[Guest post] SIAE vs Meta: no more Italian music available on Facebook and Instagram?

The IPKat has received and is happy to host this guest contribution by Deborah De Angelis (Studio Legale DDA) on the highly publicized halted licensing negotiations between Italian collecting society SIAE and Meta regarding the availability of the music repertoire administered by the former on the latter’s services. Here’s what Deborah writes:

SIAE vs Meta: no more Italian music available on Facebook and Instagram?

by Deborah De Angelis

On March 16th, Meta (the American information technology company which owns Facebook, Instagram, and WhatsApp) removed the music catalogue of SIAE, the Italian copyright collecting society, from its services due to the parties’ inability to reach an agreement to renew the pre-existing licence. SIAE claims that Meta did not negotiate transparently. Furthermore, Meta proposed a flat rate fee that SIAE rejected outright.

Other Italian and foreign copyright and related rights collecting societies have also claimed that their music catalogues were taken down illegitimately and have requested Meta to restore their music on the relevant services.

On March 30th, the Italian Chamber of Deputies held an informal hearing with SIAE, Meta and Soundreef (Soundreef is an Independent Management Entity (IME) run on the Italian territory by CMO LEA further to the Italian implementation of the Barnier Directive 2014/26/EU).

The parties discussed the likely impact of the blocking of Italian music from Facebook and Instagram on labels, artists, songwriters and the music industry, particularly for independent artists, and the need to find a solution promptly. The Undersecretary of the Ministry of Culture responsible for copyright called for SIAE and Meta to convene again on April 6th to restart negotiations.

In addition, on April 5th the Italian Antitrust Authority launched an investigation onto Meta to establish whether its behaviour would amount to an abuse of economic dependence in the negotiations with SIAE. Meta might have abused the contractual imbalance by asking SIAE to accept an inadequate economic offer without providing the information to evaluate its fairness. The Authority considers that the alleged abuse of economic dependence could have a significant impact on the protection of market competition and harm consumers.

Overall, it appears that the ongoing situation in Italy could serve as a pilot to highlight the balance of reciprocal interests in the licensing negotiation between rightsholders, online content-sharing service providers (OCSSPs) and users. It could test the applicability of Art. 17 and the following clauses in Chapter III of the CDSM Directive in a national contest.

The use of copyright content by OCSSPs

The implementation and nature of Art. 17 of the Directive on copyright and related rights in the Digital Single Market (CDSM Directive) have been the subject of extensive discussion in the academic community [IPKat here, here and here]. The CDSM Directive creates a new liability regime for OCSSPs, requiring them to make the best efforts to obtain a licence to perform an act of communication or an act of making available to the public when providing access to copyright-protected works or other protected subject-matter uploaded by the users (Art. 17 (4), a). To avoid liability under this regime, without any authorization by the rightsholders, OCSSPs must adopt measures to prevent infringing material from appearing on their platforms. In such a scenario, rightsholders must provide OCSSPs with the necessary information (Art. 17 (4), b). Last but not least, OCSSPs need to act promptly upon receiving a substantiated notice from rightholders, to disable access or remove the notified works or other subject matter and make the best effort to prevent their future upload (Art. 17 (4), c). At the same time, the implementation of Article 17 must respect the various fundamental rights involved to ensure that any limitations on the right to freedom of expression are proportionate (European Court of Justice, in the Republic of Poland Vs EU Parliament and Council EU Parliament (C-401/19) [IPKat here].

it is submitted that in the SIAE/Meta case, Meta should not have disabled access to content that falls under one of the following categories:

• SIAE members opted for the limitation of SIAE intermediation for the digital rights (in this case, rightsholders could individually manage their rights or give the mandate to another copyright collecting society);
• foreign repertoires administered by SIAE due to reciprocal agreements with foreign collecting societies;
• audio content that does not qualify as musical works;
• content released by rightholders under a Creative Commons Non-Commercial licence for promotional purposes (Art. 5 (3) Barnier Directive; Art. 4 (5) D.Lgs. 35/2017);
• content in the public domain;
• content covered by an exception.

It is still unclear whether blocking content created through the collaboration among SIAE’s members and other Italian or foreign collecting societies’ members was the appropriate solution for Meta.

In all this, it should be recalled that the implementation of Article 17 in Italy resulted in the introduction of Title II-ter, Article 102 sexies to Article 102 decies, of the Copyright Law (L. 22 April 1941, n. 633, LdA). The complaint and redress mechanism (Article 102 decies, 3 LdA) requires that disputed content remains inaccessible while a complaint is pending (Art. 102-decies, 3, LdA). This provision seems to conflict with the EU Commission Guidance, which offers a non-binding interpretation of Art. 17 recommending to limit automated ex-ante blocking of content identified by rightsholders to manifestly infringing uploads and to allow uploads which are not manifestly infringing subject to an ex-post a human review when rightsholders oppose by sending a notice. [IPKat here]. It is possible that Meta's decision to remove Italian music without reaching a licensing agreement with SIAE and receiving proper information from the rightsholders was influenced by the content of this provision.

Conclusion

The SIAE/Meta case presents several interesting insights from the point of view of the interpretation of Article 17 and the following clauses in Chapter III of the CDSM Directive.

With regard to the negotiation phase and the related concept best efforts of the OCCSPs, one of the biggest challenges with OCSSPs and streaming platforms, in general, is their tendency to lack transparency in sharing pertinent information necessary to establish a fair remuneration scheme. This method differs considerably from the traditional way of calculating royalty statements in the music industry, which relies on data and information detailing the basis of calculation, costs, deductions, and reserves. Meta’s lack of transparency has arguably contributed to SIAE's rejection of the proposed fee.

Regarding protected works’ removal lacking a licence, the massive blocking of Italian music from Facebook and Instagram raises several questions. On the one hand, there is an issue with the effectiveness of this measure, considering that, for example, music administrated by SIAE is not available on Italian Facebook and Instagram accounts but is still available for users outside Italy. On the other hand, complexity also emerges in relation to the management of legitimate uses, as indicated in the above-described categories.

On a final note, it seems that the ongoing dispute can present an opportunity to establish best practices for future negotiations and agreements, which could benefit other stakeholders and contribute to the effectiveness of the fairness and transparency principle in the negotiations between OCSSPs and rightsholders.