The Untapped Opportunity in the EU’s Post-COVID Recovery Plan

The effects of the unprecedented COVID-19 pandemic will be with us for some time. Its devastating impact on the health and security of communities around the globe is one that public health and economic experts hope to alleviate through rigorous research, scientific progress, and cutting-edge technology. But stimulating and sustaining economic recovery won’t be easy. That’s why many countries have proposed plans that include targeted investments across key economic sectors – a necessary antidote to the COVID-induced shock to the global economy.

The European Union’s 27 Member States have agreed on a recovery plan, aptly named “Next Generation EU,” pledging €750 billion to help Member States navigate the ongoing crisis, while also laying the foundations for a future that is increasingly green and digital. For the first time, the Commission will issue bonds on the financial markets on behalf of the EU to finance its plan. To repay the issued bonds, the EU proposed a carbon border adjustment mechanism expected to raise €5 billion to €14 billion per year and a digital services tax expected to generate up to €1.3 billion per year.[1]

The EU can accelerate the digital revolution by fostering a competitive investment environment and by supporting market-friendly policies that create a level playing field for digital tools and services. To that end, the EU has a unique opportunity today to help finance its own recovery plan by becoming a global leader in the fight against piracy and intellectual property theft.

The magnitude and effects of counterfeiting and piracy are significant and require clear and sustained action from governments, business and consumers. A recent study undertaken by the Organization for European Cooperation and Development (OECD) and the European Union Intellectual Property Office (EUIPO) shows that international trade in counterfeit and pirated goods represents up to 2.5% of world trade, valued at as much as EUR 338 billion.[2] Within the industry, a 2017 studyin France calculated losses of $39m (€35m) for cinema theatres, $170m (€151m) for the SVoD platforms and $374m (€331m) for pay-TV operators.[3]

The unacceptable level of piracy seen today is not only a barrier to the growth of legitimate services, but it also undercuts national governments’ ability to collect taxable revenue, which might otherwise be used to provide relief to consumers and businesses in the post-COVID era. By way of example from the pre-COVID era, according to the E&Y study, France missed out $473m (€408m) in tax revenue in 2017 and $498m (€430m) in 2016. [4]

While digital pirates evadetaxes, legitimate businesses contribute taxable revenue by lawfully creating and distributing content. The cultural and creative sectors are copyright-based ecosystems that directly employ over 11 million people across the EU (accounting for 5.5% of total employment), contribute €1,000 billion to the EU (6.9% of total GDP), provide a €92 billion trade surplus to the EU, and offer a wage premium of 59% compared with non-IPR intensive industries.[5] Shutting down digital piracy would provide governments with a way to recoup lost tax revenues based on existing tax laws  than creating new burdensome tax measures.

There is also an urgent need to engage consumers to demonstrate the true, often-hidden cost of accessing “free” content and services. Governments and industry can work together to combat counterfeiting and piracy by using tools such as public awareness campaigns about the downsides of accessing pirated content, which include personal safety, cybersecurity threats, and economic damage. Youngsters and their parents must be better informed of the risks associated using pirated sites and services, particularly regarding malware and viruses.[6] For this approach to be effective there also needs to be buy-in from internet companies, including search engines, advertising entities, payment processors, domain name registrars, hosting providers and others, whose services are often misused to host and circulate pirated content.

To strengthen anti-piracy efforts and IP enforcement, European policymakers have several policy options. First, they must work to ensure that the upcoming Digital Services Act (DSA) contains provisions to prevent the distribution of illegal content; comprehensive and clear measures on “notice-and-takedown” to ensure unlawful, infringing content is not easily accessible and; a commitment to reinforce the “know your business customer” principle. The implementation of Article 17 of the EU’s Copyright Directivealso provides an opportunity to ensure a high level of protection for rightsholders and creators.

To recapture the economic opportunity lost to piracy, and to support creative industries, we need a broad-based strategy that engages policymakers, consumers, and industry. Over time, if unlawful content is allowed to exist and circulate on the internet with no efforts to force its removal, innovative and creative industries within and outside of the EU will be disincentivized from investmenting in new content and experiences. Not only could this severely restict the choices that consumers have come to expect—in movies and television series, for example—but it could also deprive entire sectors of revenues needed to support and create jobs.   

The effective enforcement of anti-piracy laws will pave the way for increased cooperation between government and industry in areas such as information sharing to identify areas of risk, support enforcement actions, and inform decision-making that positively impacts intellectual property.

In a post-COVID world, no opportunity for economic and social improvement should be left aside. These efforts will be critical to help protect and create jobs, and contribute to social progress and prosperity across Europe.


[1] “Europe’s moment: Repair and prepare for the next generation” ECEU. May 2020. Link: https://ec.europa.eu/commission/presscorner/detail/en/ip_20_940  

[2] “Trends in Trade in Counterfeit and Pirated Goods” EUIPO. July 2018 Link: https://euipo.europa.eu/ohimportal/en/web/observatory/trends-in-trade-in-counterfeit-and-pirated-goods

[3] “Measuring digital advertising revenue to infringing sites” TAG and EY. September 2017. Link: https://www.tagtoday.net/hubfs/Measuring%20digital%20advertising%20revenue%20to%20infringing%20sites.pdf?t=1507150221706

[4] “Measuring digital advertising revenue to infringing sites” TAG and EY. September 2017. Link: https://www.tagtoday.net/hubfs/Measuring%20digital%20advertising%20revenue%20to%20infringing%20sites.pdf?t=1507150221706

[5] “IPR-intensive industries and economic performance in the European Union” EPO/EUIPO. September 2019 Link: https://euipo.europa.eu/ohimportal/en/web/observatory/ip-contribution

[6] “Fishing in the Piracy Stream: How the Dark Web of Entertainment is Exposing Consumers to Harm” Digital Citizens Alliance. Link: https://www.digitalcitizensalliance.org/clientuploads/directory/Reports/DCA_Fishing_in_the_Piracy_Stream_v6.pdf

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