European Union
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A coalition of artist and label groups is calling on legislators to urgently address a 2020 court ruling that risks seeing European musicians lose out on millions of euros in royalties each year to U.S. acts.Â
For decades, American musicians have been denied royalties for the use of their music on broadcast radio or when itâs played in cafes, shops and bars in many overseas countries due to the lack of equivalent terrestrial radio performance and public performance rights in the United States. This practice is based on a principle known as material reciprocity, which means that broadcast and performance revenues are only paid out to countries that apply the same rights. Â Â
The longstanding practice of reciprocal treatment was, however, suspended in the European Union (EU) by a 2020 ruling from the European Court of Justice (ECJ). In that decision, the ECJ decreed that all recording artists are entitled to an equal share of the royalties generated when their music is played on radio or in public premises in the EU, regardless of their nationality â or the absence of radio and performance rights in an artistâs home country.Â
Brussels-based independent labels trade body IMPALA says the ECJ ruling will result in European artists and labels losing out on around 125 million euros ($137 million) in royalty income each year, with the equivalent sum instead going to U.S. musicians. Previously, these broadcast and performance royalties were mostly divided up between local labels according to their market share.
European countries that currently withhold public performance and broadcast royalty payments to U.S. artists and labels include the United Kingdom, France, Belgium, Denmark and Ireland. (Outside of Europe, three countries âJapan, Argentina and Australia â also deny royalties to U.S. musicians because of a lack of reciprocal rights).Â
In 2019, prior to the court ruling, SoundExchange, which issues licenses to online and satellite radio services, estimated that recording artists and rights holders in the United States lost out on an estimated $350 million in royalty payments due to what it called the âunfair treatment of music creators.âÂ
So far, the Netherlands is the only EU country to change its legislation in line with the ECJ ruling, which has become widely known as the âRAAPâ case in reference to Irish collection society Recorded Artists Actors Performers (RAAP), which initiated the reforms by taking legal action against Phonographic Performance Ireland (PPI) in 2020. In that case, RAAP challenged PPI in the Irish High Court after it reduced royalty payments to performers from a 50-50 split with labels to around 20%. The case was then referred up to the ECJ, which made the now-controversial ruling in September of that year.
U.S. repertoire represents around 40% of all public performance and broadcast income collected annually in the Netherlands, according to Dutch collecting society SENA. Until recently, this income was neither collected nor distributed. Since the change in practice, SENA has increased its tariffs on public performance royalties from 12.5% to 26%.
Will Maas, chair of the Netherlandsâ musiciansâ union, said in a statement that the rise in rates is not enough to make up for the additional U.S. repertoire now being collected, resulting in a âclear and substantial dropâ in revenue going to Dutch and European performers. âThis is what awaits other countries if nothing is done to address this,â he added.Â
In response, IMPALA executive chair Helen Smith wants the European courts to reverse its 2020 ruling and restore the principle of material reciprocity.Â
âIt is the EUâs responsibility to prevent European artists and producers losing millions every year to the USA, which has chosen not to protect these rights,â said Smith in a statement. She added that the lack of terrestrial radio performance rights and public performance rights in the United States costs the world music economy âhundreds of millions, if not billions a year.âÂ
IMPALA also supports a flexible solution that would enable EU countries to pay U.S. artists if they already did so before the ECJ judgment.
Other music groups and CMOs backing IMPALAâs call for action include Adami in France, the Swedish Musiciansâ Union, Belgiumâs PlayRight and the German Federation of Musicians. They argue that reciprocal treatment forces countries to raise their own levels of protection for musicians by not allowing nations to benefit from other countriesâ rules unless they follow the same standards.
Not everyone in the music business is against the ECJ ruling and the push for so-called national treatment â whereby foreign recording artists and labels receive the same types of royalties as the nationals of a given country â to be standardized across the global music business. Executives who back national treatment say that any fall in label income would likely be offset by the increased set of rights and royalty collections elsewhere in Europe resulting from the ECJ decision.
