Impact of Automated Filtering on Right Holders’ Profits and Availability of Works on Platform

Little research has been conducted on how automated filtering affects the key goals of copyright protection from an economic perspective, namely, to incentivise creation by increasing right holders’ profits and to promote access to works. To examine this influence, this chapter develops an economic model that focuses on the competition between right holders and copyright-infringing uploaders. Unlike previous discussions, the model shows that even filters that are not intended to block all copyright-infringing upload attempts—and are therefore less likely to block lawful upload attempts—increase right holders’ profits. It further finds that filtering leads right holders to upload fewer existing works, which is relevant for the social desirability and platforms’ costs of filtering. Moreover, it reveals that unless a certain filtering strictness is surpassed, right holders’ profits are positively correlated with the concentration of the market for supplying copyright-infringing uploads. It thereby highlights the value of combining filtering with other measures to disincentivise copyright-infringing uploading. Further results concern the impact of differentiating the filtering strictness based on the popularity of potentially copied-from works and the impact of right holders’ pre-emptive activities. They carry relevance for the design of liability regimes and the design and interpretation of empirical studies, respectively.