10 Feb The intersection between the new Digital Services Act and Copyright Directive No. 790/2019 with regard to the liability of hosting providers

Authors: Carmine Perri, Francesca Tugnoli

 

Background 

Following a lengthy legislative process, Regulation (EU) No. 2022/2065, also known as the Digital Services Act (hereinafter, ‘DSA’) entered into force on 16 November 2022[1]. The Act introduces new rules in the single market for digital services. This piece of legislation seeks to amend Directive No. 2000/31/EC (hereinafter, “e-Commerce Directive”) which still remains in force as set out in Art. 2(3) of the DSA[2]. This is because both the DSA and the Digital Markets Act (hereinafter, the ‘DMA’)[3] seek to lay down new rules on the functioning of the internal market for intermediary services (so-called ‘providers’)[4] by establishing harmonized standards for a secure online environment and for the protection of EU citizens[5].

Notably, the European legislator intended to counter the misuse of technologies mainly caused by the online circulation of illegal and/or copyright-infringing contents through providers’ platforms through the DSA[6]. This is because some providers enable users to quickly share and disseminate digital contents of different forms on the web.

However, it should be emphasized that the provisions of the DSA are not the only applicable laws in this context and, therefore, with regard to online copyright protection, the relationship between the DSA and the Copyright Directive No. 790/2019 requires further analysis.

 

Relationship between DSA and EU copyright law

The different liability regime for online platforms in the DSA and in Copyright Directive No. 790/2019

As anticipated, one of the major objectives of the DSA is to curb the proliferation of illegal contents on the web[7] on the assumption that what is illegal offline should also be considered illegal online[8]. In fact, activities such as the use, reproduction, or dissemination of a copyrighted work (or a part of it), whether online or offline, without the prior authorization of the rights holder must be considered unlawful. For this reason, service providers that allow users to share such contents online are subject to a specific liability regime standardized at European level.

It is thus important to assess the impact of the DSA on the scope of liability of online service providers with respect to the sharing of such copyright infringing contents. This is particularly with regard to the liability of hosting service providers and, above all, of online platforms that constitute a sub-category of the former[9].

One of the most interesting aspects of the DSA is the provision of a liability regime in relation to illegal contents provided by the recipients of the service, which varies for providers according to the type of service they provide. In fact, DSA provides for a distinction between ‘mere conduit’, ‘caching’ and ‘hosting services’ (Arts. 4-6 of the DSA)[10]. It also sets stricter requirements for very large online platforms (hereinafter, ‘VLOPs’) and search engines (i.e., those with more than 45 million monthly users and upwards as provided for in Art. 33(4) of the DSA). The stricter measures apply with respect to the analysis and assessment of systemic risks arising from the design or operation of their services, as well as with respect to the adoption of risk assessment and mitigation measures.

In this regard, it should be noted that there is a significant difference of approach between the DSA and Directive No. 790/2019 on copyright and related rights in the single digital market (hereinafter, the ‘Directive’)[11]. In fact, Art. 17(1) of the Directive provides for a regime of direct liability in case the provider of online content-sharing services communicates to the public or otherwise grants the public access to copyrighted works or other protected material uploaded by its users. Therefore, according to the provisions of the Directive, a provider of online content sharing services will have to obtain prior authorization from the rights holders[12] (e.g., through a license agreement) before communicating or making copyrighted material or other works available to the public.

If no authorization is granted, online content-sharing service providers shall be held liable for unauthorized acts of communication of copyrighted works and other subject matter to the public, including making them available to the public. According to Art. 17 (4) of the Directive service providers must thus demonstrate that they have:

1. 1. 1. made best efforts to obtain prior authorization from rights holders;
      2. made best efforts in accordance with high industry standards of professional diligence, to ensure that specific works and other subject matters for which they have received the relevant and necessary information from right holders are not available; and
      3. acted promptly, after receiving a sufficiently reasoned notice from the rights holders, to disable access to, or remove from their websites, the works or other subject matters referred to in the notice and made best efforts to prevent their uploading in the future in accordance with point (2).