That, however, is not a view shared by IMPALA or its members.Â
âHundreds of thousands of artists count on the EU to do the right thing,â said Dutch musician Matthijs van Duijvenbode in a statement, âand to do it fast.â    Â
LONDON â When the European Union announced plans to regulate artificial intelligence in 2021, legislators started focusing on âhigh riskâ systems that could threaten human rights, such as biometric surveillance and predictive policing. Amid increasing concern among artists and rights holders about the potential impact of AI on the creative sector, however, EU legislators are also now looking at the intersection of this new technology and copyright.
The EUâs Artificial Intelligence Act, which is now being negotiated among politicians in different branches of government, is the first comprehensive legislation in the world to regulate AI. In addition to banning âintrusive and discriminatory usesâ of the technology, the current version of the legislation addresses generative AI, mandating that companies disclose content that is created by AI to differentiate it from works authored by humans. Other provisions in the law would require companies that use generative AI to provide details of copyrighted works, including music, on which they trained their systems. (The AI Act is a regulation, so it would pass directly into law in all 27 member states.)
Music executives began paying closer attention to the legislation after the November launch of ChatGPT. In April, around the time that âHeart on My Sleeve,â a track that featured AI-powered imitations of vocals by Drake and The Weeknd, drove home the issue posed by AI, industry lobbyists convinced lawmakers to add the transparency provisions.
So far, big technology companies, including Alphabet, Meta and Microsoft, have publicly stated that they, too, support AI regulation, at least in the abstract. Behind the scenes, however, multiple music executives tell Billboard that technology lobbyists are trying to weaken these transparency provisions by arguing that such obligations could put European AI developers at a competitive disadvantage.
âThey want codes of conductâ â as opposed to laws â âand very low forms of regulation,â says John Phelan, director general of international music publishing trade association ICMP.
Another argument is that summarizing training data âwould basically come down to providing a summary of half, or even the entire, internet,â says Boniface de Champris, Brussels-based policy manager at the Computer and Communications Industry Association Europe, which counts Alphabet, Apple, Amazon and Meta among its members. âEuropeâs existing copyright rules already cover AI applications sufficiently.â
In May, Sam Altman, CEO of ChatGPT developer OpenAI, emerged as the highest-profile critic of the EUâs proposals, accusing it of âoverregulatingâ the nascent business. He even said that his company, which is backed by Microsoft, might consider leaving Europe if it could not comply with the legislation, although he walked back this statement a few days later. OpenAI and other companies lobbied â successfully â to have an early draft of the legislation changed so that âgeneral-purpose AI systemsâ like ChatGPT would no longer be considered high risk and thus subject to stricter rules, according to documents Time magazine obtained from the European Commission. (OpenAI didnât respond to Billboardâs requests for comment.)
The lobbying over AI echoes some of the other political conflicts between media and technology companies â especially the one over the EU Copyright Directive, which passed in 2019. While that âwas framed as YouTube versus the music industry, the narrative has now switched to AI,â says Sophie Goossens, a partner at global law firm Reed Smith. âBut the argument from rights holders is much the same: They want to stop tech companies from making a living on the backs of their content.â
Several of the provisions in the Copyright Directive deal with AI, including an exception in the law for text- and data-mining of copyrighted content, such as music, in certain cases. Another exception allows scientific and research institutions to engage in text- and data-mining on works to which they have lawful access.
So far, the debate around generative AI in the United States has focused on whether performers can use state laws on right of publicity to protect their distinctive voices and images â the so-called âoutput sideâ of generative AI. In contrast, both the Copyright Directive and the AI Act address the âinput side,â meaning ways that rights holders can either stop AI systems from using their content for training purposes or limit which ones can in order to license that right.
Another source of tension created by the Copyright Directive is the potential for blurred boundaries between research institutions and commercial businesses. Microsoft, for example, refers to its Muzic venture as âa research project on AI music,â while Google regularly partners with independent research, academic and scientific bodies on technology developments, including AI. To close potential loopholes, Phelan wants lawmakers to strengthen the billâs transparency provisions, requiring specific details of all music accessed for training, instead of the âsummaryâ thatâs currently called for. IFPI, the global recorded-music trade organization, regards the transparency provisions as âa meaningful step in the right direction,â according to Lodovico Benvenuti, managing director of its European office, and he says he hopes lawmakers wonât water that down.
