Transposing the EU's platform liability regime into Dutch, German and Irish law

Out-Law Analysis | 15 Oct 2021 | 4:25 pm | 6 min. read

The EU's Digital Single Market (DSM) Copyright Directive is set to adapt the European Union's copyright law to the requirements of a digital society, but only few member states have adequately transposed it into national law within the deadline.

The DSM Copyright Directive contains a whole bundle of measures aiming to provide a fair regulatory framework for the digital use of copyright within the digital single market. Amongst the most discussed articles of the Directive is the new exploitation right and liability system for acts of communication to the public by online content-sharing service providers (OCSSPs) laid down in article 17. Above all, article 17 aims to reconcile the rights of OCSSPs, platform users and copyright holders.

Although the deadline for transposing the Directive into national law passed on 7 June this year, 24 out of 27 EU member states have so far failed to transpose it or have done so insufficiently, according to the EU Commission. Germany and the Netherlands are amongst those member states that have duly implemented the new law, while others, like Ireland, are still in discussion.

'Policy neutral' implementation in the Netherlands

The Dutch legislator started the transposition process quite early. A proposed draft implementation act was published only three months after the DSM was adopted. During the consultation process the proposed draft received 57 responses from a wide variety of stakeholders – including rightsholders, OCSSPs, and advocacy organisations.

Among other things, stakeholders criticised the way the proposed draft translated certain terms from the DSM Copyright Directive. Specifically, the translation of the terms "OCSSPs" and "best efforts" received a fair amount of criticism.
"OCSSP" was translated to the Dutch equivalent of "platform provider". Critics said 'platform provider' would result in a wider scope of application of Article 17 DSM than intended, as it would for example include hosting providers.

Another notable aspect of the Dutch law concerned the obligation for OCSSPs to make "best efforts" to obtain copyright clearance for the content on their platforms. As Dutch law does not have an equivalent concept for 'best efforts', the Dutch legislator originally chose to use terminology that can be loosely translated as "to do anything within its power". Some stakeholders objected to this translation as it would potentially raise the bar for OCSSPs in their efforts to comply with the obligations under Article 17.

Van Grondelle Sari 1

Sari van Grondelle

Associate

In the end, the legislator chose a 'policy neutral' implementation that closely resembles the DSM text.

A common point of criticism in the consultation phase was that the Dutch legislator unnecessarily deviated from the DSM text. Following this feedback, the legislator changed its approach and chose a 'policy neutral' implementation that closely resembles the DSM text.

A first draft of the implementation act was published on 11 May 2020, the new law was adopted on 15 December 2020 and came into force on 7 June 2021. Article 17 of the DSM Copyright Directive was implemented in the Dutch Copyright Act, spread over 3 separate articles, which transposed the text of the EU Directive almost literally.

Wouter Seinen

Wouter Seinen

Partner, Head of Amsterdam Office

The Netherlands could be an interesting Member State to get controversial issues pushed through the judicial pipeline.

This "plain vanilla" implementation approach sheds little light on how to interpret the new requirements, but this could make the Netherlands an interesting Member State to get controversial issues and doctrinarian questions pushed through the judicial pipeline. The Netherlands’ judicial system accommodates quick pathways to the Court of Justice of the EU (CJEU) since injunction proceedings are commonplace in the Netherlands, appeals to High Courts and the Supreme Court is possible and the High Courts may bypass the Supreme Court and directly lodge preliminary questions to the CJEU.

Elaborate guidance to the market in Germany

In contrast, Germany has taken a very detailed approach: Article 17 has been transposed in a stand-alone act holding 22 paragraphs, divided in six parts and aimed at balancing the different interests of OCSSPs, rights holders and users. The new act is called Urheberrechts-Diensteanbieter-Gesetz (UrhDaG), was adopted on 31 May 2021 and came into force one week later. It gives the market elaborate guidance with regard to acts of communication to the public.

