The Digital Copyright Directive: Landmark or missed opportunity?

2020 | roadmap

This April, the relevant EU institutions finalised the controversial Directive on Copyright in the Digital Single Market (the "Directive")1, which came into force on 7 June 2019. The draft of this legislation has been sitting on the EU's desk for several years and – unlike most other EU law – has also caught the attention of the general public. If you want to know why the Directive is likely relevant for you too, continue reading.

Officially the Directive aimed to adapt the existing allegedly obsolete EU copyright framework to better fit the digital economy. Artists, musicians, publishers, movie studios, record labels, collecting societies and other owners of copyright or related rights especially complained that most of their hard-earned profits go to those participating in the (often illegal) digital sharing of these creative works (the so-called "value gap").
To address these legitimate concerns, the European Commission came up with ancillary copyright of press publishers against news aggregators2 and with content upload filters for the operators of online peer-to-peer content-sharing platforms.3 These provisions turned out to be a couple of political hot potatoes, which caused almost unparalleled controversy. The new rules were often criticised as being flagrant examples of censorship in the digital web which knows no boundaries, no rules and no copyright. Or does it? Internet companies invested a lot of money and effort in free speech activists and internet users whose protests culminated in demonstrations in Berlin, Munich and other major European cities just before the EU Parliament vote.

Link tax
This is what the opponents nicknamed the new licence (fee) required by social media platforms, search engines and other internet-based platforms (such as Google News) for the online display of articles, books or other press publications. The right of the press publishers to demand such a fee expires two years after the publishing of the relevant publication. The publishers must share the income from these obligatory licences with the creators of the works incorporated in such publications, such as authors, photographers, illustrators, etc.
Lawyers tend to say that the devil is in the detail or, in this case, in exceptions from the above-mentioned rules. In general, the exceptions follow the case law handed down prior to the Directive.
For example, the "online use" of the press publication does not include the mere publishing of a hyperlink to such a work published online by someone else4 as long as that first publication was legitimate. In other words, the exception will not protect you if you publish links to a pirated version of the publication available online. Given the vague wording of Article 15, it remains to be seen what effect it will have on the established CJEU case law on hyperlinking, such as GS Media5 or Svensson6.
Another exception covers "individual words or very short extracts" of original published works, which internet platforms may share online free of charge. But how short is a "very short extract"? Is it one or two sentences, or perhaps a page? The rather unsatisfactory answer is: it depends. For example, on the length of the original publication. If the publication means one short three-paragraph poem, then a two-line "news snippet" could be too long. On the other hand, publishing a two-page summary of a 1,000-page book could be legitimate. We will have to adopt the wait and see approach here.
Politically, the above-mentioned wording of the Directive may be a victory for internet platforms, because it essentially copies the previous case law (particularly German). The publishers were certainly hoping and lobbying for a much narrower exception.

Preventive censorship
That is how Poland's Deputy Foreign Minister Konrad Szymanski referred to the "upload filter"-provision7, arguing that such actions are "forbidden not only in the Polish constitution but also in the EU treaties". Czech politicians were far more cautious, although some representatives of the Pirate Party called the provision a "back pass of politicians to the copyright lobby" that will impose "robotic censorship" on everybody.
All rhetoric aside, the wording of this provision is so broad that it indeed may be seen as an obligation by internet sharing platforms to use content upload filters to prevent illegal materials (protected by copyright) from being shared among individual users without the authorisation/licence of the copyright holder.
Again, there are significant exceptions or loopholes, which the targets of this obligation will seek. For example, the term "online content-sharing service providers" will likely include YouTube, Facebook or Twitter and other major online steaming platforms or popular social media platforms. On the other hand, internet service providers, online marketplaces (including major ones, such as Amazon), non-profit online encyclopaedias (e.g. Wikipedia) or personal cloud services will fall outside the above-mentioned definition.
In addition, the sharing providers will in theory need licences from every copyright owner in the world. Because this is unworkable in practice, the Members States implementing the Directive will likely include collecting societies in these schemes to represent the copyright owners. This approach can be expected in the Czech Republic as well, because collecting societies have a very efficient lobby across most parties in the Parliament.
Finally, the safe harbour8 exempts platform operators from liability for copyright infringement if they (i) made best efforts to obtain an authorisation, (ii) made best efforts to ensure the unavailability of works based on a relevant take-down notice of the rights holders, and (iii) took down the infringing content quickly and made best efforts to prevent further uploads of the same problematic content.
Also, new and small sharing platforms, i.e. those operating for less than three years, having annual turnover below EUR 10m and an average number of monthly visitors below five million, will not have to "make best efforts to ensure the unavailability of specific works … in accordance with high industry standards of professional diligence". But others will have to comply and only time and judges will distinguish the "high industry standard" filters from others.

Summary and outlook
The Directive certainly represents a shift from the currently widespread policy of "notice and take down", which was in place not only in the EU but also in the US. On the other hand, the practical impact of the "link tax" will probably not be as significant as the right holders expected several years ago.
All EU Member States must implement these new rules in their national laws by 7 June 2021. We will see how creatively they will use the discretion left by the EU legislators in the Directive. Recently, the relevant Czech regulator, i.e. the Ministry of Culture, announced the beginning of discussions with relevant stakeholders and experts. Judging from the recent experience with the implementation of the GDPR9, the Czech Republic will not be among first to implement and will not work very creatively with the given discretion. We will be following the implementation process, so stay tuned.

1(EU) 2019/790.
2Article 15 of the Directive.
3Article 17 of the Directive.
4See Article 15 (1) of the Directive.
5C-160/15.
6C-466/12.
7Article 17 of the Directive.
8Article 17 (4) of the Directive.
9General Data Protection Regulation (EU) 2016/679.

Stanislav Bednář

Attorney at Law

T: +420 225 996 500
s.bednar@schoenherr.eu

country:

czech republic

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