What Does EU’s New Copyright Law Mean for Online Service Providers?

A new copyright directive approved by the European Union on February 13 might
fundamentally change the landscape for online service providers (OSPs). While
the bill still awaits confirmation from European Parliament, once formally
approved, it will compel OSPs to either obtain licenses or affirmatively screen
for uploads of copyrighted materials.

Article 11 and Article 13 are the most controversial provisions in the
new directive. According to the final text (compiled by Member of the European
Parliament Julia Reda, Article
11, Article
13), Article 11 will require OSPs to get a license from news
publishers for even snippets of news, and Article 13 will make content sharing
platforms accountable for unlicensed uploads made by users.

Implications for Article 11 seems to be more clear-cut. OSPs would
choose to limit their display to headlines of news, obtain a license, or more
dramatically like Google suggests, shut
down news service completely.

Article 13 poses a more complicated question as it challenges the safe
harbors that are currently provided to OSPs against direct and indirect
liabilities under EU’s Electronic Commerce Directive 2000 (E-Commerce
Directive). Following the United States’ innovative exemption established
through the DMCA,
the EU adopted similar provisions.
Article 12 to Article 15 of the E-Commerce Directive provides OSPs
with exemptions regarding transmitting, caching, hosting and obligations to
monitor. The burden is on the copyright holder to detect and enforce their
rights.

Now pursuant to Article 13, the burden is shifted to OSPs.  If OSPs do not obtain licenses from copyright
holders, they will be liable for the infringing uploads unless they have made
“best efforts,” (Article 13, §4(b)) which can be interpreted as requiring OSPs
to adopt effective measures to filter infringing material. If OSPs obtain
licenses, such licenses will also cover acts carried out by users (Article 13,
§2).

Adopting an effective screening technology seems a viable alternative at
least for big OSPs, especially given that YouTube, a name condemned often by
musicians in support of the new law, already has in place a system called Content ID.
Content ID is now available to major artists
to facilitate the identification of infringing materials, it is still the duty
of the artists to report and enforce their rights.

However, criticism, review, parody and other fair uses carved out from
the new law complicates the issue. This is especially true in the case of
parody, where literal copying or substantial similarities abound so that
audience can relate to the original work, as it is inherently required by the
nature of parody. Line-drawing can be difficult as the context of creation rather
than the work itself needs to be analyzed for determination. Not only is it
questionable if technology like Content ID is already capable of such a task
(Content ID now instructs
the copyright holder to review for fair use), but whether to entrust at all the
decision to machines, or fundamentally OSPs, is debatable.

OSPs are obligated under Article 13 to provide an “effective and
expeditious complaint and redress mechanism available to users” (Article 13, §8).
If OSPs choose to err on the side of caution for fear of infringement suits by
copyright holders, they will effectively have to censor uploads based on a
stricter fair use doctrine. If the censorship does not chill creations, OSPs
will have to devote considerable time and effort to resolving disputes with
uploaders.

The complications of filter application might incentivize licensing as a
solution, which provides more certainties for OSPs and reduces friction with
users especially for websites whose business models rely on content sharing. The
new copyright law seems to nudge OSPs in the intended direction of growing the
licensing market (Article 13, §9 (37)), but a lot of questions still remain as
to how such licensing will work in practice. Do OSPs have to proactively
license all copyrighted works in the world? In a fair use case, can OSPs
unilaterally take down content when they decide the revenue produced does not
compensate for the licensing fee? What do OSPs do with the content when a licensing
negotiation is stuck, and how does it affect a user’s right to effective
redress mechanisms?

The adoptions of DMCA, E-Commerce Directive and the like are out of
concerns of overburdening OSPs. It appears reasonable to shift the burden back
to OSPs to police infringing activities once they have the ability to
supervise, otherwise, they unfairly benefit at the expense of artists. We need
more information to decide if the burden-shifting is pre-mature. If the new law
is to be formally adopted, many important practical questions would have to be
addressed first.

Enid Qin is a JD candidate, 2020, at NYU School of Law.