DSM Directive Series #1: Do Member States have to transpose the value gap provision and does the YouTube referral matter?

A change or just a clarification?

As reported by The IPKat, earlier this week the European Parliament adopted the latest version of the new Directive on Copyright in the Digital Single Market (DSM Directive).

The IPKat will now run a series of posts discussing some of the key aspects of this new instrument which, following publication in the Official Journal of the EU, will need to be transposed by EU Member States within 2 years.

Today I begin with a provision or, rather, a recital that, at least in certain respects, makes national transpositions somewhat redundant. It relates to the 'value gap' provision in what is now Article 17 of the Directive (formerly Article 13).

Article 17(1) states:

Member States shall provide that an online content-sharing service provider performs an act of communication to the public or an act of making available to the public for the purposes of this Directive when it gives the public access to copyright-protected works or other protected subject matter uploaded by its users. [...]

In addition, Article 17(3) provides:

When an online content-sharing service provider performs an act of communication to the public or an act of making available to the public under the conditions laid down in this Directive, the limitation of liability established in Article 14(1) of Directive 2000/31/EC [that is the E-commerce Directive] shall not apply to the situations covered by this Article.

Is the idea that an online content-sharing service provider (OCSSP) communicates to the public and is ineligible for safe harbour protection a change in the law, which will require EU Member States to change their approach to platform liability and the construction of the right of communication to the public under Article 3 of the InfoSoc Directive?

This question of of no little importance, at least on two levels.

The YouTube referral

First of all, as reported by The IPKat, last September the German Federal Court of Justice made a referral to the CJEU (YouTube, C-682/18) asking, among other things, whether "the operator of an internet video platform on which videos containing content protected by copyright are made publicly accessible by users without the consent of the rightholders carry out an act of communication within the meaning of Article 3(1)" of the InfoSoc Directive, insofar as certain conditions are satisfied.

The YouTube referral was made amidst the uncertainties arisen in the aftermath of the CJEU decision in Ziggo (The Pirate Bay case; Katposts here and see also here), which held that the operators of a platform could be directly responsible for users' infringing activities.

Could the conclusion achieved in relation to The Pirate Bay be applied also to YouTube considering, as the German court did, that:

• the operator earns advertising revenue by means of the platform,
• the upload process takes place automatically and without material being seen in advance or controlled by the operator,
• in accordance with the conditions of use, the operator receives a worldwide, non-exclusive and royalty-free licence for the videos for the duration for which the videos are posted,
• in the conditions of use and during the upload process, the operator points out that copyright-infringing content may not be posted,
• the operator provides tools with which rightholders can take steps to block infringing videos,
• on the platform, the operator prepares search results in the form of rankings and content categories, and displays to registered users an overview that is oriented towards previously seen videos and that contains recommended videos which can be displayed to registered users,

if the operator is not specifically aware of the availability of copyright-infringing content or, after having become aware, expeditiously deletes that content or expeditiously disables access thereto?

The German court also asked the CJEU to say (Question 2) whether, in the event that Question 1 is answered in the affirmative (ie YouTube communicates to the public), the doing of an act of communication to the public rules out the availability of the safe harbour within Article 14 of the E-commerce Directive.

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Brexit

The second reason why the question asked is relevant relates to Brexit: if the UK leaves the EU after the DSM Directive enters into force but before the deadline for national transpositions has passed, will it have to transpose the DSM Directive into its own law?

This is a matter of discussion and, lacking precedent, might become quite contentious.

Why neither matters or matters too much

This said, the DSM Directive - at least insofar as Article 17(1) and (3) is concerned - might not require Member States to do much.

The reason is found in Recital 64 of the Directive:

It is appropriate to clarify in this Directive that online content-sharing service providers perform an act of communication to the public or of making available to the public when they give the public access to copyright-protected works or other protected subject matter uploaded by their users. Consequently, online content-sharing service providers should obtain an authorisation, including via a licensing agreement, from the relevant rightholders. This does not affect the concept of communication to the public or of making available to the public elsewhere under Union law, nor does it affect the possible application of Article 3(1) and (2) of Directive 2001/29/EC to other service providers using copyright-protected content.

So, Article 17 would not change the law as it already exists under the InfoSoc Directive and as transposed at the national level: it would merely clarify it.

This recital likely has the effect of rendering the YouTube referral irrelevant or diminish substantially its relevance. As the answer to Question 1 would be 'Yes', the other questions - which depend on a negative answer to that question - would not need to be considered. 

The additional implication of the recital is making Brexit and the issue of transposition less of a pressing matter: if Article 17(1) and (3) is a clarification of the law as it already exists, then there is no need to change one's own law: only the interpretation should change and be in accordance with what the DSM Directive 'clarifies'.

The further effect of Recital 64 is that initiatives against user-uploaded content platforms - whether by means of licensing demands and/or contentious initiatives - might be taken already now, without the need to wait for national transpositions of the DSM Directive: according to the DSM Directive, it is the law already ...