Belgian Constitutional Court refers 13 questions on DSM Directive to the CJEU

Yesterday, the Constitutional Court of Belgium issued a ruling in joined cases 7922, 7924, 7925, 7926, 7927, concerning the validity of the Belgian law that transposed Directive (EU) 2019/790 [DSM Directive; see an earlier post on this case here]. The ruling stays the proceedings and refers 13 questions to the Court of Justice of the European Union (CJEU). While the 182 pages of the ruling will surely make for numerous scholarly articles, this Kat has tried to briefly summarise its main points in this post.

Background

In 2022, Belgium adopted a law that transposed the DSM Directive into the Belgian Code of Economic Law. In so doing, the Belgian legislator arguably went beyond what was required by the Directive and introduced new statutory remuneration rights for authors and performers.

These new rights, as well as the Belgian institutional set-up for the press publishers’ right, are now being challenged in front of the Belgian Constitutional Court through five lawsuits that have been joined in one case:

• 7922, initiated by Google
• 7924, initiated by Spotify
• 7925, initiated by Meta
• 7926, initiated by Streamz (a local streaming service)
• 7927, initiated by Sony

The claimants request the annulment of Articles XI.216/1 (case no. 7925), XI.216/2 (cases nos. 7922 and 7925), XI.228/4 (cases nos. 7922 and 7927), chapter 4/2 (cases nos. 7924 and 7927), XI.228/10 (cases nos. 7924, 7926 and 7927) and XI.228/11 (cases nos. 7924, 7926 and 7927) of the Code of Economic Law.

Their claims and the corresponding questions referred to the CJEU are detailed below.

Press publishers’ right (Arts. XI.216/1 and XI.216/2)

Art. 15 of DSM Directive introduced a related right for press publishers to control the online uses of their press publications by information society service providers (ISSPs).

In its own transposition of the provision, the Belgian legislator not only introduced a new related right, but also foresaw that press publishers and ISSPs shall negotiate in good faith over the remuneration due. If no agreement is reached in four months, one of the parties may seize the Belgian Institute for Postal Services and Telecommunications (IBPT) that will decide on the amount of remuneration. The IBPT’s decisions may be challenged in front of the local courts. Moreover, ISSPs are obliged to provide press publishers up-to-date, relevant and comprehensive information on the exploitation of press publications within 1 month from receiving a corresponding request.

These norms are challenged by the claimants who essentially submit that:

• the negotiation procedure under Arts. XI.216/1 and XI.216/2 obliges them to enter into negotiations even where they do not plan to use the content from a specific publisher (as such publisher will end up seizing IBPT);
• IBPT is an administrative authority that lacks necessary expertise for setting remuneration;
• requirements on sharing information are disproportionate and oblige ISSPs to share confidential information.

Some of the claimants also observed that press articles are often published behind paywalls and that ISSPs will be forced to pay for press articles that are not even accessible to their users.

Our readers may remember that some of these issues are already considered by the CJEU upon referral from an Italian court. Nevertheless, the Belgian Constitutional Court found that additional guidance from the CJEU is necessary and referred the following questions on this matter [unofficial translation by this Kat]:

1. Should Article 15 of [DSM Directive] be interpreted as precluding national legislation providing for a defined negotiation procedure, supervised by an administrative authority whose decisions are subject to appeal before a court, which may result in an obligation to remunerate press publishers for the online use of their press publications, regardless of whether those publications were put online by the press publishers themselves?

2. Must Article 15 of [DSM Directive], read in conjunction with Articles 16, 20 and 21 of the Charter of Fundamental Rights of the European Union, be interpreted as precluding national legislation imposing on the ISSPs a unilateral and non-reciprocal obligation to provide information to press publishers, in particular concerning confidential information relating to the exploitation of press publications to be provided to press publishers, even if the press publishers themselves have put the press publications online, and without taking into account the profits generated by the press publishers or the level of recovery of their investment through the online use of their press publications on the platforms made available by the aforementioned provider, without providing a guarantee that the confidential information concerned will be retained in accordance with the conditions imposed by the aforementioned provider?

