Copyright and Artificial Intelligence: the divergence of the EU and UK

The EU was the first trading bloc to set out its position on AI and copyright in law in the Digital Single Market and EU AI Act. For a time it looked like the EU approach was going to heavily influence the UK. However, it appears that is not the case.  

The UK Government is waiting for stronger evidence before it will legislate on AI and copyright. Elsewhere in this series, we examined how that decision affects businesses domestically. Turning to international comparisons allows us to inspect where the UK may be seeking to place itself on the world stage.  

This article examines the EU’s position, the legislative landscape of the UK and the role of regulators while the Government waits for evidence, before turning to the possible positions the Government may take.  

The UK and the EU regimes 

The EU has constructed a deliberate and integrated copyright framework. The Digital Single Market Directive (DSM) establishes a structured Text and Data Mining (TDM) regime, with Article 4 permitting commercial TDM subject to a rights holder opt-out. A mechanism that creates both legal certainty for developers and enforceable protection for creators. The EU’s AI Act adds a further layer, imposing statutory transparency obligations on general-purpose AI providers, including requirements to publish summaries of training data used to develop their models. The two instruments work in conjunction to govern AI use and transparency, and enable enforcement action.  

As indicated, the UK has taken a different path. The Government has confirmed that it will not follow the EU model, dismissing the EU’s opt-out exception that it had previously floated as its preferred option in the public consultation. In its place, the Government has delegated responsibility to existing regulators, without creating a new AI and Copyright Regulator.  

To demonstrate this, here is some activity of the existing regulators at the time of writing: 

• The Competition and Markets Authority is consulting on transparency requirements for AI-generated search results under UK competition law. They are examining cases such as Google’s AI search integration to ensure rightsholders get a fair deal.  
• The Information Commissioner's Office oversees the use of AI from the perspective of data protection law. They publish guidance on compliance and investigate new issues and complaints introduced and exacerbated by AI.  
• Ofcom regulates online safety and is requiring online platforms, including those using AI, to identify and mitigate risks from illegal and harmful content. Recent investigations have involved AI platforms such as Grok. 

Between them, these bodies cover adjacent territory without addressing the core questions surrounding AI and copyright. Currently, the position is clearly fragmented, making the EU’s position of setting out its position appealing to businesses due to the certainty provided.  

However, the UK has an opportunity to position itself to regain ground on the EU. By reaching a decision, the UK can eliminate the uncertainty created by nesting the governance of AI and copyright with fragmented regulators. 

Possible UK positions 

One position the UK Government confirmed it may take in the March 2026 Report is to create blanket licences for AI developers, allowing rights holders to collect licence fees from AI operators using their works. This would secure value for the creative industries, and mirrors similar approaches in the music industry, with collective management organisations taking royalty payments for distribution to artists.  

Conversely, the UK Government may take a decidedly more pro-innovation approach and opt for a broad text and data mining exception and instead regulate the outputs of AI. This would be more attractive to AI companies but would be less protective of the creative industries. By regulating outputs, protections could still be provided to rights holders while maintaining an attractive market for AI businesses. We have interrogated this exception in our article on offshore AI training.  

Where does this place the UK’s innovation standing? 

Presently, the fragmented regulation in the UK leaves courts applying existing law to novel issues in the AI Industry. The UK’s delay in legislating and risk of change to existing legislation makes the EU’s decisive position attractive for businesses due to the certainty it provides.  

The challenge this presents the UK when it decides to position itself, is whether it opts for a more innovative approach.

If it does opt for a more innovative approach, such as the one set out above, it may draw businesses from the EU to the UK to perform R&D on their AI systems, as this would permit wider access to data without the opt-out regulations. However, this would cut across the consultation responses and so would be politically very difficult.  

If the Government opts for a more pro-creative industries stance, such as by making entry into the UK market subject to obtaining licences this will be well received by the creative industries, but will add a cost for AI businesses to enter the UK market. Alongside frontier models being widely reported to be operating at large financial deficits, this would create a further headwind to argue against operating in the UK market. 

With the “EU-style” opt-out option firmly off the table, sooner or later, the Government is going to need to set out its position. When they do, the proximity and size of the EU will undeniably create a winner and loser between these two opposing interests. 

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