Fri, Jul
60 New Articles

Adjustment of the Safe Harbor Regime for Content-sharing Platform Operators in Regard to Copyright Infringing Content

Adjustment of the Safe Harbor Regime for Content-sharing Platform Operators in Regard to Copyright Infringing Content

  • Smaller Small Medium Big Bigger
  • Default Helvetica Segoe Georgia Times

Against the background of a continuous transformation of the realities surrounding us, the European Union institutions have been noted to show an effervescence in their actions meant to cover the gap between reality and the legislative framework. This gap has grown with the evolution of digital technologies. Thus, the legislative framework has proven insufficient for an adequate protection, for example, of content published or shared in any way in the online environment.

In this context, it is also noteworthy mentioning that the most significant amount of works and content protected by intellectual property rights is currently distributed through online content-sharing platforms (i.e., those platforms that offer the general public access to such content after being uploaded by the users of their services).

As such, the need for a stricter regulation of the applicable legal regime arose, in particular for shaping the role played by these platforms in communicating to the public content protected by intellectual property rights, and the liability of these platforms for protected content illegally uploaded by users, without prior authorization of the rightholders. At the same time, a reorientation of the policies imposed by the existing market operators was pursued, policies that over time have led to a Value Gap between the value of works and revenues transferred to rightholders, thus seeking to foster the development of a fair licensing market between rightholders and content sharing platforms.

A consensus and response to the legal uncertainties thus generated has been promoted at European level under Directive (EU) 2019/790 on copyright and related rights in the digital single market (hereinafter "Directive 2019/790"). Although it has already been 3 years since Directive 2019/790 was published in the Official Journal of the European Union, it has been relatively recently transposed in most Member States, so that content sharing platforms are therefore obliged, if they have not already done so, to start the procedures for implementing the requirements necessary to comply with its provisions.

New limits on the legal liability of content-sharing platforms operators (with regard to copyright infringing content)

Article 17 of Directive 2019/790 thus regulates a new legal regime applicable to a particular category of online service providers, more specifically, those providers of information society services (i) whose main (or one of the main) purposes is to store and give the public access to a large amount of copyright-protected works or other protected subject matter uploaded by its users, (ii) which they directly or indirectly organize and promote for example, by using targeted, profit-making means of promotion. These providers are designated in Directive 2019/790 as online content-sharing service providers (operators, as defined for the purpose of this material) and benefit, as detailed below, from a specific legal regime.

First of all, starting from the exclusive right of authors to authorize or prohibit any public communication of their works, the European legislator solved through Directive 2019/790 a controversy that previously existed in practice. Thus, it has been established that when content-sharing platform operators (i.e., online content-sharing service providers, hereinafter referred to as “operators”), grant the public access to protected works uploaded by their users, they are in in fact, those who perform such acts of communication to the public or making available to the public. This principle gives rise to specific obligations for the operators concerned namely that, in connection with content protected by intellectual property rights, they must obtain an authorization from the rightholders for the use of the protected content, i.e. in the form of a license agreement.

Given the clarification of this legal regime, the obligations arising from such a legal status that fall to the holders of intellectual property rights also imply that the operators will be the ones who will be directly held liable for making illegal communications.

The paradigm shift mentioned above has also led to the need for a new liability regime to be established for these specific situations. In this context, it was concluded that the (hold harmless) (the so-called safe harbor”) regime that has been enjoyed by the information society service providers for storing (hosting) the content uploaded by third parties ever since the enforcement and transposition of Directive 2000/31 by the Member States no longer meets, in the current context, the need to protect the intellectual property rights of holders of online uploaded content.

Thus, when carrying out an act of public communication or an act of making available to the public, operators are, following the implementation rules of Directive 2019/790, subject to a new specific liability regime, with the limitation of liability set forth under Article 14 of Directive 2000/31/EC being expressly excluded.