3. Must Article 15 of [DSM Directive], read in conjunction with Articles 16, 20 and 21 of the Charter of Fundamental Rights of the European Union and Article 15 of [Directive 2000/31/EC] be interpreted as precluding national legislation which imposes conditions under which agreements with each press publisher for the online use of its press publications must be concluded, including an obligation to provide remuneration for the online use of press publications, irrespective of whether the publications concerned were put online by the press publishers themselves, which would cover all press publications, without distinguishing whether the content is protected by copyright or not or whether users can access the publications in question in their entirety or only extracts thereof, and which would have the effect of imposing an obligation to closely monitor the content published by users on the platform?

Unwaivable remuneration right for authors and performers for uses by OCSSPs (Art. XI.228/4)

In its transposition of Art. 17 DSM Directive, the Belgian legislator introduced a new unwaivable right for authors and performers, who have assigned their communication to the public right for uses done by online content-sharing service providers (OCSSPs) to a third party, to receive remuneration from OCSSPs. This remuneration right is subject to mandatory collective management. It stems from the ruling of the Constitutional Court that these provisions were criticised by the European Commission as being non-compliant with Art. 17 DSM Directive.

Claimants alleged that this remuneration right is not foreseen under the DSM Directive and leads to a situation of double remuneration, whereby OCSSPs have to pay both the third party owning the right (such as a musical producer) and the author or performer. They also claimed that this new system goes against the traditional set-up of licensing practices in Europe and will lead to market fragmentation.

Under these circumstances, the Constitutional Court seeks the following clarifications as to the compatibility of Art. XI.228/4 with EU law [unofficial translation by this Kat]:

4. Is Article 1(1)(f) of [Directive (EU) 2015/1535] to be interpreted as meaning that a national provision establishing a mandatory, inalienable and non-transferable right to remuneration for authors and performers, where they have assigned their right to authorise or refuse the communication to the public of their works or other protected subject-matter by an [OCSSP], which can only be exercised through mandatory collective rights management, constitutes a ‘technical regulation’, the draft of which is subject to prior notification to the Commission in accordance with the first subparagraph of Article 5(1) of Directive (EU) 2015/1535? If applicable, is the exception to the notification obligation provided for in Article 7(1)(a) of the same Directive applicable?

5. Must Article 17 of [DSM Directive], cited above, read in conjunction with Article 3 of [Directive 2001/29/EC] be interpreted as precluding national legislation introducing a mandatory, inalienable and non-transferable right to remuneration for authors and performers, where they have assigned their right to authorise or prohibit communication to the public by an online content-sharing service provider, and providing that that right to remuneration may be exercised only through a mandatory collective rights management mechanism, in particular where the right to make available to the public has already been licensed to the aforementioned provider?

6. Must Article 18 of [DSM Directive], cited above, be interpreted as precluding national legislation introducing a mandatory, inalienable and non-transferable right to remuneration for authors and performers, where they have assigned their right to authorise or prohibit communication to the public by an online content-sharing service provider, and providing that that right to remuneration may be exercised only through a mandatory collective rights management mechanism?

7. Must Article 56 TFEU be interpreted as precluding national legislation which provides, without a transitional period, for a mandatory, inalienable and non-transferable right to remuneration for authors and performers, where they have assigned their right to authorise or prohibit communication to the public by an online content-sharing service provider, and which provides that that right to remuneration may be exercised only through a mandatory collective rights management mechanism, in particular where the right to make available to the public has already been licensed to the aforementioned provider?

8. Must Article 16 of the Charter of Fundamental Rights of the European Union, whether or not read in conjunction with Articles 20 and 21 of that Charter, be interpreted as precluding national legislation which provides for a mandatory, inalienable and non-transferable right to remuneration for authors and performing artists, where they have assigned their right to authorise or prohibit communication to the public by an [OCSSP], and which provides that that right to remuneration may be exercised only through a mandatory collective rights management mechanism?