A less rigid approach is however provided in Chapter II of the DSA as it lays down provisions on the exemption of liability of service providers in the digital sector. It provides for, among other things, the conditions under which service providers qualifying as ‘hosting’ services under Art. 6 should be considered exempt from liability for the transmission and storage of information belonging to third parties. In fact, Art. 6 provides that in the context of the provision of an information society service consisting of the storage of information provided by a user, the provider of that service should not be held liable for the information stored upon a user’s request, provided that the provider:

1. 1. 1. does not have actual knowledge of illegal activities or contents related to such works as well as is not aware of any facts or circumstances that may determine the unlawfulness of such activities or contents; or
      2. if the provider becomes aware of the illegal nature of such activities or contents, acts immediately in order to remove the illegal contents or disable any access to them.

To sum up, a different approach is set out with respect to the scope of liability of the providers of online content-sharing services. In fact, on one hand, Art. 17 of the Directive provides for a direct liability regime for content-sharing service providers. This means that they will always be held liable for copyright infringing contents shared by their users in the event the provider has not obtained a license prior to the use of such works or contents (pursuant to Art. 17(1) of the Directive) or if the provider has not demonstrated a proactive approach in respect of the filtering of such illegal contents online (pursuant to Art. 17(4) of the Directive).

On the other hand, the DSA adopts an opposite approach, considering that service providers are generally exempt from liability except in the cases provided under Art. 6.

However, it should be noted that this different approach on the determination of the liability of service providers does not preclude the full integration of the two pieces of legislation, as discussed below with respect to the matter of Notice and action mechanisms to report copyright infringing contents shared by users.

 

Notice and action mechanisms to report of copyright infringing content 

It is worth noting that, pursuant to Art. 2(4), the DSA does not affect EU laws on copyright and related rights and thus the DSA complements and does not replace the sector-specific legislation (i.e., the Directive). It should therefore be considered that the DSA constitutes a general framework for a number of regulations adopted in recent years[13], thus applying to the extent that EU laws do not contain more specific applicable legal provisions. In particular, in order to determine the liability of online platforms in cases of sharing of copyright infringing content by the users of the platforms, there will be no antinomy between the DSA and the Directive as the piece of legislation which sets the most specific provisions with respect to the applicability of the rules on the liability of online service providers should be applied. The DSA, therefore, should be seen as complementary to existing sector-specific legislation, as it does not affect the application of other EU laws such as the Directive that regulates certain aspects of the provision of information society services and applies as ‘lex specialis’[14]. Specifically, the DSA will remedy some shortcomings of the Directive[15]. For example, it clarifies the concept of a ‘sufficiently precise and adequately substantiated notice’ (hereinafter, the ‘Notice’) which needs to be submitted to the service provider by the copyright holders to request the removal of their works pursuant to Art. 17(4) of the Directive in cases where the published contents infringe their rights set forth by the Directive.

Considering that the Directive does not define the scope of such Notice, the criteria set forth in Art. 16 of the DSA should be considered applicable as it provides precise standard references to allow and facilitate the submission of the Notice which should consist of:

1. 1. 1. a sufficiently substantiated explanation of the reasons why the individual or entity alleges the information in question to be illegal content;
      2. a clear indication of the exact electronic location of that information, such as the exact URL or URLs, and, where necessary, additional information enabling the identification of the illegal content adapted to the type of content and to the specific type of hosting service;
      3. the name and email address of the individual or entity submitting the notice, except in the case of information considered to involve one of the offences referred to in Art. 3 to 7 of Directive 2011/93/EU; and
      4. a statement confirming the bona fide belief of the individual or entity submitting the notice that the information and allegations contained therein are accurate and complete.

Consequently, a Notice that does not meet these requirements will not be taken into account.

If the intention of the European legislator is to therefore provide clarifications and support with the said piece of regulation, there is a real risk that this will result in a possible lack of protection, insofar only a Notice with these requirements will be taken into account.

 

Conclusions

Despite the complexity of the regulatory framework regarding the protection of copyright online, it should be noted that the DSA, while not introducing a specific regulation of this sector, combines well with the framework established by Directive No. 790/2019, potentially enriching and detailing it.

The entry into force of the DSA must therefore be considered of utmost importance for the future of online copyright in the EU[16]. Indeed, Europe needs an increasingly harmonized copyright regime that stimulates creation and investment in this sector and equally enables the transmission of products and their access across national boundaries, profiting from the rich cultural diversity of the continent[17].

 

 

 

 

 

[1] REGULATION (EU) 2022/2065 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 19 October 2022 on a Single Market For Digital Services and amending Directive 2000/31/EC (Digital Services Act) https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32022R2065&qid=1666857835014.

