Vice President Ansip: Intellectual property law has to boost creativity and attract investments

10.07.15

Intellectual property has had a special place in Andrus Ansip’s long political career. His passionate comments in Estonian parliament in February 2012 led to thousands of people protesting against ACTA in the streets of Estonia. Three years later, in May 2015 as a Vice President of the European Commission he has presented a grand plan to create a European digital single market, with intellectual property reform being one part of it.

So Ansip is again in a situation where he has to defend his proposals to enhance the system of intellectual property and at the same time secure that this is not going to affect other important interests and rights of the digital society too much. We asked Ansip how he plans to tackle this challenge and what effect will the new strategy of the Commission have on Estonia, and foremost the music industry.

Triin Tuulik, practicing lawer and international expert on intellectual property interviewed Mr. Ansip on the topic of geo-blocking, digital single market and copyright.

You have worked as a vice president of European Commission since last November. What have you achieved during that time?

Passing the Telecom act in June that agrees about abolition of roaming charges and makes net neutrality a law is a very big achievement. There were many people who didn’t think a reasonable agreement would be possible.

My area of responsibility – digital single market – is a priority of the Commission. Six months after taking office we published the strategy for creating a digital single market. The strategy lists 16 steps (from the reform of intellectual property rights to consumer protection and data security) that will be cast into concrete legislative drafts within next eightteen months. Creating the strategy has been inclusive from the beginning; we have received many proposals from member states, the European Parliament, different interest groups. All these meetings and discussions have taken a lot of time and I hope it will contribute to the implementation of the proposals. The price of the missing digital single market is very high – 415 billion Euros per year. That’s too much!

What is the new European digital single market strategy – is it enough to achieve the digital single market in Europe by 2019, the end of the mandate for the current European Commission?

In the digital world there are still too many borders between countries that are long abolished in the real world. People are used to travel and consume goods and services of different countries, however the borderless Internet has in a way brought borders back.

Let me give you examples. Only 15% of consumers buy goods online from other EU countries, only 7% of small and medium size companies sell goods or services across borders. The reason is complicated bureaucracy, high cost and risk. If a company wants to sell its goods and services in 28 countries, it has to comply with the rules in 28 countries! Our aim is to make the bureaucracy in digital environment simpler for everyone.

One goal of the strategy is to boost the international e-commerce within the EU creating more choice for people and bigger competition between companies. A digital single market should mean that everyone can buy goods and services online in Europe just as they are doing in their own country and companies can sell their goods and services EU-wide just as in their home country.

The amount of data in the digital industry grows rapidly. 95% of data saved has been saved within the last two years. Today everybody collects and processes data – cars, department stores, and search engines. That means we have to deal with the questions of data protection, data storage, data mining etc.

The strategy of digital single market also includes questions of competition, VAT differences, intellectual property rights, unjustified location based blocking, e-commerce and a lot more.

I believe if the European Parliament and the member states will approve all our initiatives, a digital single market could operate already by 2019. However it will never be complete, just like the city of Tallinn.

Leo Mirani recently wrote in the Quartz magazine that the strategy of the European digital single market is ambitious but still a typical European approach to a global challenge: facing the competition of Silicon Valley Europe’s solution is to implement more regulations. How do you reply to such sceptics?

The aim of our strategy is to create suitable conditions and equal opportunities. This certainly doesn’t mean only new regulations but rather a critical review of old regulations (like intellectual property law) – the behaviour of consumers has changed over time and we must adjust the rules to the digital age. Creating common rules for 28 member states that will replace the national rules means eventually less regulations!

It will also be easier for global companies to act on the European Union market if they don’t have to deal with 28 separate markets but rather one single market. I think exactly that is why several US companies like Google and Facebook are supporting our strategy for a digital single market.

We should not be afraid of the competition from Silicon Valley. My interest is that there is fair competition and everyone has to follow equal and clear rules. In the European Union we don’t have one set of rules for European companies and another set for American companies – everyone has to follow the same rules.

The European digital single market strategy includes 16 different actions to achieve the goals. Which ones of these will be the easiest and which the hardest for Estonia to implement?

They are all important regardless if they are easy or difficult to implement. Estonia together with other countries has presented its proposals about the priorities of the strategy. For Estonians it’s important to keep focus on innovation and trust (keywords are cyber security and privacy), on support for e-commerce, on removal of unjustified limitations (like geo-blocking), to name but a few issues.

Estonia has an image as a digital state in Europe and is a frontrunner in many areas. Let’s take e-governance, e-tenders, digital signatures and the possibility to file taxes online. Estonia is also a frontrunner in usage of mobile Internet and permanent connection. I don’t think that Estonia will have any trouble implementing these 16 initiatives. The updating of intellectual property rights and distribution of the radio frequencies for wireless broadband will certainly cause lively discussions.

Which of the 16 steps will impact the Estonian music industry the most? What kind of impact can you predict?

In addition to the development of e-commerce and support for start-ups most likely the reform of intellectual property law will be the most noticeable change for the music industry. Paying the authors a fair compensation is a priority that is a big reason for worry today.

Struggle against piracy is very important. I think that people are more and more prepared to pay for good content and quality. Let’s look at Spotify – after it entered the Australian market piracy declined by 20% within the first year.

I am glad that there are less unjustifiable regional limitations in the music industry and it uses multi-territorial licences already.

European Commission has promised to present law proposals for harmonization of intellectual property laws of the member states and for the improvement of online access to art works by the end of 2015. What will change compared to the current situation?

The current directive on intellectual property law was approved in 2001 – Youtube didn’t even exist back then. New technologies have influenced the behaviour of consumers and the market itself.