The effects of the AI Act will be felt far outside Europe, partly because they will apply to any company that does business in the 27-country bloc and partly because it will be the first comprehensive set of rules on the use of the technology. In the United States, the Biden administration has met with technology executives to discuss AI but has yet to lay out a legislation strategy. On June 22, Senate Majority Leader Chuck Schumer, D-N.Y., said that he was working on âexceedingly ambitiousâ bipartisan legislation on the topic, but political divides in the United States as the next presidential election approaches would make passage difficult. China unveiled its own draft laws in April, although other governments may be reluctant to look at legislation there as a model.
âThe rest of the world is looking at the EU because they are leading the way in terms of how to regulate AI,â says Goossens. âThis will be a benchmark.â
LONDON â Amid increasing concern among artists, songwriters, record labels and publishers over the impact of artificial intelligence (AI) on the music industry, European regulators are finalizing sweeping new laws that will help determine what AI companies can and cannot do with copyrighted music works. Â
On Wednesday (June 14), Members of the European Parliament (MEPs) voted overwhelmingly in favor of the Artificial Intelligence (AI) Act with 499 votes for, 28 against and 93 abstentions. The draft legislation, which was first proposed in April 2021 and covers a wide range of AI applications, including its use in the music industry, will now go before the European Parliament, European Commission and the European Council for review and possible amendments ahead of its planned adoption by the end of the year. Â
For music rightsholders, the European Unionâs (EU) AI Act is the worldâs first legal framework for regulating AI technology in the record business and comes as other countries, including the United States, China and the United Kingdom, explore their own paths to policing the rapidly evolving AI sector. Â
The EU proposals state that generative AI systems will be forced to disclose any content that they produce which is AI-generated â helping distinguish deep-fake content from the real thing â and provide detailed publicly available summaries of any copyright-protected music or data that they have used for training purposes.   Â
âThe AI Act will set the tone worldwide in the development and governance of artificial intelligence,â MEP and co-rapporteur Dragos Tudorache said following Wednesdayâs vote. The EU legislation would ensure that AI technology âevolves and is used in accordance with the European values of democracy, fundamental rights, and the rule of law,â he added.
The EUâs AI Act arrives as the music business is urgently trying to respond to recent advances in the technology. The issue came to a head in April with the release of âHeart on My Sleeve,â the now-infamous song uploaded to TikTok that is said to have been created using AI to imitate vocals from Drake and The Weeknd. The song was quickly pulled from streaming services following a request from Universal Music Group, which represents both artists, but not before it had racked up hundreds of thousands of streams.
A few days before âHeart on My Sleeveâ become a short-lived viral hit, UMG wrote to streaming services, including Spotify and Apple Music, asking them to stop AI companies from accessing the labelâs copyrighted songs âwithout obtaining the required consentsâ to âtrainâ their machines. The Recording Industry Association of America (RIAA) has also warned against AI companies violating copyrights by using existing music to generate new tunes.Â
If the EUâs AI Act passes in its present draft form, it will strengthen supplementary protections against the unlawful use of music in training AI systems. Existing European laws dealing with text and data-mining copyright exceptions mean that rightsholders will still technically need to opt out of those exceptions if they want to ensure their music is not used by AI companies that are either operating or accessible in the European Union.
The AI Act would not undo or change any of the copyright protections currently provided under EU law, including the Copyright Directive, which came into force in 2019 and effectively ended safe harbor provisions for digital platforms in Europe. Â
That means that if an AI company were to use copyright-protected songs for training purposes â and publicly declare the material it had used as required by the AI Act â it would still be subject to infringement claims for any AI-generated content it then tried to commercially release, including infringement of the copyright, legal, personality and data rights of artists and rightsholders.  Â
âWhat cannot, is not, and will not be tolerated anywhere is infringement of songwritersâ and composersâ rights,â said John Phelan, director general of international music publishing trade association ICMP, in a statement. The AI Act, he says, will ensure âspecial attention for intellectual property rightsâ but further improvements to the legislation âare there to be won.â
The European Union slapped Meta with a record $1.3 billion privacy fine Monday and ordered it to stop transferring users personal information across the Atlantic by October, the latest salvo in a decadelong case sparked by U.S. cybersnooping fears.
The penalty of 1.2 billion euros is the biggest since the EUâs strict data privacy regime took effect five years ago, surpassing Amazonâs 746 million euro fine in 2021 for data protection violations.
