[Guest post] At last Spain transposes the DSM Directive

Despite the deadline of 7 June 2021, most Member States are still busy transposing the DSM Directive into their own laws. This week it was the turn of Italy (more on that over the weekend) and Spain. Katfriend Miquel Pequera Poch (Universitat Oberta de Catalunya) analyzes the Spanish transposition of the directive - notably its Articles 15 and 17 - for us.

Over to Miquel:

At last Spain transposes the DSM Directive

by Miquel Pequera Poch

Kat in Valencia

Spain has finally transposed the DSM Directive (DMSD), by means of a Royal Decree-law (RD-law), which was published in the Official Gazette on the 3rd of November. The same also transposes other Directives the implementation of which was pending, including Directive (EU) 2019/789 on online transmissions of broadcasting organisations and retransmissions of television and radio programmes.

The implementation measures of the DSMD entered into force yesterday, the 4th of November. The transposition closely follows the DSMD in many respects. In this post I will briefly consider the implementation of Arts. 15 and 17 DSMD.

As to the press publishers’ neighbouring right laid down in Art. 15 DSMD, the transposition generally sticks to the Directive’s provision, but does introduce some peculiarities which are worth noting. For instance, while the DSMD establishes that the right “shall not apply in respect of the use of individual words or very short extracts of a press publication”, the Spanish transposition seems to limit the reach of this exception. On the one hand, it provides that the right will not apply to the use of individual words, or to extracts which are very short or of little significance both in quantitative and qualitative terms. On the other hand, it establishes that this exception will only apply where the concerned online use does not prejudice the investments carried out by the publishers and news agencies, and does not affect the effectivity of the new neighbouring right.

In addition, the Spanish law elaborates on the way in which authorizations of this right must be granted to information society service providers. In the first place, it establishes that the negotiations must be carried out under the principles of good faith, due diligence, transparency, and respect to free competition rules, noting that this excludes “the exercise of a dominant position” – it does not say the abuse of it. Secondly, the Spanish law provides that the authorization agreement must meet some specific requirements, namely that of respecting the editorial independence of press publishers and news agencies; the obligation of the authorised service provider to provide updated and detailed information about the main parameters determining content’s ranking and their relative importance, according to Regulation (EU) 2019/1150 on promoting fairness and transparency for business users of online intermediation services; and the prohibition of adding to that agreement other contracts or obligations not related to the exploitation of press publications.

As readers of this blog know, Spain already had a press publishers right, though in different terms. The provision establishing the old version of such right has now been deleted… but only in part. Indeed, a carve out from the old right is kept and meant to be applied to the transposed right. It establishes that the making available by information society service providers which provide location tools of individual words (if this sounds ambiguous in English it’s only because so it is in Spanish) will not be subject to authorization or remuneration, provided that it is carried out without a specific commercial purpose; it is limited to what is strictly needed to offer search results in response to search queries; and includes a link to the origin web page. This provision raises the question of how this exception must be interpreted and whether is it fully compatible with Art. 15 DSMD.

Regarding Art. 17 DSMD, probably the most relevant departure from the language of the Directive concerns the safe harbour provided for in art. 17(4) DSMD. The Spanish transposition does implement this new exemption of liability but introduces an alternative way of action against online content-sharing service providers (OCSSPs) that might seriously reduce its effect. Indeed, under the new Spanish law, even if the OCSSPs fulfil the conditions laid down in Art. 17(4) and, particularly, even though they have made best efforts to remove the unauthorized content, if that content keeps being exploited by them, giving rise to meaningful harm to right holders, the latter may bring legal actions against the OCSSPs seeking monetary relief – for instance by means of an action of unjust enrichment. This provision arguably raises the question of its compatibility with the liability exemption provided for by the DSMD. Also concerning the conditions set forth in Art. 17(4) DSMD, the Spanish transposition adds that, when it comes to live events, OCSSPs must remove or disable access to the contents during the transmission of the event. It also establishes that where users resort to the complaint and redress mechanism regarding their uploads, the complaint must be resolved in 10 days, and that the concerned works or other subject matter shall not be accessible while the complaint is not resolved.

Some other elements in the transposition of Art. 17 DSMD may also be noted. For instance, in the definition of ‘online content-sharing service provider’, the requirement of storing and giving access to a large amount of copyright protected subject matter, is somewhat changed. In the Spanish definition, the requirement consists of storing and giving access to protected content either in big numbers or with a large audience in Spain – that is, not necessarily involving a large amount of protected content. As to the need to obtain an authorization from right holders, just like in the press publisher’s right, the Spanish law requires the negotiation to be carried out under the principles of good faith, due diligence, transparency, and respect to free competition, noting that this excludes “the exercise of a dominant position”

On a different note, the RD-law introduces the exception of pastiche – not limited to digital uses – into Spanish law. It defines pastiche as the adaptation of a divulgated work, consisting of taking some characteristic elements of an artist’s work and combining them in a way that gives the impression of being an independent creation, as long as it does not imply a risk of confusion with the original work or other subject matter nor does any harm to it or to its author.

Finally, it must be noted that the legal instrument chosen to carry out the transposition was a Royal Decree-law, which can only be used in situations of urgent need and is enacted directly by the Government. The reason for urgency was the fact that the deadline for implementing the Directives into national law had already passed. A collateral effect of choosing this way of action has been that the draft was not publicly discussed or disclosed, and has only been known at the time it was published. Hence some of the surprises. While a RD-law is immediately binding once the Government adopts it – subject to the date of entry into force, in this case, regarding the DSM, the day after of the publication of the RD-law – it must be ratified by the Parliament within 30 days, otherwise it loses its validity. It is also possible, and indeed happens often times, that, after being ratified, the text is newly introduced as a draft bill, which then follows a streamlined procedure to become an ordinary Act that replaces the original RD-law. When this is the case, political groups in the Parliament may propose amendments, and the draft may end up in an Act with very different provisions.