Unwaivable remuneration right for authors and performers for uses by streaming platforms (XI.228/10 and XI.228/11)

Within the same reform, the Belgian legislator also introduced an unwaivable right for authors and performers, who have assigned their communication to the public right for uses done by streaming platforms to a third party, to receive remuneration from streaming platforms. This right is also subject to mandatory collective management.

This statutory remuneration right does not have direct legal basis in the DSM Directive, though it may be seen as an implementation of Art. 18 therein, which calls for appropriate and proportionate remuneration for authors and performers. Here again the claimants essentially allege that this leads to double remuneration from streaming platforms.

The Constitutional Court also inquires on the compatibility of this right with EU law [unofficial translation by this Kat]:

 

9. Must Article 1(1)(f) of Directive (EU) 2015/1535, cited above, be interpreted as meaning that a provision of national law establishing a mandatory, inalienable and non-transferable right to remuneration for authors and performers of an audio or audiovisual work, which can be exercised only through mandatory collective management of rights, where they have assigned their right to authorise or refuse the communication to the public of their works or other protected subject-matter by a streaming service provider, constitutes a ‘technical regulation’, namely a ‘rule relating to services’, within the meaning of that provision, the draft of which is subject to prior notification to the European Commission pursuant to the first subparagraph of Article 5(1) of that directive, and, where appropriate, is the exception to the notification obligation provided for in Article 7(1)(a) of that directive applicable? For the purposes of this question, a "streaming service provider" means a provider of information society services whose main objectives are at least to offer for profit a significant quantity of audio or audiovisual works protected by copyright or related rights, whose users have a right to access the aforementioned works from a place and at a time of their own choosing, it being understood that these users cannot acquire a permanent reproduction of the work consulted and that the provider has editorial responsibility for the offer and organisation of the service, including the organisation, classification and promotion of the works concerned.

10. Must Article 18 of [DSM Directive], read in conjunction with Article 20 of that directive, be interpreted as precluding a provision of national law establishing a mandatory, inalienable and non-transferable right to remuneration for authors and performers of an audio or audiovisual work which can be exercised only through mandatory collective management of rights, where they have assigned their right to authorise or refuse the communication to the public of their works or other protected subject matter by a streaming service provider within the meaning of that provision, in particular where the right to make available to the public has already been licensed to the aforementioned provider?

11. Must Article 56 TFEU be interpreted as precluding a provision of national law establishing a mandatory, inalienable and non-transferable right to remuneration for authors and performers of an audio or audiovisual work which can be exercised only through mandatory collective management of rights, where they have assigned their right to authorise or refuse the communication to the public of their works or other protected subject matter by a streaming service provider within the meaning of the above, in particular where the right to make available to the public is already licensed to that provider?

12. Must Article 16 of the Charter of Fundamental Rights of the European Union be interpreted as precluding a provision of national law establishing a mandatory, inalienable and non-transferable right to remuneration for authors and performers of an audio or audiovisual work which can be exercised only through mandatory collective management of rights, where they have assigned their right to authorise or refuse the communication to the public of their works or other protected subject-matter by a streaming service provider within the meaning of the above, in particular where the right to make available to the public is already licensed to that provider?

13. Must Articles 3 and 5(3) of Directive 2001/29/EC, cited above, be interpreted as precluding a provision of national law establishing a mandatory, inalienable and non-transferable right to remuneration for authors and performers of an audio or audiovisual work which can be exercised only by means of mandatory collective management of rights, where they have assigned their right to authorise or refuse the communication to the public of their works or other protected subject-matter by a streaming service provider within the meaning of the above, in particular where the right to make available to the public is already licensed to that provider?

Comment

Some readers might wonder why the Belgian Constitutional Court has been seized to assess the Belgian transposition of EU law. The reason is that claimants allege that the various provisions of the copyright reform go against constitutional rights and freedoms, such as the freedom of contract and the freedom to conduct a business.

Against this, the Belgian government has suggested that rather than seeking a genuine constitutional challenge, by doing so the claimants try to directly seize the CJEU with their referrals.

In all this, one thing is clear: the CJEU will now have to provide guidance on the most contentious articles of the DSM Directive and such guidance will be applicable throughout the EU.