Earlier quoted context omitted.
The EU has passed this law because of the lobbying of the record industry, movie industry etc... There's really no need to search for some Big Brother conspiracy theory. Maybe the law can be abused that way but I doubt that's the main motivation.
The record and movie industry? No, Europe has a different industry lobbying these issues that Americans tend to be oblivious about: newspaper publishers. A lot of the regulation is lifted verbatim from laws newspaper publishers lobbied for in Germany. This is why the regulation deals with issues like citing news stories -- a direct result of newspaper publishers going after Google. The content filter however seems to…
But you're right that newspaper definitely favor the law as well which is a problem for unbiased reporting.