(Adds Mozilla, lawyer, lawmaker comments, details)
By Foo Yun Chee
STRASBOURG, March 26 (Reuters) - EU lawmakers have endorsed an overhaul of the bloc's two-decade old copyright rules, which will force Google and Facebook Inc to pay publishers for use of news snippets and make them filter out protected content.
The European Parliament backed the reforms by 348 votes to 274 on Tuesday after a debate that has pitted Europe's creative industry against tech companies, internet activists and consumer groups concerned that the new rules may be too costly and block too much content.
The European Commission began reviewing the rules two years ago in a bid to protect an industry that is worth 915 billion euros ($1.03 trillion) a year, accounting for 11.65 million jobs and 6.8 percent of the EU economy.
The new rules mean that Google and other online platforms will have to sign licensing agreements with musicians, performers, authors, news publishers and journalists to use their work online.
Google's YouTube, Facebook's Instagram and other sharing platforms will also have to install filters to prevent users from uploading copyrighted materials.
Both provisions triggered fierce lobbying from both sides.
The Commission's digital chief for Europe Andrus Ansip welcomed the outcome, saying the reforms would improve the position of writers, journalists, singers, musicians and actors vis-a-vis the big platforms using their content.
"Today's vote ensures the right balance between the interests of all players – users, creators, authors, press – while putting in place proportionate obligations on online platforms," he said in a statement.
But Google said the reforms would lead to legal uncertainty and hurt Europe's creative and digital economies. The European Consumer Organisation (BEUC) echoed the criticism.
"Consumers will have to bear the consequences of this decision. Their concerns had been voiced loud and clearly but MEPs chose to ignore them," BEUC director general Monique Goyens said.
Firefox browser-maker Mozilla was scathing about the vote.
"The EU institutions have squandered the progress made by innovators and creators to imagine new content and share it with people across the world," its EU policy head Raegan MacDonald said.
"They have handed the power back to large U.S. owned record labels, film studios and big tech.
Vast swathes of online services, not just those concerning music or news, could face unintended consequences, said Raffaella De Santis at law firm Harbottle & Lewis.
"Care will need to be taken to ensure that smaller services are not disproportionately disadvantaged by measures which are in reality designed to curtail the formerly unchecked power of the tech giants," she said.
Lawmaker Julia Reda, a prominent critic of the reforms, said they threatened the free internet.
"Algorithms cannot distinguish between actual copyright infringements and the perfectly legal re-use of content for purposes such as parody," she said.
But lawmaker Axel Voss, who is in charge of the subject, rejected the criticism.
"We have agreed a new set of rules which will do exactly the opposite of killing the internet," he said.
Last month, Finland, Italy, Luxembourg, the Netherlands and Poland refused to back the reforms ($1 = 0.8854 euros) (Reporting by Foo Yun Chee; editing by Philip Blenkinsop and Kirsten Donovan)