content regulation / Copyright / Internet intermediaries / online platforms

Online platforms & copyright: The CJEU v The EC?

communicationtothepublic

Boosting the EU Digital Single Market is not an easy task. Full of energy, the European Commission (EC) disclosed its strategy one year ago in the Communication on Online Platforms and the Digital Single Market, in which it announced that “in the next copyright package, to be adopted in the autumn of 2016, the Commission will aim to achieve a fairer allocation of value generated by the online distribution of copyright-protected content by online platforms providing access to such content” (p. 9). The proposal for a Directive on Copyright in the Digital Single Market (CDSMD), released on 14 September 2016, is a key component of this copyright compendium. While the EU Legislature has been grappling with some of the most controversial provisions ever discussed in the field of copyright, the Court of Justice of the European Union (CJEU) has also been wrestling with copyright issues. As a result, two parallel interpretations of key notions such as ‘the right to communicate copyright works to the public’ have progressively emerged and evolved according to cases and political, lobby pressure.

While waiting for the Parliament to formally express its view on the CDSMD (the vote of the JURI Committee is scheduled for 25 January 2018), it is worth ignoring for one moment the political and judicial frenzy to attempt to answer one more time the burning question of whether online platforms hosting user generated content (UGC) communicate copyright works to the public and, therefore, should be considered as primary copyright infringers. Why is an answer to this question of importance? Well, first, because legal certainty should not necessarily be a luxury. Second, answering this question would help to determine whether, and to what extent, immunities granted to intermediary service providers (within the meaning of Articles 12 to 15 of the E-commerce Directive) should be applicable to acts of primary infringement.

Before digging further into the matter, it is essential to acknowledge that comparing the CJEU case law with the letter of a legislative proposal is a risky exercise. This is because the Legislature and the Court do not have the same function. While the CJEU is meant to answer legal questions referred by national courts, in order to help the latter solve disputes between parties, the Legislature is meant to set rules that are applicable to all those who operate within its jurisdiction. However, and obviously, because the CJEU interprets or ‘gives meaning to’ the rules set forth by the Legislature, the CJEU also has a law-making power. Nevertheless, generalising the norms formulated by the CJEU in the context of case law to create models covering factual scenarios not yet encountered by the CJEU is always a perilous exercise, as explained by Advocate General (AG) Szpunar as recently as last week at the last ERA annual Conference on copyright.

Now that the reader is warned, let’s try to synthesise!

In the CDSMD the EC seems [although appearances can sometimes be misleading] to give its interpretation of the key notion of ‘communication to the public’. This is not done in Article 13 of the Directive but in a recital, i.e. Recital 38, which explains why many have rightly criticised the drafting style of the EC.

Recital 38 specifies in its first paragraph:

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.”

The first and the last parts of the sentence are important for our purposes: the EC seems to suggest that the storage and provision of access to the public amounts to the performance of an act of ‘communication to the public’. As a consequence, online platforms shall enter into licensing agreements unless they can avail themselves from an immunity, i.e. Article 14 of the E-commerce Directive.

Would the CJEU share the same view?

Let’s assume an online platform ‘Y’ or ‘X’ is giving access to items of infringing content. [Note that this statement is slightly misleading in the sense that an item of content in itself is not necessarily infringing, but its communication to the public is infringing if the rightholder has not given his/her prior consent].

What would, or could, the CJEU decide after The Pirate Bay (TPB) case of 14 June 2017?

The CJEU does not exactly follow its Advocate General (AG) Szpunar  in this case (see his opinion here), but is definitely inspired by some of his findings, at least for the first question.

Readers surely remember that in GS Media (see my post here) the CJEU developed a multi-factorial test based on several complementary criteria (i.e. intervention in full knowledge of the consequences of one’s action, use of different technical means, or communication to a new public, activity of a profit-making nature) in order to characterise an act of ‘communication to the public’, introducing a presumption of knowledge when the activity at stake is for profit. At paragraph 51 of its judgement, the CJEU held:

“when the posting of hyperlinks is carried out for profit, it can be expected that the person who posted such a link carries out the necessary checks to ensure that the work concerned is not illegally published on the website to which those hyperlinks lead, so that it must be presumed that that posting has occurred with the full knowledge of the protected nature of that work and the possible lack of consent to publication on the internet by the copyright holder.”

