Why should EU copyright protection be reduced to realise the innovation benefits of Generative AI?

Publishing date
08 April 2024
Bertin Martens
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Generative AI (GenAI) models have stirred considerable controversy about copyright protection for AI training inputs and model outputs. The EU AI Act requires model developers to be transparent about their use of training inputs such as text, images and music. The EU Copyright Directive allows free text and data mining of these media inputs unless copyright holders have opted-out and want license payments. The right to opt-out amounts to economically inefficient overprotection of copyright.

Free use of media content for GenAI training does not affect media sales to consumers. Opt-outs only strengthen the bargaining position of copyright holders who decide in function of their private interests. That generates windfall profits without any increase in consumer surplus or social welfare.    

The licensing of training inputs reduces the quantity of data and the quality of GenAI models, creates transaction costs and reduces competition between GenAI firms. This slows down GenAI-induced innovation in media products and production processes as well as productivity gains far beyond media industries in all service sectors that apply GenAI. Ultimately, it slows down economic growth compared to what it could be with competitive and high-quality GenAI.

Bargaining over license pricing is arbitrary as there is no objective revenue benchmark to start from. Defenders of the moral right to remuneration argue that any arbitrary remuneration is better than no remuneration. But this private moral right comes at the expense of social welfare. The on-going bargaining and court cases between media producers and GenAI developers risk entrenching this market failure in jurisprudence.  

Early regulatory intervention and elimination of opt-outs for GenAI training, or weakening them in AI Act implementation guidelines, would solve this.

There is no need for copyright on GenAI outputs either. GenAI reduces the marginal cost of machine-production of media outputs to close to zero, on par with the marginal cost of re-production. That eliminates incentives for piracy. Moreover, composite human-machine outputs benefit from a de facto extension of copyright on the human component.

Read more about how copyright protection can limit generative artificial intelligence (GenAI) innovation in Bertin Martens' latest working paper 'Economic arguments in favour of reducing copyright protection for generative AI inputs and outputs'.

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About the authors

  • Bertin Martens

    Bertin Martens is a Senior fellow at Bruegel. He has been working on digital economy issues, including e-commerce, geo-blocking, digital copyright and media, online platforms and data markets and regulation, as senior economist at the Joint Research Centre (Seville) of the European Commission, for more than a decade until April 2022.  Prior to that, he was deputy chief economist for trade policy at the European Commission, and held various other assignments in the international economic policy domain.  He is currently a non-resident research fellow at the Tilburg Law & Economics Centre (TILEC) at Tilburg University (Netherlands).  

    His current research interests focus on economic and regulatory issues in digital data markets and online platforms, the impact of digital technology on institutions in society and, more broadly, the long-term evolution of knowledge accumulation and transmission systems in human societies.  Institutions are tools to organise information flows.  When digital technologies change information costs and distribution channels, institutional and organisational borderlines will shift.  

    He holds a PhD in economics from the Free University of Brussels.

    Disclosure of external interests  

    Declaration of interests 2023

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