The UrhDaG obliges OCSSPs to either obtain a licence or to comply with duties of conduct: A service provider is obliged to make best efforts to acquire the contractual rights of use for the communication to the public of works protected by copyright law. OCSSPs are required to obtain their own license when offered or when such licenses are available through representative rightsholders or through collective rights management organisations. Authors can bring direct remuneration claim against OCSSPs.

Uses under the exceptions of quotation, criticism, review, caricature, parody or pastiche are permitted by law, but in these cases a proportionate remuneration must be paid to the rightsholder. The OCSSP’s permission is deemed to also justify the platform user’s use of the work and vice-versa.

In cases of prohibited use of copyright protected works, the OCSSP is obliged to ensure by blocking or by removal of the content that a work is not publicly reproduced and is not available for this purpose in the future. Steps must be taken as soon as the rightsholder requests them and provides the necessary information. However, this shall not result in the unavailability of content uploaded by users when use is permitted by law. Therefore, the OCSSP must immediately inform the user that content uploaded by them has been blocked and must inform them of their right to lodge a complaint.

Rauer Nils

Dr. Nils Rauer, MJI

Rechtsanwalt, Partner

OCSSPs must make a complaints procedure available to users and respond to every complaint within one week.

Accordingly, the OCSSP must make an effective, free of charge and expeditious complaints procedure available to users and rightsholders. The service provider must immediately communicate the complaint to all parties involved, give all parties involved the opportunity to comment on the complaint and decide on the complaint within one week after it has been filed.

To avoid over-blocking by upload filters, presumably permitted uses are to be publicly reproduced until the conclusion of a complaint procedure. Uses assumed to be permitted are user generated content that contains less than half of the work or works, combined parts of such portions, or where the work forms minor uses or uses marked by the user as permitted by law. Minor uses are 15 seconds of a video, 15 seconds of a sound piece, 160 characters of text, or images up to 125KB in size.

The UrhDaG also provides for special treatment of start-ups and small OCSSPs and exempts seven categories of providers from these obligations, including online marketplaces, cloud services offered amongst companies and cloud services allowing users to upload content for personal use.

Work in progress in Ireland

As several of the major OCSSPs have their European headquarters in Ireland and Ireland also has a booming arts and creative industries sector with a significant film industry, the possible effects of Article 17 are hotly debated. Ireland has yet to implement the DSM Copyright Directive, but the country has engaged in several public consultations.

The government department responsible, the Department of Enterprise, Trade and Employment (DETE) has decided to give effect to the directive’s mandatory provisions by way of regulations contained in a statutory instrument.  This is required only for provisions that are not already addressed in existing copyright legislation. The draft statutory instrument is expected to be published by the Intellectual Property Unit in the DETE within weeks.

Henry Ann_Dec 2019

Ann Henry

Partner

One of the main concerns looking at Article 17 is the use of the words 'best efforts'.

The draft legislation includes a transposition of Article 17 which is largely expected to reflect the wording of the directive, like in the Netherlands. But one of the main concerns for many Irish lawyers looking at Article 17 is the use of the words "best efforts": Online platforms will have to make "best efforts" to obtain authorisation from rights holders and to ensure the unavailability of specific works for which rightsholders have provided relevant and necessary information. They will also have to act expeditiously once appropriately notified by a rightsholder to remove or disable content and use "best efforts" to prevent future uploads.

The words "best efforts" might be commonly used in contracts on the continent, but the wording is uncommon in Ireland and the UK. What you often see instead is the use of the term "best endeavours". But the case law makes clear that an obligation to use "best endeavours" is a high bar, requiring those who commit to it to engage in significant due diligence and efforts to meet the obligation concerned. One could argue that this standard is too high to place on OCSSPs. 

The guidance issued by the Commission on what is meant by "best efforts" makes one thing clear and that is that there will be significant litigation around the meaning of this phrase and undoubtedly appeals to higher Courts. The EU directive simply leaves too much room for interpretation to actually achieve harmonisation of digital copyright law in the EU. The imposition of liability should bring with it legal certainty and prescriptiveness as regards the test to be applied in the legislation, not in guidance around it.

 

Co-authored by: Ann Henry, Sari van Grondelle