For years, a great number of music videos generally available on YouTube have been blocked in Germany. The standard message Internet users could read was “This video is not available in Germany“. Those days belong to the past since earlier this week, as a long-lasting dispute between the German collecting society GEMA and YouTube has been settled by way of an amicable agreement. YouTube agreed to pay a reasonable license fee on a voluntary basis so that an ever-disputed question ceased its relevance; whether there is actually a legally relevant act of making a copyright work available, that can be attribute to the platform provider.

Legal Background

In general, it is the rightholder’s prerogative to authorise or prohibit the reproduction, distribution and the communication to the public of his work by any means and in any form, in whole or in part. Those who want to make such use of the work need to obtain a license. In some cases, statutory exceptions allow for such use without an individual license being obtained from the rightholder. However, such exceptions most often come with the obligation to pay a certain copyright levy to a collecting agency. This revenue is then shared amongst the rightholders.

However, with regard to online platforms it always has been the controversial question whether they actually make works available to the public in the sense of Art. 3 of the InfoSoc Directive 2001/29 or whether it is the Internet user who uploads the content. In the latter case, the service provider would only be liable under the principles of the so-called “Störerhaftung” but not for having made own use of the content. This was also the outcome of a lawsuit GEMA initiated against YouTube before the courts in Hamburg (see Judgments of the Higher Regional Court of Hamburg dated 1. July 2015, Case Refs. 5 U 87/12 and 5 U 175/10)

In a recent decision, the Higher Regional Court of Munich was called to decide on this question (see Judgment of 28 January 2016 – Case Ref.: 29 U 2798/15). According to the judges, a copyright protected work is made available to the public if (1) a person uploads it to a platform and (2) if the work automatically becomes accessible for the public. Already this uploading constitutes the relevant action under copyright law. Thus, it is not the platform provider who is in charge. The platform only stores the work for users as a result of the prior making available to the public performed by the “uploader”.

The Agreement

Despite this most recent decision, YouTube and GEMA continued their joint endeavors to find an amicable solution beyond the cited cases before the courts in Hamburg and Munich.

On 1 November 2016, the parties eventually reached an agreement on a voluntary contractual payment made by YouTube (see press releases by YouTube and GEMA). The details – in particular the calculation and the amount of remuneration – have been kept confidential.

Comment

No question, the settlement is good for German Internet users. They now can access their favorite music videos, which was not possible for quite some time. The agreement is also good for GEMA and YouTube given that they can now turn back to their core business without finding themselves in ever new court proceedings consuming time and money. However, is the settlement good for the overall legal certainty? This is a fair question to ask. Please note that YouTube never refused to pay any levy at all. The company looks to agreements with collecting agencies in over 140 countries. However, it refuses to accept legal liability for having made own use of the uploaded works under the existing law (as confirmed by the courts in Hamburg and Munich).

Dr. Harald Heker, CEO of GEMA, hastened to mention that “despite the conclusion of this agreement, the challenge remains for the politicians to create a clear legal framework“. What is true in this respect is the fact that there are differing views on what the legal obligations of platform providers should be. Still, the current settlement between YouTube and GEMA shows that contractual agreements are a prudent way of overcoming legal uncertainty.

As regards the endeavors of the European Commission to create a fair marketplace for all stakeholders, please be referred to our blog feeds on the Commission’s digital single market strategy (DSM Watch) and particularly the draft copyright directive as published on 14 September 2016.