In TPB, the CJEU also applies a multi-factorial test and follows its AG on one crucial point: its refuses to presume knowledge from the mere fact that the activity at stake is for profit. It simply notes at para. 46 that there can be no dispute that the making available and management of an online sharing platform, such as that at issue in the main proceedings, is carried out with the purpose of obtaining profit.”

AG Szpunar had explained in his opinion why applying a presumption of knowledge to the activity of online platforms is problematic: “Such a presumption would amount to imposing on operators of indexing sites of peer-to-peer networks, which normally operate for profit, a general obligation to monitor the indexed content.” [para. 52]. [We also made a similar point in our extended statement of November 2016].

A fortiori, such a rationale would also apply for other types of online platforms, in particular those that do not have an intention to encourage user infringement.

If knowledge shall not be presumed from the fact that the activity at stake is of a profit-making nature, how could it be characterised?

To note, knowledge seems to be relevant for both the characterisation of an indispensable intervention and a new public. [This raises the question whether these two factors are not overlapping. In any case even, if intervene[ing], in full knowledge of the consequences of his action, to give his customers access to a protected work only requires the knowledge of giving access to UGC, the new public criterion does seem to require that the platform operator is aware (or “not unaware”) that it provides access to works published without the consent of the rightholders.]

In his opinion, AG Szpunar states:

Those operators should therefore in my view also be considered, simultaneously and jointly with the users of the network, as originating the making available to the public of works that are shared on the network without the consent of the copyright holders, if they are aware of that illegality and do not take action to make access to such works impossible. [para. 53]

Here it is the last part of the sentence that is important.

Reading and re-reading the AG’s opinion it would seem that he is saying that the platform needs to be aware of the fact that a specific item of content is infringing to communicate the work at stake to the public. This is because AG Szpunar starts with the following:

“I should like to make clear that the site’s operator must have actual knowledge of the facts. That is so, inter alia, in a situation where that operator has been expressly alerted by the rightholder of the illegal nature of the information appearing on the site.” Para. 52.

In any case, the AG does seem to suggest that if knowledge, be it specific or general, is missing the platform does not communicate copyright works to the public because its intervention is not deliberate.

While the reasoning of the Court does not mirror that of the AG, overall it does seem to opine that for the purpose of characterising a communication to the public, the [general] knowledge of the fact that the platform is used for user infringing activities and the implementation of mitigation measures such as notice-and-take-down procedures are relevant [the ‘and’ is really important here]. Said otherwise, knowledge would then be presumed from the lack of an [effective] notice-and-take-down procedure.

The [effective] implementation of a notice-and-take-down procedure would thus be crucial to determine whether an online platform is communicating copyright works to the public.

Following this line of reasoning, it appears that primary infringement (i.e. infringement of the right to communicate copyright works to the public) and Article 14 immunity should be conceived as exclusive of one another. In other words, the immunity of Article 14 of the E-commerce Directive should not apply in cases in which online platforms communicate copyright works to the public and thereby are primary infringers. This is because if online platforms communicate copyright works to the public this should imply that they do not have [effective] notice-and-take-down procedures in place.

Article 14 of the E-commerce Directive would then become relevant only in cases of secondary liability, irrespective of the ground used at the national level for this purpose.

To sum up, one could draw the following table:

Evidence Knowledge  
Intent to build a platform to allow users to exchange © works without prior authorisation Actual knowledge of the consequences of one’s action giving access to © works

And/or actual knowledge that the platform provides access to works published without the consent of the rightholders

Platform for UGC + no effective NTD Constructive knowledge of the consequences of one’s action giving access to © works

And/or constructive knowledge that the platform provides access to works published without the consent of the rightholders

Platform for UGC  + effective NTD No constructive knowledge of the consequences of one’s action giving access to © works

And/or no constructive knowledge that the platform provides access to works published without the consent of the rightholders

So why didn’t the CJEU evoke the E-Commerce Directive in TPB? This could be explained by the fact that, if a platform is communicating copyright works to the public one should not try to apply Article 14, the assumption being that if the platform is communicating to the public it is not being diligent in that it does not implement an effective notice-and-take-down procedure.

Could it be that, for once, the CJEU came up with a rather ‘simple’ solution? Would the EC agree?

 

Sophie Stalla-Bourdillon

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