July 29, 2020 - European Union

Determining Liability For Illegal Uploads to Online Platforms: An ECJ Opinion Decides in Favour of Platform Operators

Online platform operators have a rare cause to be cautiously optimistic at news from the European court. In a recently-published European Court of Justice (ECJ) opinion, Advocate General Henrik Saugmandsgaard Øe stated that, under the current EU legal regime, operators should not be directly liable for the illegal uploading of protected works by platform users. This addresses a recurrent issue over the last few years, whereby platform operators have repeatedly argued that they cannot be held responsible for the activities of platform users.

Background

The Federal Court of Justice in Germany originally referred questions to the ECJ in relation to cases involving a music producer who initiated proceedings when recordings, to which he asserted rights, were uploaded to YouTube without his consent; similarly, a second case in which a claimant sued when materials, to which it held exclusive rights, were uploaded without its consent by platform users to an online file-hosting and sharing platform.

The Advocate General’s opinion on the current legal regime

The Advocate General took the view that, where a platform user infringes the exclusive rights of a creator by uploading protected works, the platform operator should not be held directly liable. His rationale covered the following points:

  • Platform operators provide an intermediary service that enables users to carry out a “communication to the public”. Platform operators do not usually carry out such acts themselves. Consequently, any liability arising from such communication should rest with the users uploading such content.
  • Once a platform user initiates an upload, the upload itself is an automatic process—i.e., the platform operator does not actively select or determine whether the content should be uploaded.
  • The liability of persons facilitating a third party’s illegal “communication to the public” (i.e., secondary liability) is governed by the national law of each Member State, not by the Copyright Directive (2001/29/EC).
  • An exemption under the E-commerce Directive (2000/31/EC) may apply to platform operators where they do not play an “active role” that provides them with “knowledge of, or control over” the information, when storing files on the request of platform users. This exemption does not apply where platform operators have knowledge of the illegal activity or information and do not remove or disable access to the content promptly. Therefore, once platform operators are put on notice about infringing activity, they should take steps to rectify the problem and not stay passive.
  • Rights holders of protected works may obtain injunctions against online platforms, without needing to show improper conduct by the platform operator.

The Advocate General’s opinion is, however, not binding on the ECJ (although such opinions are very frequently followed) and a formal ECJ judgment will be delivered by the ECJ following the Court’s deliberations.

The Digital Copyright Directive

The incoming Digital Copyright Directive ((EU) 2019/720) adds another level of nuance to this matter (given that it is not due to be implemented into national law in the EU until 7 June 2021, it was not applied to these cases). In accordance with the Digital Copyright Directive’s liability regime, platform operators must obtain authorisation from relevant right holders where a platform user uploads protected works. So, in theory, platform operators should no longer have to argue over whether they have any control over what content is uploaded to their platform. Operators will either have the right authorisation or not.

Of course, the one wrinkle is the UK’s decision not to implement the Digital Copyright Directive. This means that platform operators with dual presences in the UK and the EU could find more freedom in operating out of UK. We will continue to monitor both the UK’s developments in this respect, as well as the final judgment by the ECJ, in case either have a notable impact on platform operators and how liability is allocated.

Jai Mudhar, London Trainee Solicitor, contributed to the drafting of this alert.