Transfer of Value – How Article 17 levels the playing field

Correcting the Transfer of Value was the main focus of the creator community in the recent copyright reforms. More than 50 000 creators signed the petition asking to fix this problem and many of them visited Brussels and Strasbourg to tell their story directly to their representatives in the European Parliament. With the adoption of the new Copyright Directive, creators are now content that a balanced and fair solution will be provided whereby:

• Creators have clear legal basis to ask that platforms get a licence for the use of their works
• Consumers are better off, because they are now legally covered when they upload content, and provided with legal guarantees against arbitrary removal practices of the platforms and safeguards to protect their fundamental rights
• Legitimate online services and European start-ups will benefit from a more level playing field that isn’t so heavily distorted by tech giants

Article 17, which directly addresses Transfer of Value, proved one of the most hotly debated aspects of the Copyright Directive. So much so that we partnered with Europe for Creators to create a website that dispels the myths surrounding the Article and provides a clear and comprehensive break down of each of its paragraphs.

See the links below for more background info and the economic and legal basis of the directive.

• • • Cultural content in the Online Environment: Analyzing the Value Transfer in Europe, Roland Berger, 2015 here

• • • The brochure and infographic made based on this study here

• • • Economic analysis of safe harbour provisions, Dr. Stan J. Liebowitz, 2018, study carried out by CISAC, available here.

• • • ALAI communicates its opinion on Article 13 of the proposal for a Directive on copyright in the Digital Single Market as adopted by the trialogue. See document (EN | ES)

• • • ALAI communicates its opinion in respect of some questions for preliminary ruling by the CJEU in case C-682/18 (YouTube). See document

• • • European Data Protection Supervisor comments on the proposal for a Directive on copyright. See here

• • • ALAI further reflections on the value gap, addressing Member State questions on Article 13 of the Copyright Directive proposal here and here

• • • ALAI Opinion on the Copyright Directive proposal provisions on transfer of value  available here

• • • An article by Prof Silke von Lewinski in the Kluwer Blog available here

• • • Legal Analysis by Prof Agnes Lucas Schloetter available here

• • • Paper by Dr Eleonora Rosati analysing the CJEU decision in the Pirate Bay case, available here

• • • A blogpost by Dr Eleonora Rosati: “The value gap proposal in the JURI Committee Report as a consolidation of the existing framework (not the end of the internet)”, available here

• • • Report by the French academic Prof. Pierre Sirinelli on the communication to the public right, prepared for the French Ministry of Culture’s CSPLA (available in French and English)

• • • During the Academic Round Table event in November 2017, Prof. Antoon Quaedvlieg prepared the following presentation as well as a memo (in Dutch) written for the Dutch Copyright Committee here

• • • A report by Prof. Matthias Leistner titled “Is the CJEU outperforming the Commission?” which looks at CJEU case law and the Commission’s proposal regarding ToV which you can read here

• • • A study by Prof. Udo Di Fabio, former judge at the Federal Constitutional Court in Germany, entitled “Urheberrecht und Kunstfreiheit unter digitalen Verwertungsbedingungen“ (“Copyright and Freedom of the Arts under Digital Market Conditions”). This study looks at copyright from a constitutional point of view. The book version can be bought here.

• • • The Kluwer Copyright Blogpost by Prof. Dr. Jan Bernd Nordemann that counters the argument that the ‘preventive measures’ (i.e. content recognition) mentioned under article 13 are something new and would kill the internet.

This section features information from GESAC’s old website and is all pre-Copyright Directive adoption analysis.

Clarifying Safe Harbour Provision Applicability

The proposed Copyright Directive and the version proposed by Rapporteur Voss and the Council set out to provide a much-needed interpretation of the current acquis, as it should apply to the copyright relevant acts of Online Content Sharing Service Providers (OCSSP). Because this issue has proven to be unclear to national courts*, and cases across Europe have had varying and contradicting outcomes, the new law sets out to straighten the record on the matter.

Rapporteur Voss’ proposals, for example, do this by clarifying that OCSSP communicate to the public and by providing clear standards with which to evaluate the “active role” of OCSSPs to disqualify them from safe harbour provisions under Article 14 of the 2000/31/EC E-Commerce Directive (ECD) in line with CJEU rulings.

