On Tuesday, the European parliament passed a sweeping new copyright law. It will weaken economic innovation and restrain the free flow of information and speech across the Internet.
In this action, the European Union has again explained why America, not Europe, is the home of the best new ideas, greatest companies, and most opportunities.
The new action comes in the form of Article 17 of new copyright legislation. That article holds online content providers liable for copyright infringements committed by third-party users. So, for example, if someone uploads a Jay Z music video to YouTube without the rights to do so, Jay Z can now directly sue YouTube for that action. The legislation will also hold third-party link providers, such as Google News, responsible for paying the end source to link to it.
While this might sound good on paper, it’s bad news.
For one, if YouTube is held liable for the actions of third-party actors, it will have to screen all content before it can be uploaded. That will cause significant delays to the free exchange of content online, damaging both third-party content creators (artists), and forcing YouTube to massively increase its compliance teams. That means higher costs that cannot be spent on greater innovation. Indeed, this regulation undercuts YouTube’s business model per se: rapid uploads of video-based content.
The same issue is true of Google News. Rather than linking to an article based on a Google editor’s conception of the interest that article might hold for consumers, the legislation will force Google News to move towards circulating only the content of providers that have agreed not to charge Google for sharing their content.
The natural effect here will be that less information flows more slowly across the Internet. Hardly the kind of thing you would expect a democracy to want.
Of course, the EU isn’t exactly a hero of democratic virtue. It’s a cabal of left-wing ideologues and statist conservatives. For that reason, the EU is deeply skeptical of American innovators. That’s exactly why the EU is already so determined to tax U.S. technology firms: it believes they are anathema to social good.
Ultimately, though, Europe’s stupidity is good news for America. With our predisposition towards more information flowing more quickly, and a government that is (at least currently) predisposed to lower taxes and less regulation, the U.S. is is set to attract more innovators, content creators, and associated economic and social benefits to our shores.
