Top digital Eurocrat issues non-denial about hyperlink non-tax

Perhaps he’s a non-Eurocrat too?

Comment European Commission vice president Andrus Ansip has denied plans to impose “a tax on hyperlinks”, even though the EU can’t tax hyperlinks, and nobody has asked for URLs to be taxed. URLs, as you might suspect, would be very hard, if not impossible, to “tax” anyway.

The great Polish writer Stanisław Lem used to disguise satires of communist bureaucracy as sci-fi novels. Sometimes I wonder if the European Commission has gone one better, and satirisied itself as performance art. This is one of those times.

It’s a story that beautifully illustrates how Brussels can go barking madly up the wrong tree, and find itself in a problem entirely of its own making. It’s also as good as any illustration of the structural and political problems besetting the union.

Bear with us, gentle reader, as we explain.

Let’s take a step back for a moment, and imagine an ideal, well-functioning European Union. (For now, park your opinion of whether you think such a thing is desirable or not to one side: this is purely a thought exercise).

A well-functioning EU would have the democratic mandate of more than 400m people to exercise power over big, important things. Things that really matter: fiscal policy; investment; defence strategy; and migration. In a well-functioning EU people would grant politicians power through voting, and policy-makers would be the answerable to the people. If they didn’t like the policy makers, they’d vote for another lot.

That’s politics as usual, just as it is in any modern democratic sovereign state.

But the EU doesn’t have most of those powers (or “competencies”, in Brussels jargon), because its member states have kept those for themselves. Neither does “politics as usual” work in the EU. It’s acutely aware of a “democratic deficit” and knows that the popular mandate for a more powerful federal EU has stalled for a decade, since French and Dutch voters rejected Valery Giscard d’Estang’s European Constitution, leaving things in a limbo.

In its place, the EU looks to “civil society” to paper over the cracks, and NGOs are a proxy for real legitimacy. The EU Commission can’t really claim to express the will of the people because the elected part of the EU can only amend policy, not make it. So the EU instead claims to listen to “the voices of civil society”. It’s so keen on the NGOs, in fact, it funds them.

What this means is that instead of listening to the electorate, the EU is often listening to itself. This short-circuits the democratic process, and it produces some odd consequences – and a non-denial of a non-tax is one of them.

As it can’t do big things, Brussels gets jolly busy with little things. Or even things that aren’t really things at all. Like the “Digital Agenda”, for example. Brussels decided it needs one and now it has three commissioners and a staff of hundreds dedicated to it. But is there really such a thing as “digital”, what kind of thing is it, and does it need an Agenda, with capitalised emphasis and all? Steam and electricity were a lot more real than “digital” though, for “digital” just means people using the internet and apps. Yet the Victorians seemed to prosper without a Commission for Steam, and the Edwardians without a Commission for Electricity, strangely enough.

They seemed to manage growth with regulation without creating the divine construct of “Steam”, something God-like with a will of its own. “Digital” is really an ontological punt that’s spawned a huge make-work bureaucracy.

This obsession with ephemera was captured by MPA president Stan McCoy last year. It’s hard to disagree with his assessment:

They may not be able to rescue migrants from the sea. They may not be able to stand up to President Putin. They may not be able to find jobs for 50 per cent of young people who are unemployed... But they can offer you a marvellous digital future!

McCoy went on to point out another consequence. Brussels bureaucrats have become a Brahmin elite, an elite that feels it has a “sense of entitlement” to intervene, and “dispense regulatory largesse.” This too is captured in the non-hyperlink non-tax story.

Not to oversimplify things too much, but the Anglo-American common law approach to copyright emphasises the trading of this virtual property. Clear rights, strong contracts law, and no sob stories. The European way is far more collectivist and bureaucratic. If there’s a problem, European rights holders are more amenable to a tax or levy, divvied up. This approach encourages lobbying and backroom deals. Every claim of unfairness by rightsholders leads to a call for a levy, it seems.

A particularly fruity response to this was made by Elisabeth Wurzel in her entertaining monograph Creatocracy (reviewed here): "Life isn’t fair – go sue unfair. There is a huge class action lawsuit waiting to be filed against unfair."

Now, the EU doesn’t have power to “tax hyperlinks”. That emotive phrase is how digital NGOs – paid for by the EU, foundations, and Silicon Valley internet companies – describe German publishers' desire for an ancillary copyright on snippets, aimed at large aggregators such as Google. Google scrapes content but doesn’t pay for it.

The NGOs' “tax” is designed to enflame rather than inform: it really isn’t very accurate. Taxes involve compulsion and penalties – prison, if you don’t pay. Even if the publishers won an ancillary right, nobody would be forced to pay, and Google would almost certainly tell them to get stuffed – because Google wears the Big Boots. And Google already told German publishers to get stuffed, and won, over Google News.

A much better way to induce large re-publishers like Google to pay for the material they scrape and re-publish lies is through voluntary association, via market incentives, not cosy backroom deals. Aggregators have to think it’s worth the value. If rightsholders simply see IP ownership as a license to lobby for a levy, rather than a tradeable bit of property, then the value of that material made be creators will never be priced, and the pot returned to the creators can’t ever grow. The incentives for owners are to lobby harder, not invest more in finding and promoting the creators of great songs, movies, or books.

Those Brussels peculiarities – the lack of legitimacy, the lack of big things to do, and the short-circuiting of politics by funding an offstage chorus of digital slacktivists – all created this surreal mess.

Dialogue between the commission and the NGOs is a dialogue of the deaf. One created the other; you could say they deserve each other. If you put political power in the hands of bureaucrats, the result is an explosion of lobbying bureaucrats. Who’d have guessed that, eh? ®


In case you thought copyright groups think as one, they don’t at all. Americans are aghast at the bureaucratic tinkering. You can't blame them.

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