[2] DIRECTIVE 2000/31/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce) https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32000L0031&from=EN.

[3] REGULATION (EU) 2022/1925 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 14 September 2022 on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828 (Digital Markets Act) https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022R1925&from=EN.

[4] See Recital 5 of the REGULATION (EU) 2022/2065 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 19 October 2022: “(…) this Regulation should apply to providers of certain information society services as defined in Directive (EU) 2015/1535 of the European Parliament and of the Council, that is, any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient”.

[5] See Recital 3 of the REGULATION (EU) 2022/2065 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 19 October 2022: “Responsible and diligent behaviour by providers of intermediary services is essential for a safe, predictable and trustworthy online environment and for allowing Union citizens and other persons to exercise their fundamental rights guaranteed in the Charter of Fundamental Rights of the European Union (the ‘Charter’), in particular the freedom of expression and of information, the freedom to conduct a business, the right to non-discrimination and the attainment of a high level of consumer protection”.

[6] See Article 3(h) of the REGULATION (EU) 2022/2065 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 19 October 2022 on the definition of “illegal content”, which should be interpreted as “any information that, in itself or in relation to an activity, including the sale of products or the provision of services, is not in compliance with Union law or the law of any Member State which is in compliance with Union law, irrespective of the precise subject matter or nature of that law”.

[7] Frosio G., Geiger C., “Taking Fundamental Rights Seriously in the Digital Services Act’s Platform Liability Regime”, in European Law Journal (soon to be published), SSRN, 22/05/2021- 6/09/2022.

[8] See Recital 12 of the REGULATION (EU) 2022/2065 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 19 October 2022: “In order to achieve the objective of ensuring a safe, predictable and trustworthy online environment, for the purpose of this Regulation the concept of ‘illegal content’ should broadly reflect the existing rules in the offline environment (…)”.

[9] See Recital 13 of the REGULATION (EU) 2022/2065 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 19 October 2022: “(…) Online platforms, such as social networks or online platforms allowing consumers to conclude distance contracts with traders, should be defined as providers of hosting services that not only store information provided by the recipients of the service at their request, but that also disseminate that information to the public at the request of the recipients of the service (…)”.

[10] See Recital 5 of the REGULATION (EU) 2022/2065 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 19 October 2022 on the definition of “information society services” known as ‘mere conduit’, ‘caching’ and ‘hosting’ services: “This Regulation should apply to providers of certain information society services as defined in Directive (EU) 2015/1535 of the European Parliament and of the Council (5), that is, any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient. Specifically, this Regulation should apply to providers of intermediary services, and in particular intermediary services consisting of services known as ‘mere conduit’, ‘caching’ and ‘hosting’ services, given that the exponential growth of the use made of those services, mainly for legitimate and socially beneficial purposes of all kinds, has also increased their role in the intermediation and spread of unlawful or otherwise harmful information and activities”.

[11] DIRECTIVE (EU) 2019/790 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 17 April 2019 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC https://eur-lex.europa.eu/legal-content/IT/TXT/?uri=CELEX%3A32019L0790.

[12] See Article 3 paragraphs (1) and (2) of the DIRECTIVE 2001/29/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 22 May 2001 on the harmonization of certain aspects of copyright and related rights in the information society https://eur-lex.europa.eu/legal-content/IT/ALL/?uri=CELEX%3A32001L0029.

[13] De Gregorio G., Pollicino O., “L’alba di nuove responsabilità sulle piattaforme digitali: il Digital Services Act”, in Agenda Digitale, 15/12/2020.

[14] Quintais J.P., Schwemer S.F., “The Interplay between the Digital Services Act and Sector Regulation: How Special Is Copyright?”, European Journal of Risk Regulation (2022), 1–31, 10/03/2022.

[15] Senftleben M., “Points of contact between the DSA and Article 17 DSMD”, IFIM University of Stockholm, Webinar on “Shaping the Digital Services Act: What impact on intellectual property?” 30/03/2022.

[16] Peukert, A., Husovec, M., Kretschmer, M. et al. European Copyright Society, “European Copyright Society – Comment on Copyright and the Digital Services Act Proposal”, IIC 53, 358–376 (2022) https://doi.org/10.1007/s40319-022-01154-1.

[17] Perri C.A., “La proposta di direttiva delle Commissione Europea in materia di copyright”, in Cyberlaws, 2/05/2018.