In addition, the implementation of the intellectual property laws in member states is very varied and this clearly inhibits entrepreneurship. Using materials that are protected by intellectual property law is legal in some countries for study and research purposes, but not in other countries.

My wish is, that the reform of the intellectual property law would benefit creators and consumers. A better online access to different art works will increase the cultural diversity of Europe, not vice versa.

A well-known Estonian jazz musician Oleg Pissarenko has criticized that as a rule small entrepreneurs will lose out to big international corporations and that forces Estonian musicians to seek a friendship of big companies while smaller businesses will have to shut down. How will the European digital single market strategy help to alleviate this tendency?

Our aim is to create equal opportunities for all. Big companies win most from the current fragmentation of the market. Small companies and start-ups have fewer possibilities to reach new markets and consumers.

A digital single market will help to solve this problem by implementing clear and harmonized rules. The development of new technologies should offer many possibilities to smaller businesses. 35% of Internet users mainly consume digital content – games, films, and music. The consumer behaviour changes constantly, smartphone users in Europe watch more than 4 hours video content per week.

Intellectual property law has to boost more creativity and attract more investments. It doesn’t work on a closed market.

The representative of the Pirate party in the European Parliament, Julia Reda has criticized your activities saying that “Netflix roaming” doesn’t help against the discriminating geoblocking and the reform of intellectual property law has to go beyond the current digital single market strategy towards a European single intellectual property law. Why have you decided not to follow up this idea now?

The protection of intellectual property has developed over a long time and cannot be changed over night. The digital age has changed a lot but there is still no integrated solution. I think a pragmatic and step-by-step solution is simply more realistic. The European single and totally harmonized intellectual property law can be a long-term goal but it’s not doable yet, because the market is not so integrated and there is no obvious political consensus.

Recently the decision by the European Court of Human Rights on 16.05.2015 Delfi vs. Estonia caused a lot of resonance. The court of human rights confirmed the decision by Estonian State Court that Delfi (the biggest online news portal in Estonia), as a media organization should have removed the illegal comments about Vjatcheslav Leedo in the Delfi portal on its own initiative. The owner of the portal has to monitor the content added by users, assess it’s lawfulness and remove illegal content. At the same time here is a conflict with the e-commerce directive 2000/31/EÜ that forbids a general supervision obligation – the work of law enforcement cannot be delegated to private businesses. How will the digital single market strategy solve this conflict?

Freedom of speech is one of the fundamental rights of the European Union but the citizens of the EU also have the right for protection against hate speech and incitement of violence. Current rules oblige the service providers on the internet to remove illegal content from their platforms (like terrorism, child pornography etc.) when they notice it themselves or someone points it out for them.

The digital single market strategy intends to analyse the rules – are new proposals needed to make tougher rules for removal of illegal content and what is the role of service providers? Now it’s too early to predict the results of the analysis.

Due to the widespread use of digital data carriers the income of authors has decreased immensely from the so-called blank media tax that is being collected from audiotapes and VHS tapes until now. Therefore authors’ associations in many European countries have suggested starting taxing new recording devices and carriers like mp3 players, iPods, HD DVDs etc. What is the approach of the digital single market strategy in this issue?

The technological development has changed a lot; some countries have introduced government grants to replace the blank media tax. The situation changes constantly, case law adds new decisions, so we have to consider carefully if a European Union level legislative interference is the best solution.

What impact will the implementation of the digital single market strategy have on the negotiations with the USA about a new Trans-Atlantic Trade and Investment Partnership (TTIP)? Will it speed up or slow down finding common grounds between Europe and the USA?

A digital single market will not only make life easier in European Union but offers new possibilities to other countries as well, among them USA. For them it will also make a big difference whether to deal with one market or 28 different marketplaces. Digital technology has no borders; therefore we need to cooperate with our international partners on many different topics like cyber security and common standards. In Internet administration our views are very similar to the USA. There is a strong political will on both sides of the Atlantic to ensure an open Internet. When I introduced the European digital single market strategy in Washington in May I said there is much more that connects us than what separates us. So I see only huge possibilities in the cooperation of these two unions. The digital single market doesn’t directly affect the TTIP.

Many European start-up companies first set up in Silicon Valley to launch on the USA market and only after that expand to Europe and elsewhere. Will the digital single market be enough to develop global companies in Europe? What else does European Union plan in this matter?

It’s really true that many start-up companies move to the Silicon Valley in the growth phase. Why? Because there are too many obstacles in Europe, especially the rules I mentioned earlier that mostly affect the international business. Adapting to the legislation of each new country costs a company 9000€ in average. Multiply it by the number of member states! Our strategy helps to clarify this legislative thicket and makes business quicker, simpler and cheaper. In future no European start-up company will need to move to the USA in order to grow.

Attracting finances is also a topic that we are dealing with together with our colleagues – Commissioner of Financial Services and Capital Markets Jonathan Hill and Commissioner of Internal Market Elzbieta Bienkowska. We plan to present concrete ideas during this autumn.

There are already initiatives in Europe like “Startup Europe” that focus on connecting start-up companies with the right networks. The employment comes from start-ups to a large extent – they are creating 50% of new jobs, which is the reason why it’s important to support start-up companies in my opinion.

Three years ago you had to struggle with a lot of people who believed that the anti counterfeit trade agreement ACTA will do more harm than benefit Estonia. What can be learned from the Estonian ACTA experience for implementing the European digital single market strategy?

We need to proceed more transparently and inclusively. The lack of transparency was a mistake in the case of ACTA.

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