Going digital is a way forward, and the law needs to catch up
The Digital Copyright Directive is one of the steps towards implementing the Digital Single Market in the EU. The Directive has two purposes: (a) clarification of online services’ role and (b) the regulation of online services used to host user-generated content with a view to reinforcing the position of rightsholders vis-à-vis those services. It aims to strike “the right balance between the interests of all players”.
Although the Directive has a noble purpose, two of its articles have received enormous criticism due to their effect on the development environment of the online services. The Articles are:
ARTICLE 15 – PRESS PUBLICATION RIGHT
Named “link tax” by the public, under this article copyright holders receive a compensation right for the commercial use of their work by the online service providers. This right expires after two years from the publication date.
Big commercial news aggregators, such as Google, will have no problem negotiating fees with copyright holders. However, this provision might be detrimental to small publishers who will not have the bargaining power to negotiate fees and thus might not cover the material. As a consequence, the Article limits free speech and has a danger of generating fake news.
There are exemptions under the Article. A hyperlink to the published work will be exempt if the first publication was legitimate. Also, a mere use of “individual words or short extracts” will be exempt. The danger in the Article wording is that the publishers do not have guidance on what constitutes short extracts or snippets. At present, this is being interpreted as based on the size of the original publication, but we will wait to see how Member States will interpret it.
ARTICLE 17 – ONLINE CONTENT SHARING PROVIDERS
Pursuant to this Article, OCSSP performs an act of communication to the public, or an act of making available to the public, when it gives the public access to copyright-protected works or other protected subject matter uploaded by its users. So, OCSSPs are directly liable for the copyright-infringing content uploaded by users to their platforms.
Article 17 aims to provide copyrights owners with licensing, and thus revenue, when their content is being shared online. This will balance the revenue between them and big online companies, so closing down the “value gap”. Unfortunately, there is no central clearing house where all copyrights’ licenses can be obtained, so an all-encompassing licensing is a myth. A need for licensing would mean a delay, as millions of individual rightsholders will have to be contacted.
If the authorisation is not obtained, OCSSP is liable for unauthorised acts unless it:
The ambiguity around “best efforts” means it can be a way for internet platforms to avoid the liability. To check compliance, the audience, the size of the service and the resources available to providers will be considered. Therefore, the bigger the OCSSP, the stricter the scrutiny with start-ups receiving a lighter regime.
The problem is that the Article does not say how the platforms should ensure that such content is allocated and removed promptly. The current interpretation of the Article is that upload filters will have to be used, which will automatically stop the material coming in. This causes a couple of issues.
1. The public was concerned that it would result in a ban on memes, which gave the Article a name – “meme killer”. However, this is not true, as there is an exemption for “quotation, criticism, review, caricature, parody or pastiche” and memes would fall under it.
2. How will this material will be captured? The Court of Justice of the European Union has previously said that upload filters will limit OCSSPs’ “freedom to conduct business, as well as users” rights to the protection of personal data and freedom of expression and, therefore, are not required. However, the requirements do not leave platforms with any other choice than ACR filtering.
Moreover, it is argued that, thanks to this Article. Google will win in the long run. Google’s current Content ID System and the vast capital available to the company, will mean that it can develop the fingerprinting technologies and then sell them to the other companies, thus making a profit and further enhancing its monopoly.
This Article shifts the balance, but in whose favour is the question? On the one hand, internet platforms will be liable for infringement, and thus, copyright holders are more likely to receive revenue. On the other hand, big internet platforms can create monopolies and block all copyrighted content.
The likely success of the Directive will very much depend on the implementation of the Directive by the Member States (on 7 June 2021) and the interpretation of the Court of Justice of the European Union. At present, it is not clear what alternative is available to the filtering and how much copyright material used without licensing will be allowed.
If you have questions in regard to how the Directive will affect your business, Axiom Stone Solicitors’ team will be happy to help you.
For further information, please contact Alina Grigortseva, Paralegal in Axiom Stone’s Corporate Department by tel: 0203 827 6100 or email: ALG@axiomstone.co.uk.