Meta, which had previously warned that services for its users in Europe could be cut off, vowed to appeal and ask courts to immediately put the decision on hold.
The company said âthere is no immediate disruption to Facebook in Europe.â The decision applies to user data like names, email and IP addresses, messages, viewing history, geolocation data and other information that Meta â and other tech giants like Google â use for targeted online ads.
âThis decision is flawed, unjustified and sets a dangerous precedent for the countless other companies transferring data between the EU and U.S.,â Nick Clegg, Metaâs president of global affairs, and chief legal officer Jennifer Newstead said in a statement.
Itâs yet another twist in a legal battle that began in 2013 when Austrian lawyer and privacy activist Max Schrems filed a complaint about Facebookâs handling of his data following former National Security Agency contractor Edward Snowdenâs revelations of electronic surveillance by U.S. security agencies. That included the disclosure that Facebook gave the agencies access to the personal data of Europeans.
The saga has highlighted the clash between Washington and Brussels over the differences between Europeâs strict view on data privacy and the comparatively lax regime in the U.S., which lacks a federal privacy law. The EU has been a global leader in reining in the power of Big Tech with a series of regulations forcing them police their platforms more strictly and protect usersâ personal information.
An agreement covering EU-U.S. data transfers known as the Privacy Shield was struck down in 2020 by the EUâs top court, which said it didnât do enough to protect residents from the U.S. governmentâs electronic prying. Mondayâs decision confirmed that another tool to govern data transfers â stock legal contracts â was also invalid.
Brussels and Washington signed a deal last year on a reworked Privacy Shield that Meta could use, but the pact is awaiting a decision from European officials on whether it adequately protects data privacy.
EU institutions have been reviewing the agreement, and the blocâs lawmakers this month called for improvements, saying the safeguards arenât strong enough.
The Irelandâs Data Protection Commission handed down the fine as Metaâs lead privacy regulator in the 27-nation bloc because the Silicon Valley tech giantâs European headquarters is based in Dublin.
The Irish watchdog said it gave Meta five months to stop sending European user data to the U.S. and six months to bring its data operations into compliance âby ceasing the unlawful processing, including storage, in the U.S.â of European usersâ personal data transferred in violation of the blocâs privacy rules.
If the new transatlantic privacy agreement takes effect before these deadlines, âour services can continue as they do today without any disruption or impact on users,â Meta said.
Schrems predicted that Meta has âno real chanceâ of getting the decision materially overturned. And a new privacy pact might not mean the end of Metaâs troubles, because thereâs a good chance it could be tossed out by the EUâs top court, he said.
âMeta plans to rely on the new deal for transfers going forward, but this is likely not a permanent fix,â Schrems said in a statement. âUnless U.S. surveillance laws gets fixed, Meta will likely have to keep EU data in the EU.â
Meta warned in its latest earnings report that without a legal basis for data transfers, it will be forced to stop offering its products and services in Europe, âwhich would materially and adversely affect our business, financial condition, and results of operations.â
The social media company might have to carry out a costly and complex revamp of its operations if itâs forced to stop shipping user data across the Atlantic. Meta has a fleet of 21 data centers, according to its website, but 17 of them are in the United States. Three others are in the European nations of Denmark, Ireland and Sweden. Another is in Singapore.
Other social media giants are facing pressure over their data practices. TikTok has tried to soothe Western fears about the Chinese-owned short video sharing appâs potential cybersecurity risks with a $1.5 billion project to store U.S. user data on Oracle servers.
The European Unionâs executive branch said Thursday that it has temporarily banned TikTok from phones used by employees as a cybersecurity measure, reflecting widening worries from Western officials over the Chinese-owned video sharing app.
In a first for the European Commission, its Corporate Management Board suspended the use of TikTok on devices issued to staff or personal devices that staff use for work.
TikTok faces intensifying scrutiny from Europe and the U.S. over security and data privacy amid worries that the hugely popular app could be used to promote pro-Beijing views or sweep up usersâ information. It comes as China and the West are locked in a wider tug of war over technology ranging from spy balloons to computer chips.
The EUâs action follows similar moves in the U.S., where more than half of the states and Congress have banned TikTok from official government devices.
