Article 15(1) ECD is dead! Long live Article 15(2) ECD! Or how the European Commission stroke the last blow to the ECD safe harbours with its proposed copyright Directive!

 

So here we are, never 2 without 3. After the proposed Audiovisual Media Services Directive (AMSD), and the Code of Conduct on countering illegal hate speech, here comes the proposed Directive on copyright in the Digital Single Market!

This proposed Directive contains 24 Articles and touches upon hotly debated and controversial issues, such as exceptions to copyright and new rights (e.g. rights in publications to the benefit of publishers of press publications).

One of the most daring parts of the proposed Directive is Article 13, to be read together with Recitals 38. Let’s start with Article 13:

“1. Information society service providers that store and provide to the public access to large amounts of works or other subject-matter uploaded by their users shall, in cooperation with rightholders, take measures to ensure the functioning of agreements concluded with rightholders for the use of their works or other subject-matter or to prevent the availability on their services of works or other subject-matter identified by rightholders through the cooperation with the service providers. Those measures, such as the use of effective content recognition technologies, shall be appropriate and proportionate. The service providers shall provide rightholders with adequate information on the functioning and the deployment of the measures, as well as, when relevant, adequate reporting on the recognition and use of the works and other subject-matter.

2. Member States shall ensure that the service providers referred to in paragraph 1 put in place complaints and redress mechanisms that are available to users in case of disputes over the application of the measures referred to in paragraph 1.

3. Member States shall facilitate, where appropriate, the cooperation between the information society service providers and rightholders through stakeholder dialogues to define best practices, such as appropriate and proportionate content recognition technologies, taking into account, among others, the nature of the services, the availability of the technologies and their effectiveness in light of technological developments.”

To translate, two types of obligations are imposed upon “information society service providers that store and provide to the public access to large amounts of works or other subject-matter uploaded by their users” [interesting use of the adjective ‘large’]. These providers are also known, for those nostalgic of the e-commerce Directive (ECD) terminology, as (potential) hosting providers; and, to use the language of the proposed AMSD, should be deemed to include video-sharing platforms. These two obligations seem to be alternative [whereas they were cumulative in the draft leaked by IPKat]:

1. Either “to take measures to ensure the functioning of agreements concluded with rightholders for the use of their works or other subject-matter”;
2. Or “to prevent the availability on their services of works or other subject-matter identified by rightholders through the cooperation with the service providers.”

The possibility [is it really a possibility?] to pick the second measure could seem at first glance a modernised formulation of Article 14 of the ECD. Remember, Article 14 deals with “hosting” and states that “Where an information society service is provided that consists of the storage of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that: (a) the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or (b) the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information…”.

But looking more closely, this does not seem to be the case. This is for 2 reasons.

First, strictly speaking Article 14 does not make notice-and-take-down procedures mandatory. It “simply” aims to makes sure that hosting providers cannot be held liable in certain circumstances, in particular when they have in place prompt notice-and-take-down procedures [but this difference might be too subtile!].

Second, preventing “the availability on their services of works or other subject-matter identified by rightholders through the cooperation with the service providers” means using effective content recognition technologies… which translates into, if that was not clear, the use of ex ante screening of all types of content uploaded on hosting providers’ systems.

So what?

Well, Article 15(1) of the ECD prohibits Member States from imposing upon intermediary providers, such as hosting providers, general monitoring obligations (that is, it prohibits obligations that would require them to monitor “the information which they transmit or store, [or]…actively to seek facts or circumstances indicating illegal activity”. Couldn’t it be that Article 13 of the proposed copyright Directive directly contradicts Article 15(1) of the ECD?

A reasonable answer to this question would be YES IT DOES, at least if one follows the reading of the Court of Justice of the European Union (CJEU) in the Netlog case of 2012, which after the Scarlet case of 2011, had been decided without an Advocate General’s opinion [this should have meant that the answer to the question posed was EASY!]

To quote from the CJEU in 2012 at para. 33 and 34:

“Consequently, those rules must, in particular, respect Article 15(1) of Directive 2000/31, which prohibits national authorities from adopting measures which would require a hosting service provider to carry out general monitoring of the information that it stores (see, by analogy, Scarlet Extended, paragraph 35).