Conditions under which the legal liability of content-sharing platform operators is triggered (for copyright infringing content)

Obtaining an authorization from rightholders, as mentioned above, will in principle exclude the operators’ liability. To be exonerated from such a liability when users still upload illegal content on their platforms (i.e., for which they have not obtained authorization from rightholders), operators will have to cumulatively demonstrate that they:

  1. made their best efforts to obtain an authorization from the rightholders;
  2. made, in accordance with high industry standards of professional diligence, the best efforts to ensure the unavailability of works and other specific protected subject matter for which the rightholders have provided the service providers with the relevant and necessary information;
  3. acted expeditiously and efficiently, upon receiving a sufficiently substantiated notice from the rightholders, to disable access to, or to remove from their websites, the notified works or other subject matter, and made best efforts to prevent their future uploads according to letter b) above.

The novelty brough to the general system of exemption from liability applicable under Article 14 of Directive 2000/31 is that operators must, under the new system, not only act expeditiously upon receipt of a sufficiently substantiated notice from rightholders to disable access or remove that content which causes actual copyright infringements after they have occurred (a condition otherwise required for exemption from liability under Directive 2000/31 as well), but in addition, they will need to ensure (and be able to demonstrate) that, upon receipt of such notice (or when rightholders provide them with relevant and necessary information, before intellectual property rights are infringed,) they make their best efforts (therefore best efforts obligations) to prevent such infringements from occurring or recurring.

In other words, the main difference from the liability regime laid down in Article 14 of Directive 2000/31 is that, under Article 17 of Directive 2019/790, in order to benefit from exemption from liability, operators must be actively engaged in carrying out preventive supervision, whereas Directive 2000/31 does not require an information society provider to actively monitor the content uploaded on the platforms it operates. In practical terms, the task of supervising all content uploaded online is transferred from the holders of intellectual property rights to online content-sharing service providers.

Does the new regime violate users’ freedom of expression and freedom of information?

The new regime sparked strong reactions, first from the operators of large online content-sharing platforms, but most notably from the Republic of Poland, which challenged the provisions of Article 17 before the Court of Justice of the European Union with an action for annulment, arguing that the obligation falling on online content-sharing service providers to preventively monitor all content that users wish to publish - in fact, in most cases, through automatic content review tools (so-called “upload filters”) - is a violation of users' right to freedom of expression and information.

The Court has recently dismissed the action for annulment, publishing its judgment in Case C-401/19 on 26 April 2022.

The Court confirmed the existence of this de facto obligation for online content-sharing service providers to actively act to filter the content that users wish to upload to their platforms, provided they have received from their rightholders the necessary information or notices (in most cases involving the use of automatic recognition and filtering tools), as well as the fact that the fulfillment of this obligation does in fact restrict the exercise of the right to freedom of expression and information of users of such sharing services.

At the same time, the Court concluded that such a restriction is in fact justified, as the operators’ obligation to review the content that users wish to upload to their platforms is accompanied by sufficient and appropriate safeguards.

Therefore, while maintaining the liability regime of online content-sharing service providers as governed by Article 17 of Directive 2019/790, the Court presents in its judgment the safeguards offered by the Directive in this respect.

Thus, operators will need to manage the content to be uploaded on their platforms so as to ensure that, while ensuring compliance with the diligence obligations arising from the conditions imposed under Article 17 of Directive 2019/790 (in principle, the implementation of automatic content recognition and filtering necessary to be able to take advantage of the liability exemption regime), they guarantee to all users that their right to freedom of expression and information will not be disproportionately affected, at least due to the fact that:

  1. the measures implemented for this purpose are so designed as to sufficiently distinguish between unlawful and lawful content. Thus, the measures will not filter and disable access to lawful content (i.e., which does not represent infringements of intellectual property rights, exceptions or legal limitations from copyright being applicable, the existence of the work in the public domain, etc.). Unlike the obligation to "make best efforts" to ensure the unavailability or disable access to content that infringes intellectual property rights, this obligation to not prevent the uploading of lawful content is an obligation to achieve a specific result for platform operators - as the Advocate General also held, the 'false positive', which consists in disabling access to lawful content, is considered under Directive 2019/790 to be much more serious than 'false negative', which consists in allowing unlawful content to be uploaded.
  2. in particular, users may, in all cases, upload content generated by them in the form of quotations, criticism, reviews or use other content for the purpose of caricature, parody or pastiche. Along the same line, it is mandatory to properly inform users (through the terms and conditions of each platform) about the possibility to use protected works and other subject matter under the exceptions or limitations on copyright and related rights.
  3. the implemented measures do not lead to an overall filtering of the content to be uploaded (i.e., providers may not be imposed a general supervision obligation). In this respect, platform operators will not be able to prevent (and will not be obliged to do so by the legislation of the Member States transposing the Directive) the uploading and making available to the public of that content which would require an autonomous assessment to establish its unlawfulness by reference to the information provided by the rightholders (which is, as mentioned above, a necessary condition for the emergence of the obligation to ensure the unavailability of such content), as well as by reference to the exceptions and limitations of intellectual property rights.

