Or why the IMCO opinion is spot on
Article 14 of the European Commission’s proposal for a Directive on Copyright in the Digital Single Market 2016 on transparency in contractual relations between authors and performers and their powerful counterparts includes a proportionality assessment in two parts: i) a proportionality assessment between the value of the revenue and the administrative burden resulting from the obligation (Art.14(2)) and ii) the ‘significance of the contribution’ to the overall work or performance (Art.14(3)). Considering that the administrative burden is very similar across the board and negligible in automated systems, it is unclear why this paragraph is necessary. But here I will focus on the second paragraph and offer a thought-experiment to explain why it is not likely to be an effective measure (or in any case one that might overcome the status quo).
Picture a full classical orchestra playing a symphony (this works in any genre but I use the classical orchestra for simplicity). Remove a violin. If you remove a violin at the back of the first or second sections, you’re unlikely to notice the difference. If you remove the first violin, the orchestra’s leader, you may find that you notice less agreement amongst the violin sections and possibly the overall orchestra’s sections too. But if it’s a very good, long-standing orchestra, and you are not completely familiar with its sound, you may again not notice a thing. Now put the violins back into the orchestra and try removing the oboe. Often it’s just one sitting in the middle, helping the orchestra with its incisive sound to stay in tune and offering reference points. However, unless the oboe has many solo parts and/or you are very familiar with the symphony, you are unlikely to notice a thing here either. The same goes for most instruments. If you remove the conductor when the orchestra is well rehearsed and/or familiar with the work, the orchestra may well just hold it together fine, and again you won’t notice a thing. This is what appears to be meant by ‘significance of a contribution’: that none of the individual 100 musicians’ contributions is significant enough to warrant transparent reporting measures for each of the musicians.
You could argue that this sounds reasonable if you think that a record company would have to report equally for all of the musicians, when most single contributions are not really that significant for the overall work. Now if you turn the reasoning above around, that is, you remove all of the musicians whose individual contributions are not that significant, you would end up with no music. The conductor’s contribution, often considered the most significant (as reflected by their often favourable contracts), would be of no significance to the listener. The effect of the proportionality assessment therefore is to limit the right to transparent reporting of virtually every musician. The most charismatic star, whose contribution to the overall work does not stand on its own, has a favourable contract and is likely in a position to negotiate transparent reporting measures anyway.
Amendments 75-76 of the IMCO opinion (2017) therefore make much sense. These i) demand of contractual counterparts that the ‘level of disproportionality’ be duly justified and ii) deleted Art.14(3) altogether. These changes make the article more effective: considering that current technological developments offer inexpensive tools to warrant transparency for all the relevant parties, transparency should form the foundation of any contractual agreement without the need for proportionality assessments.
European Commission (2016) Proposal for a Directive of the European Parliament and of the Council on copyright in the Digital Single Market. Available at: https://ec.europa.eu/digital-single-market/en/news/proposal-directive-european-parliament-and-council-copyright-digital-single-market (Accessed: 18 September 2017).
IMCO (2017) OPINION of the Committee on the Internal Market and Consumer Protection for the Committee on Legal Affairs on the proposal for a directive of the European Parliament and of the Council on copyright in the Digital Single Market (COM(2016)0593 – C8-0383/2016 – 2016/0280(COD)), Rapporteur: Catherine Stihler. Available at: http://www.europarl.europa.eu/committees/en/imco/opinions.html (Accessed: 18 September 2017).