McCartney and many other musicians had backed the proposals, saying it would help them earn revenue that otherwise would have gone to the dominant tech companies.
The European Union wants to shake up the way Internet companies handle media, e-books, digital music, news articles and other content posted online by better protecting the rights of the authors and creators.
EU lawmakers voted to back a report that has proved controversial and seen celebrities weigh in. Beatles member Paul McCartney recently wrote an open letter to the lawmakers to encourage them to back the new rules, while former Fugees frontman Wyclef Jean has publicly opposed it.
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