In that regard, the Court has already ruled that that prohibition applies in particular to national measures which would require an intermediary provider, such as a hosting service provider, to actively monitor all the data of each of its customers in order to prevent any future infringement of intellectual-property rights. Furthermore, such a general monitoring obligation would be incompatible with Article 3 of Directive 2004/48 [the intellectual property rights enforcement Directive], which states that the measures referred to by the directive must be fair and proportionate and must not be excessively costly (see Scarlet Extended, paragraph 36).”

Note in passing [but only if you have the time], that in the  Netlog case the CJEU had included in its balancing exercise the right to protection of personal data (Article 8 of the EU Charter of Fundamental Rights). Yet mention of this right is completely absent from the assessment undertaken by the European Commission, as revealed by the impact assessment leaked by Statewatch a few weeks ago.

So what? Can’t the EU legislator reverse a solution previously adopted by the CJEU? Yes, it can, but the question is whether it should!!! And assuming the EU legislator had had the intention to show its muscles to the CJEU, it should have said it clearly!!! Yet it is all implicit [and devious… I am tempted to add]! Moreover, if Netlog should be forgotten what do we do with its sibling, the Scarlet case concerning mere conduits?

Have a look at Article 1 of the proposed copyright Directive, which is meant to design the scope of the new instrument. It does not mention the ECD. Should we read Article 1 a contrario? Does it mean that the proposed copyright Directive does not leave intact the ECD?

There is at least an attempt to address in an explicit manner the interplay between the proposed copyright Directive and the old ECD in the proposed copyright Directive. This is where one should read [but only once sat on a safe chair] Recital 38:

“Where information society service providers store and provide access to the public to copyright protected works or other subject-matter uploaded by their users, thereby going beyond the mere provision of physical facilities and performing an act of communication to the public, they are obliged to conclude licensing agreements with rightholders, unless they are eligible for the liability exemption provided in Article 14 of Directive 2000/31/EC of the European Parliament and of the Council.

In respect of Article 14, it is necessary to verify whether the service provider plays an active role, including by optimising the presentation of the uploaded works or subject-matter or promoting them, irrespective of the nature of the means used therefor.

In order to ensure the functioning of any licensing agreement, information society service providers storing and providing access to the public to large amounts of copyright protected works or other subject-matter uploaded by their users should take appropriate and proportionate measures to ensure protection of works or other subject-matter, such as implementing effective technologies. This obligation should also apply when the information society service providers are eligible for the liability exemption provided in Article 14 of Directive 2000/31/EC.” [emphasis added]

What the hell is happening? Note that Article 15 of the ECD is not mentioned [although it was in the leaked draft]. Why???

Note as well, that the European Commission does not always need to show its muscles to the CJEU and, in fact, it does seem to have warmly welcomed the decision of the CJEU in GS Media (previously discussed in my post here). The European Commission dares writing in a recital to a directive that a hosting provider could be communicating protected works to the public! [Wow!!!]. But then how can one say that a hosting provider can still benefit from Article 14 of the ECD, as the situation seems to be either you are a (primary) copyright infringer, or you are an intermediary provider and could thus try to shelter yourself under Article 14! Is the European Commission now saying that Article 14 could be used even in cases in which online service providers are considered prima facie (primary) infringers [which could be of some help to some hyperlinkers….]?

Finally, is the European Commission creating a new condition of eligibility, which would have to be met by service providers if they want to ensure they can avail themselves of the liability exemption provided by Article 14 of the ECD?

All of this thus shows that it will be very difficult to find harmony between the proposed copyright Directive and the ECD. Could it be that the proposed copyright Directive is meant to be seen as a special piece of legislation derogating from the general principles set out in the ECD? Could this make the obligation to implement content recognition technologies a special monitoring obligation? [Reading the leaked draft of the proposed copyright Directive and in particular Recital 39 this might have been the intention!]

Dear European Commission, too many riddles in one directive is never never a good sign!

 

Sophie Stalla-Bourdillon