Brussels claims failed business model is causing online piracy

The debate over what can be legally downloaded from the internet has flared up in recent months, fuelled by proposed French legislation that would have allowed a new state agency, known by the acronym Hadopi, to shut down web access for up to a year for those downloading materially illegally.

With the original proposal thrown out by the country's top court last month, adjusted legislation was approved by the French senate on Wednesday under which the final decision on cutting off web users has been moved from the state agency to the courts.

Other EU countries including the Netherlands are also looking at bringing in similar legislation.

"In my view, growing internet piracy is a vote of no-confidence in existing business models and legal solutions. It should be a wake-up call for policy-makers," said Ms Reding on Thursday, while studiously refusing to take sides.

The Luxembourg politician, who is set to take up a record third term in the next European Commission, was speaking at an event hosted by the Brussels-based think-tank, the Lisbon Council

She said she regretted the "extremely polarised debate" on internet content and indicated that a main component of the commission's medium-term ‘digital Europe' strategy will be to create a consumer friendly legal framework for accessing digital content within the EU.

A possible component of the new framework could be a simplified system of licensing intellectual property rights for content providers that would cover the whole union, she indicated.

However the recently elected Swedish MEP, Christian Engstrom, whose Pirate Party campaigned in the European elections under a manifesto to improve access to content on the internet, says policy makers must move away from the idea of internet users as merely consumers.

"We are citizens …and we do have certain human rights according to the European convention on human rights which includes the right to information freedom," he told EUobserver.

"Blocking people's access from the internet is obviously in breach of article ten of the European convention, but still we see the EU introducing language which opens up that possibility," he added.

The Pirate Party won one seat in the European parliament in last month's elections, and will gain another if the Lisbon Treaty is ratified as the number of MEPs will swell from 736 to 751.

Internet to drive economic growth

Ms Reding also said future European growth depended on harnessing the new generation of internet-savvy youngsters.

"My specific answer to the present economic downturn [is] Europe's digital economy, where private and public investors can expect a particularly good return on investment," she said.

At present only 35 percent of EU citizens use advanced internet services such as social networking sites or the downloading of information, but the figure jumps to 73 percent for citizens aged between 16 and 24 years old.

"It is in this new generation that there is real growth potential for Europe," says Ms Reding, describing the age group as "digital natives."

The commission believes that as these individuals grow older and their purchasing power increases, greater internet use has the potential to create around one million jobs in Europe and generate €850 billion in economic activity.

The claim is supported by a recent World Bank study that estimates every 10 percent of additional broadband penetration yields 1.3 percent in economic growth.