The EU Copyright Directive Passes – But Member States Remain Split on Upload Filters

The EU Member States' Approval

The Directive on Copyright in the Digital Single Market (“Directive”) was finally approved by all EU legislative bodies on April 15, 2019. Introducing “modernizing EU copyright rules for European culture to flourish and circulate” was a key initiative of the European Commission’s Digital Single Market (DSM), which, according to the Commission’s President Jean-Claude Juncker, has now been completed by the Directive as “the missing piece of the puzzle.” The Directive was approved just in time for the elections to the EU Parliament taking place in May 2019. Within a period of 24 months, the Member States are required to implement the Directive’s provisions into national law.

Various Member States have issued, along with their approval of the Directive, statements regarding their interpretation of the Directive and voicing quite different views about the upcoming implementation process (https://data.consilium.europa.eu/doc/document/ST-7986-2019-ADD-1-REV-2/en/pdf). While Germany strongly opposes the notion of upload filters, it appears that France is in favor of a copyright protection mechanism that includes upload filters. At the same time, it remains a pressing question whether currently available algorithm-based filters would even be able to sufficiently differentiate between infringing and non-infringing content.

These dissonant views, as well as the sometimes vague wording of the Directive, have raised concerns that Member States will implement the Directive in different ways, leading to a lack of harmonization across the EU. The Directive, however, expressly requests a harmonized implementation and anticipates stakeholder dialogues led by the EU Commission and the Member States.

The Dissonant Vote

• European Parliament, March 26: The vote saw the Directive adopted without amendments, with 348 votes in favor and 274 votes against. The upstream vote on whether to consider amendments to the press publishers’ right and the platform liability regulation, however, was rejected by only five votes (13 parliamentarians reportedly pressed the wrong button, meaning the motion would otherwise have passed).
• Council of the European Union, April 15: On April 15, the Directive cleared its final hurdle by passing the last Council vote. Six Member States rejected the Directive (Italy, Sweden, Finland, Poland, The Netherlands, and Luxembourg), and Belgium, Estonia, and Slovenia abstained. However, the proposal was backed by 19 countries, representing 71.26% of the voting power.

What the Directive Will Change

The final, adopted version of the Directive (http://www.europarl.europa.eu/doceo/document/TA-8-2019-0231_EN.html) coincides with the trilogue compromise (see a detailed assessment of the main provisions in our Client Alert “The EU Copyright Directive hits the Homestretch”) and provides the following main changes. Due to mere editorial changes, its articles have been renumbered:

• Online content-sharing service providers’ liability for copyright-infringing content, Article 17 (ex–Art. 13)
  Online content-sharing services are subject to direct liability for copyright-infringing content uploaded by their users if they fail to prove that they made “best efforts” to obtain the rights holder’s authorization or fail to evidence that they made “best efforts” to ensure the unavailability of such content. They are also liable if they fail to act expeditiously to take down uploads of work for which they have received a takedown notice.
• Ancillary copyright for press publishers, Article 15 (ex–Art. 11)
  Press publishers are granted an ancillary copyright for press publications, covering the reproduction and making available of such content by information society service providers (excluding only hyperlinks accompanied by “individual words or very short extracts”).
• Further provisions
  The Directive also introduces exceptions and limitations (e.g., for text and data mining (incl. in favor of commercial enterprises)); provisions regarding collective licensing; and recall, transparency, and fair remuneration rights for authors.

Harmonized Implementation?

The Directive is expressly designed to provide a harmonized legal framework in order to prevent the fragmentation of the European market. Article 17(10) of the Directive anticipates that the Commission will conduct stakeholder dialogues with all interest groups, especially online service providers and rights holders, on best practices regarding the obligations under Article 17. Drawing on these dialogues, the EU Commission is required to issue guidelines on the application of “best efforts” requirements, as well as the cooperation with rights holders (i.e., the rights holders’ notification of protected works to online service providers and the negotiation of license agreements).

• Germany has already declared that it will take an active role in these stakeholder dialogues, and that it presumes the promotion of a harmonized implementation of Article 17 to be one of the main goals of these dialogues. The statement issued by Germany voices strong opposition to the notion of upload filters as a mechanism for ensuring the permanent staydown of infringing content. If such “technical solutions” are still used in order to comply with Article 17, the German statement requests taking into account the data protection requirements of the General Data Protection Regulation (GDPR), as well as the overall principle of proportionality. The statement also proposes the development of open-source technologies with open interfaces (APIs) to provide for standardization and to prevent the market domination of a few established filtering technologies.
  
  Furthermore, Germany has raised the issue that the definition of the term “online content sharing service provider” urgently requires further clarification, and that it intends to expressly exclude certain types of platforms and service providers.
• France is expected to follow a stricter approach. In a speech given just one day after the final vote in the European Parliament, the Minister for Culture announced that the French High Authority for the Dissemination of Works and the Protection of Rights on the Internet, jointly with the Higher Council for Literary and Artistic Property and the National Center for Cinema and the Moving Image, will launch a project promoting “content recognition technologies.” The Minister underlined that said project is essential to enabling Article 17, and that there is “no time to waste on this topic.”
• The Netherlands, Luxembourg, Poland, Italy, and Finland, all of which rejected the Directive in the final Council vote, declared the Directive to be a step backwards for the DSM, failing to strike a fair balance between the protection of rights holders and the interests of citizens and companies, or to provide legal certainty.
• The stance of the UK is less clear, which may be due to the expected Brexit, as a result of which the UK would no longer be obliged to transpose the Directive into national law. Leading Conservative politician and former Foreign Minister Boris Johnson insisted that the UK not apply Article 17, arguing it would be “terrible for the internet.”

Outlook – Stakeholder Dialogues & Implementation Process

The stakeholder dialogues of the implementation process will represent an important period for stakeholders wanting to raise their voices as to (i) ensuring that the concrete implementation of the so-far vague wording of Article 17 of the Directive will reflect an appropriate solution and (ii) for those platforms with uncertain qualification as an online content-sharing service provider as to ensuring that they will be included in the list of platforms to which Article 17 does not apply.

This client alert has also been published in Lexology, which delivers the most comprehensive source of international legal updates, analysis and insights.