The European Parliament, Council and Commission have reached a compromise on the text of the new Copyright Directive (previously discussed here). The proposed Directive targets digital use of press publications by information society service providers, such as news aggregators and media monitoring services. As discussed below, the two most controversial provisions are Articles 11 and 13, known respectively as the “link tax” and “upload filtering” provisions. The Commission has issued a press release, but not an official copy, of the compromise text.

Articles 11: Link Tax – What was agreed?

Article 11 is a new press publisher’s right. It requires service providers to pay a copyright royalty to press publishers, including journalists, for digital use of their news articles, for a period of 2 years after publication of the press publication. Despite being known as the “link tax” provision, Article 11 provides that hyperlinking or re-using individual words or very short extracts of press publications (i.e. snippets of articles) will be excluded from the new right granted to press publishers. This means that service providers should be able to continue use such parts of a press publication, without requiring authorisation. However, it remains to be seen how the courts will construe “very short extracts”. The Commission has merely stated “when assessing what very short extracts are, the impact on the effectiveness of the new right will be taken into account”. It is likely that service providers will face some uncertainty in their compliance efforts until further guidance is provided by the courts and/or the Commission. In the meantime, in order to mitigate the risk of copyright infringement, service providers may face the choice of paying press publishers for a licence to ensure any snippets are authorised, or stop using snippets, which would inevitably have a detrimental impact on internet users, who would see links to news stories, without any headlines or summaries of stories. The new press publishers’ right will not apply to individual users’ private or non-commercial use of press publications, with the result that internet users can continue to share content on social media and link to websites and newspapers.

Article 13: Upload Filtering – What was agreed?

Article 13 requires a service provider that stores large amounts of copyright protected works uploaded by users, which it promotes for profit-making purposes, to reach licensing agreements with rightholders for use of their works. A service provider will not be able to benefit from the ‘hosting’ liability exemption, in Article 14 of the e-Commerce Directive 2000/31/EC, where it hosts copyright-infringing material on its platform.

If authorisation from rightholders is not obtained, a service provider will be liable for any infringing content on its platform, unless it can demonstrate it has taken the following steps:

  1. made “best efforts” to obtain authorisation from rightholders;
  2. made, “in accordance with high industry standards of professional diligence”, best efforts to ensure the unavailability of copyright protected works and other subject matter which have been identified to them by rightholders, and
  3. acted expeditiously, upon notification by the rightholder, to remove unauthorised content, and made best efforts to prevent their future uploads.

It remains to be seen how the courts will interpret “best efforts“, and the extent to which service providers will have to police their sites. Whilst the compromise text provides that the application of Article 13 shall not lead to any general monitoring obligation, it is clear that if a court finds a service provider’s efforts to prevent copyright infringement are not strong enough, that service provider will be directly liable for infringements, as if it had committed them itself. Thus it seems likely that service providers will have no choice but to implement some form of content filtering technology which will be a costly exercise. The compromise text indicates that the Commission shall, in consultation with service providers, rightholders and relevant stakeholders, issue guidance on the application of Article 13, which will hopefully provide further clarity to service providers on the precise scope of their new obligations.

New smaller service providers will be subject to a lighter regime in cases where no authorisation has been granted by rightholders. This concerns service providers who have been active for less than three years, have an annual turnover below €10 million, and a website with less than 5 million monthly visitors. In order to avoid liability for unauthorised works, these new small service providers will only have to prove that they have made their best efforts to obtain an authorisation, and that they have acted expeditiously to remove the unauthorised works notified by rightholders from their platform. However, where the average monthly visitors exceeds 5 million, these new service providers shall have to also demonstrate that they made their best efforts to prevent further uploads of copyright-protected works notified by rightholders.

In addition, Article 13 will not apply to providers of services such as not-for-profit online encyclopedias, not-for-profit educational and scientific repositories; open source software development platforms; electronic communication service providers as defined in Directive 2018/1972; online marketplaces, and cloud storage services.

Next Steps

The compromise text must next receive final approval by the European Council and Parliament, which is expected by March or April 2019. In the meantime lobbying is set to continue. Once the Directive is approved, it will be published in the Official Journal, and Member States will then have 24 months to transpose the new rules into their national legislation.