The House of Commons Culture, Media and Sport Committee has published its report on creator remuneration. The report has a particular focus on recent policy implications of developments in relation to AI and the creative industries as well other potential gaps in the UK copyright regime, which impact on the financial position of creators in the UK.
Artificial intelligence concerns
As we reported in February 2024, the Government's working group on AI and intellectual property had failed to agree the basis for a code of practice relating to the use of copyright protected materials in the training of AI tools. This was of course not unexpected, given the wide gulf between the respective positions of the various stakeholders. However, the Committee expresses its disappointment at this outcome and calls upon the Government to ensure that creators have proper mechanisms to enforce their consent and to receive fair compensation.
The Committee had previously been highly critical of the Government's plans (later abandoned) to implement a blanket exemption for the use of copyright works AI training. Now, it reminds the Government that, when announcing its working group on the (abandoned) code of practice, the Government had stated that should a code of practice not be adopted or agreed, "legislation could be considered". Since its announcement in February, however, abandoning the code of practice and leaving it to further engagement to be led by DSIT and DCMS, there have been no further updates.
The Committee concludes that: "it is unlikely that simply conducting a further period of engagement with the sectors, with no clarity over its overall aims, will have any meaningful effect" and the outcome will be that "the status quo simply favours AI developers". It therefore calls upon the Government to provide a definitive deadline by which it will step in with legislation to break any deadlock.
Private copying
Another interesting aspect of the Committee's report concerns private copying of copyright works. There is no private copying exception under UK law (one was briefly introduced in 2014 but, following judicial review proceedings, the relevant regulations were repealed). Other jurisdictions do have a private copying exception, which incorporates remuneration for creators (the UK 2014 regime did not do so). The remuneration typically takes the form of a small levy on e.g., blank media and/or electronic devices. The report notes that private copying mechanisms have generated significant income for creators (in 2018, €286 million in Germany, €239 million in France, and €110 million in Italy).
UK creators also receive such remuneration from foreign Copyright Management Organisations (CMOs) that implement private copying schemes.
The Committee notes that introducing a statutory private copying scheme in the UK would have the following advantages:
- It would provide a new additional domestic revenue stream for creators – estimated at between £250-300 million per year by proponents; and
- It would protect payments from other countries because those may otherwise decline or be lost as a result of the current lack of reciprocity.
A group of UK CMOs has proposed a statutory mechanism called the Smart Fund, which would require technology manufacturers to pay a 'small fraction' of the value of each device they sell into a fund to pay creators (and community projects). Of course, one concern will be the impact on consumers, albeit the report cites independent analysis that there is no empirical evidence that device prices have risen in countries that have higher per device levies (with demand and price instead being impacted by other factors such as branding and reputation etc).
The report concludes that the Government should implement, within the next 12 months, a statutory private copying scheme which at least safeguards reciprocal payments from abroad.
Comments
Of course, it remains to be seen how the various issues discussed in the report could be impacted by a forthcoming election. In addition, there have been recent press reports suggesting that the Government may, at a general level, be re-considering its position in relation to its 'light touch' approach to regulation of AI.