MEDIASET vs. DAILYMOTION The ruling of the Court of Rome, JULY 12, 2019

The Facts

RTI videos involved in the case have been uploaded on the French platform by private users since 2006 and in some cases have remained online until 2013.

Once the presence of unauthorised videos had been verified, RTI sent several preliminary warnings to the French video-sharing platform as early as 2010. In the course of the proceedings, which began in 2012 and ended in 2019, 995 illicitly published videos were included in the subject-matter of the case.

According to the sentence no. 14757/2019 of 12.7.2019, the Civil Court of Rome ordered Dailymotion SA (a company of the French group Vivendi) to pay compensation of over 5.5 million euros to RTI (a Mediaset Group company).

On 15 July 2019 the Court of Rome accepted the claims raised by RTI against Dailymotion and ruled the following:

• Orders Dailymotion to compensate RTI with euro 5.521.420,00 plus interest and inflation adjustment, for the economic damages.
• Sets the fix sum of euro 5.000,00 to be paid by Dailymotion, for each additional violation.
• Orders the publication of the ruling on the printed editions of “Il Sole 24 Ore”, “Il Corriere della Sera”and “Il Giornale”, and on the homepage of the Dailymotion platform.
• Orders Dailymotion to compensate RTI with euro 95.500,00 for the legal costs.

The principles outlined in the ruling are the following:

The active nature of the provider “Dailymotion”

As the active hosting provider falls outside the categories provided in EU Law and Italian Copyright Law, it can’t invoke the liability exemption regime provided in both legislations. Such reasoning derives from a careful analysis of Article 42 E-Commerce Directive (ECD).

A hosting provider can carry out both passive and active functions, according to the subject with whom it is confronted. It can also play these two functions simultaneously: profiling and adapting some content while neutrally storing other content. Therefore, the verification of the active/passive nature of a provider doesn’t have to be focused on its legal entity.

The Court considers that an internet service provider (ISP) loses the special regime provided in Article 14 ECD when it moves away from a neutral and passive role; intervening on the data in order to exploit the content uploaded by the users and memorized on its servers, controlling and profiling the data in a non-automated manner.

These principles are clearly outlined in the following CJEU rulings: (i) CJEU ruling of 7.8.2018, C-521/17 on Case SNB-REACT; (ii) CJEU ruling C-324/09,  on Case L’Oréal  c.  eBay;(iii) CJEU ruling C-610/15 on Case Stichting c. Ziggo BV;(iv) CJEU ruling of 23.03.2010, on Case C-236/08 Google vs. Louis Vuitton. Similar conclusions were reached by Italy’s Supreme Court of Cassation in the recent ruling n.7708 issued on 19 March 2019.

The factual elements examined by the Court

Also the organization, storage and preventive cataloguing via cookies can be considered as a manipulative element leading to an absence of neutrality. At least in so far as the provision of cookies, set to a specific result by computer technicians (for instance for the provision of targeted advertising) and cataloguing of content, are considered. The cataloguing may be automatic but for sure not neutral, as in the meaning of the ECD and of the Courts’ interpretations.

The AV content kept on the platform by Dailymotion, despite the specific removal requests made by RTI, consisted in RTI’s most successful programmes and therefore most attractive for internet users (potentially leading to increased advertising revenues).

The storage of the content based on specific indexes that are linked to a specific category and to additional advertising revenues are a sign that the company is clearly involved in its management. The adjustment and profiling carried out ex-ante, even if only via cookies, doesn’t exclude a preliminary design aimed at managing/manipulating the uploaded material. Cookie profiling is, in fact, carried out with human intervention according to specific schemes.

Given its complex business activity and its controlling mechanisms, Dailymotion couldn’t ignore the presence on its platforms of, at least, 995 copyright protected videos of successful RTI programmes. It is established that the knowledge of the illegal content uploaded, acquired in whatever way, makes the liability limitation of Article 14 ECD inapplicable.

There are grounds for wondering why explicitly illegal content is preventively checked and blocked by the platform, while copyright illegal content isn’t.

Burden of proof

It was up to Dailymotion to prove its business structure and organization were entitled to the privileges provided in Article 14 ECD and in Article 16 Italian Copyright Law. The burden of proof was on the defendant and not on the complainant, as only the defendant can demonstrate how its platform works in practice and which means are used to manage and store the video files (also in light of the traceability and proximity principles).

Estimation of the damage

The reasoning raised by Dailymotion according to which there could be a revenue sharing between the two companies hasn’t been retained by the Court, as RTI’s commercial strength could have imposed much more favorable conditions than the ones offered by Dailymotion to its users. In addition, negotiations could have also led to no agreement between the two.

It appears in any case not logic to link the damages of RTI to the benefits of Dailymotion, as the copyright content could have been used in an inefficient manner by the latter, significantly reducing the revenues deriving from it.

In defining the damage the Court applied a fairness criteria based on the price per minute of the infringing content and  established 700 euros per minute as a fix amount of damage for each of the 995 videos uploaded on the platform. Also, the Court considered the calculation of the minutage to start from when the video was uploaded on the platform and not from when Dailymotion received a notice from RTI.

Once a company explicitly requires a passive host to remove from its portal the content, specifying the titles of the programmes and some of the characterizing data, is has allowed the host to easily remove the copyright protected material.

No need to inform the provider with specific URLs

The actual knowledge of the infringing content can’t in whatsoever way be linked to the specification of the relevant URLs. The Court states that a specific indication of the infringing files (videos, programmes) is enough.