Copyrights, Internet: YouTube Decision May Obligate Content Check on Upload

06/25/2018
Client Alert

Summary

On June 6, 2018, the Commercial Court of Vienna decided in favor of private broadcaster Puls4 and determined that YouTube qualified as directly liable for copyright infringing video uploads of its users. If maintained, the decision would obligate YouTube (and indirectly other major online platforms) to perform a content check upon upload instead of only removing copyright infringing content upon notification (“notice-and-takedown”). Austrian case law is not binding for other EU member states, but the Commercial Court’s judgment denying YouTube the application of the Host Provider Privilege under EU law might still encourage similar decisions based on the same line of argument.

The Case

Puls4, an Austrian private broadcaster and affiliated company of major broadcasting group ProSiebenSat.1, sued YouTube in 2014 for an injunction removing Puls4 content that YouTube users had made available on YouTube. As in a multitude of other comparable cases in Europe, YouTube responded by asserting the Host Provider Privilege, i.e., a provision set out in Article 14 of the E-Commerce Directive exempting host providers under certain conditions from liability for infringing activities by their users. The decision was issued by the Commercial Court of Vienna as the court of First Instance, and YouTube has the right to appeal it. In comparable cases in other EU member states, YouTube has so far been able to either avoid direct liability or to settle cases before they were brought to the court of last resort.

The Host Provider Privilege

Article 14 of the E-Commerce Directive obligates Member States to ensure that a service provider is not liable for the information stored at the request of a recipient of a service, on the condition that the provider does not have actual knowledge of any illegal activity, or, upon obtaining such knowledge, acts expeditiously to remove or to disable access to the information.The latter provision is the basis for the notice-and-takedown procedure usually employed in such cases. The Host Provider Privilege, however, only applies if the service provider indeed qualifies as a “host provider” within the meaning of the E-Commerce Directive. In its decisions, the European Court of Justice (ECJ) has stated repeatedly that the host provider conditions are not met where

“. . . the service provider, instead of confining itself to providing that service neutrally by a merely technical and automatic processing of the data provided by its customers, plays an active role of such a kind as to give it knowledge of, or control over, those data.” (ECJ in L’Oreal ./.eBay)

The Decision

The decision has not yet been published, but the court’s main reasoning has been quoted as YouTube leaving the role of

“. . . a neutral mediator by, e.g., interconnecting, sorting, linking, providing content tables with predefined categories, tracking the search behavior of users and making tailor-made surfing suggestions.

In other words, the court has reviewed the operation of the YouTube platform and concluded that YouTube is going beyond merely providing a platform for user content.  Instead, the court determined that YouTube has, in fact, appropriated the users’ content through various structural and context-related measures. Based on its determination that YouTube does not qualify as a host provider, the court held that it is, correspondingly, also not entitled to the Host Provider Privilege.

Impact

Puls4’s managing director has called the decision a “milestone” in the fight of copyright owners to commercially exploit their work and to defend themselves against copyright infringements. Indeed, if the decision is not challenged, or if it is maintained by the court of appeal, online platforms like YouTube would be obligated to closely monitor all content being uploaded to avoid copyright infringements. The position of copyright owners, in turn, would improve by YouTube being added to the list of infringers that claims for injunctive relief could be asserted against. But it is likely that YouTube will appeal the decision. In proceedings of German collecting and performance rights organization GEMA against Google and YouTube regarding infringing use of music in UGC videos, both the Higher Regional Court of Hamburg and the Higher Regional Court of Munich had maintained upon appeal by GEMA that YouTube qualified as a “passive intermediary.” Following the decisions, GEMA did not take one of the cases to the Federal Court of Justice, but was instead compensated by YouTube for the use of music on basis of a settlement agreement.

Even if YouTube did not successfully appeal the decision of the Commercial Court of Vienna, it could – though less likely – theoretically change parts of its platform structure to try to comply with prerequisites under the Host Provider Privilege. Also, as the decisions of Austrian courts do not bind other European courts, it would remain to be seen whether other courts would follow the Vienna Commercial Court’s reasoning. After all, the Higher Regional Court of Hamburg, for instance, also had closely reviewed YouTube’s content structuring and did not determine YouTube to be directly liable. It must be noted, however, that the decision arguably follows the trend of ECJ decisions gradually broadening the scope of liability for copyright infringement. Also, the judgment might in part anticipate current EU legislative negotiations on a Copyright Directive,which might determine mandatory monitoring obligations for online service providers giving access to large quantities of audiovisual content.

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