RESOURCE(S)
INTRODUCTION
Libraries have a public interest function that is exercised in part by making their collections available for lending. In the context of physical books, limits to the exclusive rights controlled by authors and publishers with respect to the activities of libraries have been widely accepted. These limitations include interventions such as: (1) requiring deposit copies of published books to be delivered to and held by designated libraries; (2) providing public lending rights; and (3) privileging preservation copies.
In the digital environment, this settlement has been challenged. In the EU specifically, rightsholders can control each independent act of communication to the public, which extends to all forms of access to e-Books: sharing, renting, certain forms of lending, and even ‘selling’ or re-selling an e-Book (Court of Justice of the European Union (CJEU), Tom Kabinet, Case C-263/18). As a result, libraries have no independent control over ‘digital copies’ of books. While there is consensus that libraries should continue pursuing their public function, what this function entails and how it should be secured in respect of digital materials remains contested. The unstable relationship between intellectual property rights and competition law also affects potential interventions regarding the supply and licensing conditions of e-Books.
This report offers a preliminary market study of e-Lending markets in the context of public and academic libraries, based on a review of secondary data and new evidence from a sample of licensing contracts, and interviews with librarians in four European markets (Denmark, Poland, Republic of Ireland and the UK). The analysis finds that market dominance in the sense of the Article 102 Treaty on the Functioning of the European Union (TFEU) is difficult to establish, but alternative remedies under (national) provisions on abuse of economic dependence or under the new EU digital market type provisions (platform-to-business P2B regulation; Digital Markets Act) should be considered.
While there is potential for intervention in narrowly defined markets (such as academic core textbooks), traditional competition law interventions may not be a natural fit for the governance of ‘non-commercial access to knowledge’ in Europe. A more direct and promising path is to use copyright law interventions to address the problematic practices identified with the diagnostic tools of competition law.
Copyright law-related solutions need to address the incoherence of the judgments of the Court of Justice of the European Union (CJEU) in VOB (C-174/15) and Tom Kabinet (C-263/18). While VOB insisted that lending must be possible in the digital context on the same terms as for physical books, Tom Kabinet made access to born-digital books subject to licensing contracts (under the communication to the public right). The public function of libraries as an essential cultural and scientific knowledge facilitator can only be sustained if they are able to build collections for lending. Libraries need to empower access to books that is not dependent on the wealth of the reader or solely governed by the licensing terms of rightsholders.
KEY TAKEAWAYS
The evidence indicates significant problems in e-Lending markets with respect to market structure, licensing and pricing. Specifically, seven potential abuses of market power are identified and examined:
(1) Refusals to supply: outright and withdrawals
(2) Constructive refusals to supply: restrictive licensing conditions/delayed supply
(3) Bundling
(4) Unfair trading conditions
(5) Excessive pricing
(6) Avoidance of the spirit of other laws, e.g. the copyright exception for text and data mining
(7) Lack of transparency
As the underlying regulatory layer shaping the lending of e-Books, copyright law offers policy opportunities that can draw on this analysis of market practices under competition law. Three groups of interventions are proposed:
(1) Clarification of what constitutes a lawful source. For physical books in a library’s possession, VOB arguably permits libraries to make a digital copy for e-Lending. But libraries also need to be confident that they can acquire e-Books by interlibrary loan, donation or in secondary markets (regardless of the licensing framework asserted in Tom Kabinet).
(2) Contract regulation. The legislator could intervene in the contracts between libraries, aggregators and publishers, for example by removing the requirement for a licensed copy specifically aimed at a library if there is no licensing scheme available that ensures the public function of libraries.
(3) Limitation to exclusive rights. The legislator could require that a deposit copy of any born-digital book is made available to designated libraries specifically for lending beyond the premises. Alternatively, the legislator could provide an exception for libraries to make a digital preservation copy. Any such exception should not be overridable by the terms of licensing contracts or the presence of technical protection measures (TPMs).
WEBINAR
AUTHOR(S)

Kenny Barr

Magali Eben

Matteo Frigeri