The Commission clarifies that the ECD safe harbour provisions do not apply to UUC services that play an active role

These services are deemed to play an active role when for instance they promote or optimise the presentation of copyright protected works made available by the platform, regardless of the means used. Indeed, today’s main access routes to creative content, such as YouTube, SoundCloud or Vimeo, in many instances argue that they are not involved in any way in the provision of content on their platform because it is done by the algorithms that they have created.

• For a further in-depth analysis of relevant CJEU cases and of the compatibility with the acquis communautaire, read more here.

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*For instance, in the GEMA vs YouTube cases the German court said there was no act of communication to the public by the service, yet due to YouTube’s current situation in the market where it competed with services like Spotify, it had to have an effective stay-down obligation. Italian courts in cases against RTI and Break Media also asked for strict stay-down measures. In France, the courts in cases against Dailymotion considered the service a hosting provider subject to notice and take down only; although in some of the cases they considered the relevance of communication to the public by the service and full liability in some others (e.g. Google Videos). In the UK, the courts that decided on some of the website blocking cases against user-uploaded content websites established that the concerned services undertake a communication to the public and could not benefit from safe harbour.

Specific Monitoring Obligation

A lot has been said about Article 13 since the European Commission published its Copyright Directive proposal. However, much of this is based on fear mongering and false interpretations of the existing texts provided by the European Commission, the European Parliament and the Council. Moreover, considering that all three institutions take similar lines on this issue, based on their legal analysis, debates and legal service opinions, the credibility of such fear-mongering by organisations funded by the concerned platform services seems to be questionable, at the very least.

What is required by Online Content Sharing Service Providers (OCSSP) is “cooperation”, which already applied to their competitors on the digital market that operate on a legitimate basis

Cooperation will enable an effective and targeted monitoring of the uses of the protected content, which in turn will enable an accurate distribution of remuneration to authors and rights holders. Additionally, these services are obliged to cooperate on measures to prevent works from appearing on their platform, should they not want an agreement with the rights holder.

Licensing is always the preferred option for authors’ societies

The obligation to cooperate gives better possibilities to keep content available while ensuring appropriate remuneration for creators. Authors’ societies are keen to make more works available. Since they represent up to 30 million works and counting, trying to block them is neither a realistic nor a desired option.

Monitoring will happen based on what rights holders provide

Article 13 of the Copyright Directive proposals only require matching the data that is provided by the rights holders against the data uploaded on its platform. That excludes random or total filtering and instead enables very focused content recognition tools that enable the legitimate use of works on the platform by leading to less unlawful blocking.

Previous court rulings addressed outdated and inappropriate methods

The European Court of Justice (CJEU) in its previous cases (i.e. Netlog ruling) noted that the technologies required to check all data uploaded by its users, and then to find out if any of it was unlawful, and then block relevant users, would potentially impact freedom of expression, since such a system could involve the risk of also blocking data that was lawful: the service (Netlog) was alone in executing this task and finding the rights status and facts regarding all content on its platform.

Such a system bears no comparison with modern content recognition systems of the kind contemplated by Article 13 (and already in use by some service providers). Indeed, Article 13 of the Copyright Directive proposal only requires matching the data that is provided by the rights holder against the data uploaded on its platform. Since the data will be provided by the rights holder, the service does not need to find facts regarding the status of the content on copyright matters, and it will be a targeted use as the service will only need to match the relevant data.

Since cooperation plays a key role, and licensing enables the legal existence of the content on the platform, any remaining risk of harming the freedom of expression is also eliminated. If content is in fact removed unrightfully, appropriate and functional redress mechanisms are provided for. This is an essential safeguard for consumers vis-à-vis platforms that tend to block more content than they should, just to avoid any potential legal action, with complete disregard for their consumer’s freedom of expression. It is also to be noted that consumers today have no legal recourse against platforms regarding the wrongful removal undertaken by platforms.

• For a further in-depth analysis of relevant CJEU cases and of the compatibility with the acquis communautaire, read more here.