EU lawmakers have opted not to take a tough line on an EU copyright overhaul aimed at making Google, Facebook and other tech giants share revenues with publishers, broadcasters and artists after lobbying by internet companies.
The decision is a victory for the tech companies, which have pushed back against EU efforts to secure a level playing field for the creative industries, warning of the dangers of censorship.
The proposed copyright revamp is based on a proposal by the European Commission to ensure that online platforms pay publishers, broadcasters and artists a fair share of revenue and bear liability for online infringement.
A key committee at the European Parliament subsequently added more muscle to the proposal to give more power to Europe's creative industries.
However, lawmakers on Thursday voted against opening talks with EU countries based on the committee's recommendation and parliament will now have to revise the proposal for a vote in September before starting talks with EU countries that have already adopted their own position.
Lawmaker Julia Reda from the Greens party, who has spearheaded opposition to the committee's tough approach, said it is time to go back to the drawing board.
"These plans will now get the scrutiny and the public debate such sweeping measures deserve," she said.
"But the fight is far from over. We need to make sure that, in September, parliament votes for an update to copyright rules that protects creators' interests while also safeguarding the rights of internet users."
Facebook said: "We hope that the debate going forward will focus on the original mission of protecting copyright and ensuring a vibrant marketplace for content creation."
Microsoft welcomed the lawmakers' vote, saying copyright rules should focus on innovation and research.
The debate has coalesced around two points, one of which could force Google, Microsoft and others to pay publishers for displaying news snippets.
The other is mandatory upload filtering, which would require online platforms such as YouTube, GitHub, and Instagram to install filters to prevent users from uploading copyrighted materials or seek licences to display content.
Dangers of censorship
Trade body EDiMA, whose members include Amazon EU, Apple, eBay, Facebook, Google, Microsoft and Twitter, welcomed the lawmakers' vote, citing the dangers of censorship.
Axel Voss, who headed the parliamentary committee, criticised internet groups for using false arguments. Europe's publishers EMMA, ENPA, EPC and NME, and the Society of Audiovisual Authors, were similarly scathing.
"Four European Parliament committees have scrutinised, clarified, amended and approved the EU Copyright Reform over the past two years and today those efforts to create a fairer, more sustainable digital ecosystem for the benefit of creators, distributors and consumers have been jeopardised," the publishers said in a joint statement.
Collecting society CISAC said it just wants its authors and composers to have a fair income when their work goes online.
"Today’s vote is a missed opportunity to fix one of the biggest problems in today's digital market. It leaves an unfair situation in which the value of creative works, instead of benefitting their creators, is being used to enrich global technology platforms," CISAC Director General Gadi Oron said.
Consumers group BEUC said reforms should be more consumer friendly.
"The internet must remain a place where consumers can freely share their own creations, opinions and ideas. MEPs (lawmakers) have a chance to correct a heavily unbalanced report and make copyright work for both consumers and creators," said BEUC Director General Monique Goyens.