An important issue raised by the Court is that the notification made by the holders of intellectual property rights in connection with a possible infringement of their rights must contain sufficient elements to allow the platform operator to establish the unlawfulness of the content without the need to carry out an in-depth legal examination. In other words and in line with the Opinion of the Advocate General in question, platform operators’ obligation to ensure unavailability and deny access to the content to be uploaded will apply in practice, in addition to those cases where the unlawful nature has been established by a court, only to that content which appears to be manifestly counterfeit. In the Advocate General's view, these would be consist in 'identical' or 'equivalent' contents, which are in principle the only cases in which an autonomous assessment of the content by platform operators would not be necessary, the rationale being that complex copyright issues, which appear, for example, in the analysis of existing exceptions and limitations in this field, cannot be left to the discretion of these operators.

In light of this restrictive interpretation of the provisions of Directive 2019/790, any failure by rightholders to provide sufficient information or any doubt about the manifestly unlawful nature of the content will benefit the platform users who wish to upload / have uploaded the content in question, with their freedom of expression and information thus prevailing.

        d. operators must also ensure a mechanism for settling complaints and establishing remedies that should be available to the users of their services in the event of disputes concerning the prevention of access to or removal of protected works or other subject matter uploaded by them.

Some conclusions

Although all the general obligations set out above must be properly met and implemented, Article 17 of Directive 2019/790 does not provide for the concrete measures to be taken by operators in those cases where the necessary authorizations have not been obtained, in order to ensure the unavailability of the content protected by intellectual property rights for which rightholders have provided the necessary information, or the avoidance of further infringements of protected content which has been the subject of notifications.

Although the Advocate General expressed concerns about the definition of practical solutions to be implemented even by the interested service providers (expressing the opinion that the task of materializing these concrete modalities would fall within the responsibility of the Member States and the Commission), the Court did not reassert these arguments in its judgment, holding that in order to observe the freedom enjoyed by these service providers to carry on their business, it may be necessary to allow them to individually determine the concrete measures they consider most appropriate, in view of the resources and capabilities available to them and the wider context in which they operate. Therefore, in principle, it is at the operators’ discretion (taking into account, where appropriate, the ways in which Directive 2019/790 is transposed by Member States) to choose their concrete measures in order to comply with the regime implemented under Article 17 of Directive 2019/790.

Last but not least, the Court pointed out to the Member States that, when transposing Article 17 of Directive 2019/790, they have the task of ensuring that the manner in which the Directive has been transposed and the subsequent interpretations of the authorities and courts, adequately and effectively reflect all the safeguards provided therein and set out above, in order to ensure the right to freedom of expression and information of content-sharing platforms users, while legislative amendments will be necessary in those cases where the transposition method chosen in practice contradicts what the Court held in its decision. Mention should be made that Member States have already adopted various viewpoints on the transposition of Directive 2019/790, starting from the adoption of the content of Article 17 as such (as, for example, the case of Romania), to outlining those measures that can be implemented to ensure the observance of the various fundamental rights at stake. According to the Court, its judgment is without prejudice to any review which may subsequently concern the provisions adapted by the Member States in transposing the Directive.

Thus, as the regulatory acts transposing the Directive enter into force in the Member States and become actually applicable, it will be interesting to monitor in practice how the operators of large content-sharing platforms will choose to manage all the above aspects and to what extent they will be able to ensure, through the measures implemented, the right balance between the right to freedom of expression and information of the users of their services and intellectual property rights, so as to avoid any liability both in relation to the users of their services and in relation to the rightholders.

By Monica Iancu, Partner, and Madalina Arcana, Associate, Bondoc si Asociatii