(Liebenson Law) “A victory for Brexit would be economically, politically, socially and culturally disastrous—for all of us,” said Martin Mills and David Joseph, the respective heads of Beggars Banquet and Universal Music UK.

The UK vote to exit the EU may have profound implications for sovereignty, immigration and the economy, and it also poses challenges for international entertainment law.

Once the UK negotiates its exit from the EU, the UK will rely on its own law rather than European law. This European law has developed substantially over the last decade for instance to regulate the licensing of musical compositions by the various European collective rights organizations to digital music services such as Spotify, Apple Music and Google Play.

When the UK and its important music rights holders exit the EU, they will need to rely on UK law rather than European law as the underlying basis of their rights and transactions.  Copyright remains territorial in scope, and European directives are implemented through national legislation.  So the current UK law includes provisions consistent with the European directives.  This will tend to minimize immediate disruptions, but discrepancies certainly can arise as new European legislation and court rulings develop since the UK no longer will be bound to follow them.

Two particular areas of emerging European law bear watching—

Single Digital Market–The European Commission has been pursuing its Single Digital Market strategy which reduces territorial exclusivity and requires portability of digital content throughout Europe.  This is not popular among rights holders (especially in the television and motion picture industries) or digital services.  The UK now may be free to exclude itself from this initiative, chart its own course and preserve the principle of territorial exclusivity in its market; and

The Value Gap—The European Commission has been gaining traction in its copyright review of the safe harbor for ad-supported digital services and the “value gap” that it causes. Reforming this has been a key goal for artists and songwriters seeking to address the depressed revenues that such services generate.  This effort has been significantly supported by industry leaders from the UK who have been very influential in this debate.  But when the UK exits, they no longer will be entitled to an official voice in the review of this matter in Brussels.  The European Commission not only tends to be more supportive of rights holders than the UK government, but it also has demonstrated a more cautious approach to the large technology companies.  The exit of the UK and its entertainment industry leaders from this battle in Brussels will reduce the size and clout of the forces pursuing this against huge companies like Google.

-Jeff Liebenson