Meanwhile, Article 13 would have allowed copyright owners to ask an online platform such as YouTube to monitor for uploads of content, such as music or photos, to prevent them from appearing on their service.
Of the 627 MEPs at the vote, 318 were against the proposal, 278 were in favor, and 31 abstained.
The directive was widely criticized online with critics saying that this would add burdens to platforms by potentially restricting their content, and urging them to pay a "link tax", by ways of a license to news outlets.
Major publishers, including the Agence France-Presse, have pushed for the news media reform - known as article 11 - seeing it as an urgently needed solution against a backdrop of free online news that has wiped-out earnings for traditional media companies.
"We are confident that the European Parliament will finally approve what is right for the future of the EU's economy, competitiveness and fundamental values against these global forces", Lassen said. With that in mind in the run-up to today's vote, Wikipedia went dark in Spain, Poland and Italy while some of its other local versions carried banners encouraging users to contact members of the European Parliament in protest. They also believed it would benefit established news institutions.
But US tech giants and internet freedom activists were against the idea, calling it a "link tax" that would stifle discourse on the Internet. Websites took a stand in the run-up to the vote, with Wikipedia actively blocking access in certain countries while others carried warnings reminiscent of that seen throughout campaigns to stop the Net Neutrality repeal. It gained the support of former Beatle Sir Paul McCartney, while Sir Tim Berners-Lee, the inventor of the web, warned it threatened internet freedom. How do you feel about Article 11 and 13 being rejected? The "massive opposition" has been heard, from the "internet blackouts" and the petition going 750,000 strong.
'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'.