The Finnish Bill on eBook lending: What’s in it for libraries? Not so much perhaps …

Earlier in the year we wrote about the Finnish proposal to compensate authors for lending of eBooks and eAudioBooks by libraries, underlining how little it offered libraries and their users.

Now the Finnish government is amending the Copyright Act, which will come into law on 1st January 2024. So it feels appropriate to see if this now offers anything more. 

In our blog we raised a number of doubts regarding the proposed way ahead. Regretfully these are still a feature of the amendment, and they seem all but guaranteed to come into force early next year. Unless anything changes, this looks like a major missed opportunity. 

Papering over the cracks

First, there is the use of taxpayer money to “solve” contractual issues between authors and publishers. Rather than recognising the deep-seated structural imbalance in power that exists between the two, and acting to support authors in contractual negotiations with publishers, the government is simply using public funds as a short-term fix. 

A particular concern relates to the rough deal authors get from publishers around eBooks. According to the Education and Culture Committee authors received in 2021, approximately € 3.3 per copy sold of a paper book, compared to an eBook which was approximately €1.2 on average. 

The proposed total Finnish library fee for eLending (€ 1,000,000 in total for 2024) serves to distract from this key question. In other words, in place of regulatory intervention to support authors, the government has taken the easy option, shaking the “magic money tree” of taxation to solve deep-seated issues that arise from private ordering and publisher licensing practices.

In addition, and ironically, the proposal is that new payments for authors for eBook library loans should sit outside of the lending right under copyright law. This allows them to dodge another aspect of the proposed amendment – the failure to guarantee in the digital world the rights that libraries enjoy in the analogue.

A Missed Opportunity

While we strongly support remuneration for authors for eLending, this shouldn’t become a Trojan Horse for a fundamental weakening of the role of libraries and the rights of their users. 

Copyright law is vitally important here because it provides libraries with the four pillars of libraries and librarianship: 

  1. the right to buy any book, 
  2. lend (to patrons directly and via inter library loan),
  3. preserve, and 
  4. make copies for defined purposes (known as exceptions or permitted acts).  

In this sense, copyright law guarantees and underpins the societal role of a library by guaranteeing its ability to carry out its key functions. It is copyright that also provides remuneration for authors – so called public lending right (PLR) payments.

However, the lack of regulation in the digital world has allowed publishers to undermine these four library pillars, taking advantage of the possibility to impose unequal terms through licences, rather than respecting the guarantees set out in law. As a result of the move to licensing, libraries (who like authors suffer from an imbalance of power vis a vis publishers) cannot count on having the right to perform any of the functions safeguarded in copyright law, and which at the end of the day make a library a library. 

What is striking with the Finnish eBook amendment is the lack of support and guarantees for libraries. While access to all books, the most fundamental of issues, is permitted by the exhaustion principle in copyright law for analogue works, the right by libraries to acquire any eBook available in the market is being entirely ignored by the Finnish government. In fact, the amendment §.38a makes it clear that eBooks for which payments are made must be “on terms agreed with the publisher or other rightholder.”

Thus, despite of public funds being used to solve private contractual problems between authors and publishers, no guarantees around access and lending of eBooks is being given to public libraries. Plain and simple this is just wrong. 

Governments should seek to support libraries by providing them with the right to acquire any eBook title and use it in line with the flexibilities in copyright law that the legislature has granted for good public welfare reasons. Without this, education, research and scientific advancement is stymied. Moreover, from a societal perspective as we saw in the pandemic equitable access to eBooks serves society. eBooks provide an important streamlined vehicle to access to knowledge – important for those who cannot travel to a physical library. Whether disabled, living in rural communities, unable to afford to buy titles yourself or just plain too busy, citizens should be guaranteed free access to digital books via a library just as they are with paper books.

A Case of Naivete? 

eBooks are of course a global phenomenon so we can look to other countries and learn much about what may or may not happen in Finland. We know that publishers will prioritise their own interests and are unlikely to do the right thing on their own.  Our own research shows that publishers routinely refuse to license eBooks to libraries outright (e.g. a big problem in UK and Irish public libraries and at Swedish universities regarding Swedish language eBooks). Moreover, through bundles they force libraries to buy titles they don’t want, while contractual secrecy abounds, licences routinely undermine copyright law and the four pillars of libraries and librarianship. Moreover, as a rule prices are many multiples of those for paper books.

It isn’t as if eBook provision from libraries in Finland is a well functioning market place either. In fact according to this 2023 research based on the Helsinki area, eBook provision in Finnish libraries is poor.* Moreover, for the significant Swedish speaking communities in Finland, this proposal lacking any right of access by libraries to eBooks does nothing to guarantee access to titles from Swedish language publishers based in either Finland or Sweden.

The result is a threat to the ability of libraries to perform their societal function, which in turn will affect education, research as well as scientific and technical development. 

Despite the Finnish government already having been cautioned for not paying sufficient attention to the constitutionally guaranteed rights to education and research, once again it is neglecting fundamental rights by failing to address the many issues that licensing of eBooks brings about. Instead it perpetuates them by ensuring that licensing continues to override the guarantees offered by copyright law.

It also means that Finland risks not complying with European law. In 2016, the Court of Justice of the European Union ruled  that lending of any eBook available on the market is already lawful under existing Directives (Vereniging Openbare Bibliothekenv Stichting Leenrecht C-2016:856 “VOB”).

