Remunerating Creativity, Freeing Knowledge: File-Sharing and Extended Collective Licenses

Abstract

P2P technologies enable dissemination of content in an efficient way, especially if compared to the traditional techiques of content transmission over the Internet (by means of server-client network protocols, such as FTP, HTTP, etc). However, such efficiency must face the limits imposed by the law. In particular, file-sharing of protected subject matter is prohibited in all those cases where a prior authorization by right holders is absent. Such authorization is almost always missing, due to the extremely high transactive costs connected with its negotiation. This situation represents a huge market failure and restricts the freedom to access knowledge as granted by art. 27 sec. 1 of the Universal Declaration of Human Rights, with consequences that have a heavy negative impact on the cultural and economic development of our society. There has been few efforts in seeking mechanisms intended to ease the meeting between supply and demand of digital content. On the contrary, much effort has, in recent years, been put into limiting such a phenomena by leverage of the dissuasive power of criminal laws, and to involve access providers (ISP) in surveillance activities. This approach is clearly in contrast with fundamental and constitutional rights, and does not represent a solution to the market failure above mentioned. International and EU Community legislation allows for exceptions to the exclusive rights of reproduction and of making available to the public on-demand, provided that right holders are remunerated. This paper seeks to address the issue of file-sharing of copyrighted works, by analysing a variety of legal mechanisms and their compliance with international and European law. Among the possible solutions that can be taken (general taxation, special purpose tax, mandatory or voluntary licenses), we suggest that a system of collective extended licenses, if properly tuned, may solve the problems connected with the current situation of P2P, benefit the affected players economically, and increase the general welfare of society through a more efficient, fair, and open dissemination of culture and knowledge.