âThe reason why this decision has been taken is to ⌠increase the commissionâs cybersecurity,â commission spokesperson Sonya Gospodinova said at a press briefing in Brussels. âAlso, the measure aims to protect the commission against cybersecurity threats and actions which may be exploited for cyberattacks against the corporate environment of the commission.â
Caroline Greer, TikTokâs Brussels-based public policy official, tweeted that the suspension âis misguided and based on fundamental misconceptions.â
âWe have requested a meeting to set the record straight,â she said, adding that TikTok, which has 125 million users in the 27-nation European Union, is âcontinuing to enhanceâ its approach to data security. That includes opening three European data centers and minimizing data sent outside of the continent.
Commission spokespeople declined to say whether a specific incident triggered the suspension or whatâs needed to get it lifted.
Staffers would be required to delete TikTok from devices that they use for professional business by March 15, EU representatives said, but did not provide any details on how that would be enforced for people who use personal phones for work.
In Norway, which is not a member of the 27-nation EU, the justice minister was forced to apologize this month for failing to disclose that she had installed TikTok on her government-issued phone.
TikTok also has come under pressure from the EU to comply with upcoming new digital regulations aimed at getting big online platforms to clean up toxic and illegal content along with the blocâs strict data privacy rules.
TikTokâs CEO met Tuesday with European Union officials about strict new digital regulations in the 27-nation bloc as the Chinese-owned social media app faces growing scrutiny from Western authorities over data privacy, cybersecurity and misinformation.
In meetings in Brussels, Shou Zi Chew and four officials from the EUâs executive Commission discussed concerns ranging from child safety to investigations into user data flowing to China, according to European readouts from two of the meetings and tweets from a third.
TikTok is wildly popular with young people but its Chinese ownership has raised fears that Beijing could use it to scoop up user data or push pro-China narratives or misinformation. TikTok is owned by ByteDance, a Chinese company that moved its headquarters to Singapore in 2020.
U.S. states including Kansas, Wisconsin, Louisiana and Virginia have moved to ban the video-sharing app from state-issued devices for government workers, and it also would be prohibited from most U.S. government devices under a congressional spending bill.
Fears were stoked by news reports last year that a China-based team improperly accessed data of U.S. TikTok users, including two journalists, as part of a covert surveillance program to ferret out the source of leaks to the press.
There are also concerns that the company is sending masses of user data to China, in breach of stringent European privacy rules. EU data protection watchdogs in Ireland have opened two investigations into TikTok, including one on its transfer of personal data to China.
âI count on TikTok to fully execute its commitments to go the extra mile in respecting EU law and regaining trust of European regulators,â Vera Jourova, the commissioner for values and transparency, said after her meeting with Chew. âThere cannot be any doubt that data of users in Europe are safe and not exposed to illegal access from third-country authorities.â
Caroline Greer, TikTokâs director of public policy and government relations, said on Twitter that it was a âconstructive and helpful meeting.â
âOnline safety & building trust is our number one priority,â Greer tweeted.
The company has said it takes data security âincredibly seriouslyâ and fired the ByteDance employees involved in improperly accessing user data.
Jourova said she also grilled Chew about child safety, the spread of Russian disinformation on the platform and transparency of paid political content.
Executive Vice President Margrethe Vestager, whoâs in charge of competition and antitrust matters, met with Chew to âreview how the company is preparing for complying with its obligations under the European Commissionâs regulation, namely the Digital Services Act and possibly under the Digital Markets Act.â
The Digital Services Act is aimed at cleaning up toxic content from online platforms and the Digital Markets Act is designed to rein in the power of big digital companies.
They also discussed privacy and data transfer obligations in reference to recent news reports on âaggressive data harvesting and surveillance in the U.S.,â the readout said.
Chew also met with Justice Commissioner Didier Reynders and Home Affairs Commissioner Ylva Johansson.
Reynders tweeted that he âinsisted on the importanceâ of TikTok fully complying with EU privacy rules and cooperating with the Irish watchdog.
âWe also took stock of the companyâs commitments to fight hate speech online and guarantee the protection of all consumers, including children,â he said.
Chew is scheduled to hold a video chat with Thierry Breton, the commissioner for digital policy, on Jan. 19.