Additional concerns with the law as it stands are the lack of clarity around the lack of consideration of the status of foreign authors and their rights to compensation under the proposed law, a key issue (as mentioned above) for those accessing Swedish language books. We would presume, as is the case with analogue books, that EEA authors will benefit from this scheme but we are unaware whether this has been confirmed. 

The right way forwards

The right way forward would be to solve all of these issues by combining PLR payments with a clear right for libraries to access and fulfil their key functions. This would be augmented by wider efforts to empower authors in their own relations with publishers. Whilst KR21 strongly supports authors receiving fair remuneration for eBook loans, if the Finnish government wishes to do this with public funds without supporting the ability of the public to borrow any book they want from a library, it should seek to reward authors by intervening in the unequal balance of power that exists between publishers and authors, rather than use taxpayer money to do so.

Given the imbalance of power between authors and publishers and the low payment for digital book sales that we see, it certainly seems unlikely that guaranteed payments to authors alone will apply much pressure on publishers to lend eBooks to public libraries. Certainly keeping authors happy, given the lack of publisher remuneration to authors that has fuelled the eBook debate in Finland, certainly doesn’t seem to be high up their priority list at all!

Furthermore, in the UK, as a result of PLR payments being extended to eBook loans (but as in Finland only for those titles publishers wish to license libraries), we are unaware of any positive effect on publishers’ willingness to license eBooks at all. For example, many years later still one of the biggest English language publishers (Hachette) refuses to allow library lending of their eBooks.

In conclusion, in the digital world we live in we believe the Finnish proposal is an absolute lost opportunity.  Repeating what the Advocate General of the Court of Justice of the European Union said in VOB, this proposal could have been very different and “a real opportunity to help libraries not only to survive, but also to flourish.”

However, rather than creating the right for the public to access eBooks and for libraries to lend as per the 2016  European Court of Justice VOB ruling, the Finnish government appears to be relying on no more than hope that the situation will improve. It appears the lessons from Covid when eBooks came into their own as a reliable, equitable and always accessible means of access to knowledge have not been learnt at all.

* Seppo Suominen, “Fiction eBook borrowings, Helsinki area” Haaga-Helia University of Applied Sciences

Text of the Act

38 a § Korvaus e-kirjan ja e-äänikirjan kirjastokäytöstä

Kun yleinen kirjasto tai korkeakoulukirjasto välittää kustantajan tai muun oikeudenhaltijan kanssa sovituilla ehdoilla kirjaston kokoelmaan kuuluvan e-kirjan tai e-äänikirjan yleisölle siten, että yleisöön kuuluvilla henkilöillä on mahdollisuus saada e-kirja tai e-äänikirja saataviinsa itse valitsemastaan paikasta ja itse valitsemanaan aikana käytettäväksi rajoitetuksi ajaksi, e-kirjaan tai e-äänikirjaan sisältyvän 1 §:n 1 momentissa tarkoitetun kirjallisen teoksen, sävellysteoksen, valokuvateoksen ja muun kuvataiteen teoksen tekijällä ja kirjallisen teoksen suullisella esittäjällä on oikeus saada tästä käytöstä korvaus. Tekijällä ja esittäjällä on oikeus korvaukseen sen estämättä, mitä hänen ja e-kirjan tai e-äänikirjan kustantajan tai muun oikeudenhaltijan välillä on sovittu teoksen kirjastossa tapahtuvasta käytöstä maksettavasta korvauksesta.

Korvaus maksetaan valtion talousarvioon otettavasta määrärahasta. Oikeus korvaukseen raukeaa, jollei korvausta vaadita todisteellisesti kolmen vuoden kuluessa sen kalenterivuoden päättymisestä, jona oikeus korvaukseen on syntynyt. Edellä 1 momentissa tarkoitettuun oikeuteen sovelletaan 41 §:ää. Oikeustoimi, jolla tekijä tai kirjallisen teoksen suullinen esittäjä luovuttaa oikeutensa 1 momentissa tarkoitettuun korvaukseen, on mitätön.

Edellä 1 momentissa tarkoitettu korvaus maksetaan 19 a §:ssä tarkoitetun yhteishallinnointiorganisaation välityksellä.

§ 38 a Compensation for the use of e-books and e-audiobooks in libraries 

When a public library or a university library makes an e-book or e-audiobook belonging to the library’s collection available to the public on terms agreed with the publisher or other rightholder, so that members of the public have access to the e-book or e-audiobook from a place and at a time of their choice for a limited period of time, the e-book or e-audiobook (1§1 ), the author of a literary work, a musical composition, a photographic work or any other work of visual art within the meaning of Article 1(1) and the author or performer of a literary work shall be entitled to remuneration for such use. The author and performer shall be entitled to remuneration notwithstanding any agreement between the author and the publisher or other rightholder of the e-book or e-audiobook on remuneration for the use of the work in a library. 

The compensation shall be paid from an allocation of the State budget. The right to compensation shall lapse unless a claim for compensation is evidenced within three years of the end of the calendar year in which the right to compensation arose. Article 41 shall apply to the right referred to in paragraph 1. Any legal act by which the author or performer of a written work assigns his right to the remuneration referred to in paragraph 1 shall be null and void. 

The remuneration referred to in paragraph 1 shall be paid through the collective management organisation referred to in Article 19a.