BREAKING: US Copyright Office finds current safe harbor system 'unbalanced' and 'out of sync with Congress' original intent'

Today, the US Copyright Office released its much-awaited Report on Section 512 of the US Copyright Act, which was enacted in 1998 as part of the Digital Millennium Copyright Act and introduced the so called 'safe harbor' system into US law. 

As readers following all things intermediaries will know, the safe harbor system of the E-Commerce Directive was the EU response to the 1998 US legislation.

In the EU the safe harbor system is currently under scrutiny and open to a potential general review in the context of the Digital Services Act discussions. 

Last year, EU legislature excluded the availability of the hosting safe harbour - in relation to copyright infringements - in Article 17 of Directive 2019/790 (the DSM Directive) for activities falling within the scope of that provision.

In the US things do not appear that 'placid' either. 

According to the press release accompanying the Report, the US safe harbor system is deemed to be unbalanced and out of sync with Congress' original intent. As such, in some areas legislative action might be required:

The U.S. Copyright Office today released its Report, Section 512 of Title 17, a multi-year study of section 512 of the U.S. Copyright Act, which is part of the Digital Millennium Copyright Act (DMCA). When it enacted section 512 in 1998, Congress designed its safe harbors to provide “strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements that take place in the online networked environment.” The Report examines whether the balance that Congress sought has been achieved, particularly in light of the enormous changes that the internet has undergone in the last twenty-plus years. The Report, the last in a series of studies requested in a prior congressional session, represents the final output of the Office on topics related to the 2013-2015 copyright review hearings held by the House Judiciary Committee.
The Copyright Office concludes that the operation of the section 512 safe harbor system today is unbalanced. In its examination of the balance established by Congress, the Office outlines five principles that guided its review, identifies its findings, and makes several recommendations for Congress to consider. The Report highlights areas where current implementation of section 512 is out of sync with Congress’ original intent, including: eligibility qualifications for the service provider safe harbors; repeat infringer policies; knowledge requirement standards; specificity within takedown notices; non-standard notice requirements; subpoenas; and injunctions. While the Office is not recommending any wholesale changes to section 512, the Report points out these and other areas where Congress may wish to consider legislation to rebuild the original balance between rightsholders and online service providers.
The Report also identifies non-statutory areas of untapped potential to increase the efficacy of section 512 and recommends additional stakeholder and government focus in the areas of education, voluntary cooperation, and the use of standard technical measures. Finally, it provides background information on several proposals submitted by Study participants on approaches that go beyond the original construct of the DMCA, but does not provide a recommendation with respect to those proposals. The Office believes additional study and consultation would be needed before moving forward with such proposals.

The Section 512 Report landing Page is here and the link to the Report is here.