Without waiting for the EU Court of Justice to answer the question raised by the Commission, let’s keep some facts in mind…

ACTA will have a strong impact on the future of European law

Any international treaty creates long-lasting obligations for its parties. This is particularly true within the European Union and its Member States due to the reciprocal obligations that link them. But ACTA is not just like any other treaty. It is a treaty on how exclusive rights on knowledge, culture and innovation will be enforced. For many years now, there has been a wide ranging debate on the need to reform copyright and more generally all exclusive rights, so as to reap the economic, cultural and innovation benefits of digital technology, open access and collaboration. A key effect of ACTA will be to make such a reform more difficult and more costly.

This is in particular the case for ACTA’s provisions on damages, defined in the agreement’s “civil procedures” section, and thus not submitted to the (weak) requirement of commercial scale of the infringement that applies in the criminal sanctions section. By enshrining in an international treaty a definition of damages that is claimed to represent the “injury the right holder has suffered as a result of the infringement” and allowing to define damages as equal (or higher) that the retail price of a commercial copy³Art. 9. 1 states: “In determining the amount of damages for infringement of intellectual property rights, a Party’s judicial authorities shall have the authority to consider, inter alia, any legitimate measure of value the right holder submits, which may include lost profits, the value of the infringed goods or services measured by the market price, or the suggested retail price.”, ACTA redefines the meaning of truth. No matter what evidence is provided everyday that lost sales due to non-market file sharing are limited or inexistent, ACTA will enable the entertainment industry to block any proposed legislation legalising such activities. ACTA actually sells our future democratic laws to the interests of a small club of rent-seekers.

ACTA will have a direct impact on the freedom to access and impart information for all citizens

The European Commission has developed an argument according to which substantive law defining, for instance, the scope and nature of copyright, patents or trademarks would be left unchanged by ACTA, because its provisions regard only enforcement. This argument does not resist scrutiny, because the nature of exclusive rights on knowledge, culture and innovation is inseparable of how they are enforced.⁴Copyright is for instance obtained by the simple act of expression, with a presumption of titularity, submitted to a simple standard of originality, but only a judge can decide that it was infringed upon, and the freedom to do acts that would otherwise infringe on copyright is essential to legal activities such as parody, education, information, participation in culture, or quotation. In contrast, patents are obtained only through a formal examination process, subject in principle to criteria of non-obviousness, inventiveness and susceptibility of industrial application or similar notions. Infringing a product patent may be a normal business practice, at least until there has been a notification by the patent holder of an alleged infringement. Finally trademarks apply to activities in given domains covered by classes, and the assessment of whether a trademark is or not infringed upon by an activity is a complex decision.

ACTA creates a severe financial and criminal liability for intermediaries through its articles 9 and 23.4. It forces Member States to establish collaboration procedures between right holders and intermediaries in view of enforcing copyright online (art. 27.3). There is already evidence, in particular from the US and UK examples⁵Access to La Quadrature du Net’s website got blocked for several days by Orange for its mobile users in the UK, “by mistake”, in the name of “self-regulation” against pornographic content. See: http://www.openrightsgroup.org/blog/2012/orange-uk-blocking-la-quadrature-du-net, that such a combination leads to a severe and disproportionate limitation of the right to access and impart information, by encouraging Internet filtering (for access to or for upload on sites), the blacklisting of sites, users or IP addresses, and the generalization of automated repressive measures⁶Automated repressive measures include DRMs, which do not permit legal use and are nonetheless protected against circumvention (art. 27.5)..

MEP David Martin and EU Commissioner
for Trade Karel De Gucht, a few months ago.

Today’s content industry is dominated by a very small number of monopolistic or oligopolistic players, who control an extremely high share of copyright stocks, distribution markets and intermediation services. The only supposedly European player (Universal Music/EMI, which will soon control 60% of the distribution of copyright musical recordings if the planned merger is approved) has all its business decisions taken in Los Angeles, and benefits from a tax regime which allows it to export profits outside Europe and import losses inside. iTunes controls 70% of the sales of music files. Amazon has a vertically integrated operation, from publishing to sales of physical books and eBooks, and controls a similar share of digital book sales. Netflix has a similar position for film in the US, soon expanding to Europe.

Europe will not succeed in the knowledge-based economy by attempting to emulate these predominantly American established players. On the contrary, its only true prospect of developing a successful cultural economy lies in developing new models, based on fairness to individual artists, the public and added-value producers. An agreement such as ACTA will further establish a competitive advantage for the very models against which Europe will have to compete and that are becoming increasingly hostile to the general public. ACTA will lock Europe out of providing innovative and fair services, in the name of protecting European jobs, industry and contents. A treaty which was requested and promoted by a small club of rent-seeking monopolies, will prevent new cultural practices and services from flourishing in Europe and elsewhere.

Karel de Gucht wants the debate to stop while the Court of Justice studies the agreement: He will be disappointed

Because he knows that an open debate taking into consideration the arguments developed above can only lead to a rejection of ACTA by the European and national parliaments, Mr. De Gucht would like the debate to stop while the EU Court of Justice prepares its opinion. The first reactions in the EU Parliament committees show that he will be disappointed. Information may take time to reach the policy-making arenas, but once it gets there, it won’t go away.