Google and Facebook must pay content creators under newly agreed EU Copyright Directive

Online platforms must also install filters to prevent users from uploading copyrighted materials

The European Union has struck a deal on a new copyright direction, which will mandate major online platforms like Google and Facebook to share revenue with artists and content creators.

This debate on copyright rules was kicked off two years ago when the European Commission decided that the copyright rules in Europe need to be refreshed to ensure that artists, broadcasters and publishers are remunerated fairly. The last set of copyright rules in the EU was ratified about 18 years ago.

Under the new EU Copyright Directive, major online platforms will sign licensing agreements with copyright holders, such as authors, music producers, journalists and news publishers to use their work online. These platforms will also be required to install filters to prevent users from uploading copyrighted materials.

If musicians or artists refuse to sign licensing agreements and don't waive their rights, internet companies will be required to remove their work from their online platforms. This means that Google won't be able to show large fragments of publishers' news articles under headlines in its Google News service.

When asked about Google's view on EU copyright agreement, the company's spokesman Damien Roemer said that next steps will be determined after examining the final text of the EU directive.

Google has warned that it may stop its Google News service in Europe in response, specifically if publishers aren't allowed to waive their rights under the Copyright Directive. The search giant has already deactivated Google News in Spain following similar demands - with Spanish publishers reporting a fall in traffic as a result.

Online platforms, or services with less than €10 million in revenue or which have existed for less than three years, won't be required to install upload filters. Those with fewer than five million monthly users will also be exempted from the upload filter requirement.

"Requiring platforms to use upload filters would not just lead to more frequent blocking of legal uploads, it would also make life difficult for smaller platforms that cannot afford filtering software," said Pirate Party MEP Julia Reda, who has opposed the Copyright Directive.

Reda added that algorithms in upload filters would be expensive to maintain, as well as error-prone, and won't be able to differentiate between copyright infringements and perfectly legal parodies. "This law will fundamentally change the internet as we know it," she said.

Tech lobby group CCIA Europe, which represents Google and Facebook, said that the new law will "harm online innovation, scale ups and restrict online freedoms in Europe".

Axel Voss, the lead negotiator for the European Parliament said: "The agreement is not everything the Parliament wanted to achieve, nor is it everything the Council and the Commission wanted, but I think we met the thin lines everyone can agree on."

The inter-institutional agreement still needs to be formal signed-off by the European Parliament and the EU capitals in the Council, which is usually a formality.