The proposed overhaul of EU copyright law received the support of high-profile musicians and the creative industries, and condemnation from large online technology companies.
The European Parliament voted 318 to 278 against a committee proposal known as the EU Copyright Directive, in its current form, with 31 MEPs abstaining.
The law would have put a greater responsibility on individual websites to check for copyright infringements, and would have had huge implications for many contents that reply on user generated content or third-party links.
The decision comes despite artists including Sir Paul McCartney and opera signer Placido Domingo signing an open letter calling for politicians to back the change ahead of the vote.
One of the draft pieces of legislation, known as Article 13, proposed a new legal framework to govern how large online services pay songwriters and performers for the use of their work.
It suggested websites could continue to house music videos but must use technology to ensure copyrighted works are not available where a licence has not been agreed for its use.
But the web’s inventor Sir Tim Berners-Lee and others had expressed concerns about the proposed rules, which they said threatened internet freedom.
Opponents greeted the decision as a victory.
Julia Reda, a Pirate Party MEP who had campaigned against the legislation tweeted: “Great success: Your protests have worked! The European Parliament has sent the copyright law back to the drawing board.”
We did it! But now we must plan the next step: On August 26th, let’s have a #SaveYourInternet action day to send the message: We will not accept a copyright reform that includes #uploadfilters or the #linktax. Are you in? pic.twitter.com/lXXOSUFxBw
— Julia Reda (@Senficon) July 5, 2018
Geoff Taylor, chief executive of the British Phonographic Industry (BPI) and Brit Awards, said: “We respect the decision by MEPs to have a plenary discussion on the draft Copyright Directive.
“We will work with MEPs over the next weeks to explain how the proposed directive will benefit not just European creativity, but also internet users and the technology sector.”
We respect the decision by MEPs to have a plenary discussion on the draft Copyright Directive. We will work with MEPs over the next weeks to explain how the proposed Directive will benefit not just European creativity, but also internet users and the technology sector
— bpi music (@bpi_music) July 5, 2018
McCartney wrote in his own letter he believed the changes would have assured a sustainable future for the music industry by encouraging online upload platforms to pay songwriters and performers fairly for use of their work.
The European Parliament will return to the issue in September, where its position will be up for debate, amendment and another vote in the next plenary session.
Reacting to the result of Thursday’s vote Robert Ashcroft, chief executive of recording artists’ royalties collector PRS for Music, said: “It is perhaps unsurprising considering the unprecedented level of lobbying and the comprehensive campaign of misinformation which has accompanied this vote that MEPs want more time to consider the proposals.
“The vote showed that many MEPs across the various European political parties understand the importance of fixing the transfer of value and of a well-functioning market for copyright.
“We appreciate their support and hope that as we move forward to the Plenary debate in September, more MEPs will recognise the unique opportunity to secure the EU’s creative industries.”