DSM Directive implementation update: six months to go and no end in sight

December 7, 2020

According to Article 26 of the Copyright in the Digital Single Market Directive, Member States have until the 7th of June 2021 to implement the provisions of the Directive into their national laws. This leaves member states exactly 6 months to implement the directive and so it is time to take stock of the implementation status in various Member States.

So far not a single EU Member State has fully implemented the provisions of the Directive and only two Member States have implemented parts of it (In 2019 France implemented the new press publishers’ right and in June of this year Hungary implemented the exception for online educational use). In most of the EU Member States implementing legislation still needs to be introduced into parliament. In the meantime, the European Commission is still working on the implementation guidance for Article 17 that it is required to publish, and the Polish government’s request to annul parts of Article 17 is still under deliberation in the Court of Justice of the European Union (the Advocate General will publish its opinion on the 22nd of April 2021 less than two months before the end of the implementation deadline). All in all it looks increasingly unlikely that most Member States will implement the Directive in time. So let’s take a more detailed look at where the implementation process stands in key Member States.

Commission’s Guidance

The European Commission closed its targeted consultation on the implementation guidance in September and is currently working on a final version of its guidance that is not expected to be adopted before early next year. The Commission has made it clear that it does not expect key elements of the guidance to substantially change from its earlier draft, which is designed to limit the use of automated filters and requires that user uploads remain available while they are under dispute It seems that the Commission is unwilling to bow to the considerable pressure from some Member States and from rightholders to change key elements of the draft guidance.

During the recent CJEU hearing of the Polish case to annul key parts of Article 17, the Commission argued that Article 17 does not infringe users’ fundamental rights precisely because it requires Member States to adopt strong safeguards that limit the use of automated filters and protect user uploads while they are under dispute. The fact that the Commission is building its legal arguments in the CJEU case on the principles expressed in the guidance will make it very difficult to abandon these principles even in the face of enormous pressure from rightholders and some of the Member States.

For now, the increasing delay of the Commission guidelines has already led some Member States to halt their work on the implementation of the Directive. Both Hungary and Sweden have recently communicated to stakeholders that they will wait for the Commission guidance before they will formally introduce their implementation laws and it is likely that a number of other Member States are taking the same approach. As a result there are only three Member States (France, the Netherlands and Croatia) who have implementation legislation in various stages of adoption.

France

As one of the main supporters of the Directive France has shown an interest in a quick implementation of the Directive. This has already resulted in the implementation of Article 15 (the new press publisher right) in October of last year.

In order to speed up the transposition of the remaining provisions, the French government has chosen to include them in an authorisation law that allows the government to implement them by administrative decree. This “Law on various provisions adapting to European Union law in economic and financial matters” (DDADUE law) has been adopted by both houses of the French Parliament on the 18th of November and has been published in the official Journal on the 4th of DecemberM
(See article 34 for the part authorising the implementation of the DSM Directive).

The DDADUE law gives the French government board leeway in implementing the provisions of the Directive. It specifies that the decree implementing Article 17 must be issued within six months after publication of the law in the official journal. For all other provisions of the Directive, the government has 12 months to implement (or six months and 4 days if the government wants to meet the implementation deadline of the Directive).

While this theoretically allows the French government to wait for the Commission’s implementation guidance for Article 17 before issuing its implementation decree, this seems relatively unlikely as the government has repeatedly stressed the need to quickly implement Article 17 (and expressed its opposition to key elements of the Commission’s proposed implementation guidance).

The Netherlands

In the Netherlands the proposed implementation law implementing all provisions of the directive is steadily moving through the legislative process. After the government introduced the law into parliament in June, the legal affairs committee raised a number of concerns related to the implementation of Article 17 which was missing key user rights safeguards. In reaction, the Ministry of Justice proposed amendments that add the missing safeguards. On the 17th of November the second chamber of the Dutch parliament approved the implementation law with a broad majority. The proposed law is now before the 1st chamber (Senate) for a final yes-or-no vote which will likely happen early next year.

While this opens the possibility that the Dutch legislator will adopt the implementation law before the Commission issues its guidance, it is worth noting that the Dutch implementation contains a clause that allows the government to issue further rules on the application of the provisions contained in Article 17. The Ministry of Justice has made it clear that it intends to use this clause to implement the Commission guidance as long as it serves the purpose of protecting users’ rights. The Ministry of Justice has also indicated that it supports the Commission’s proposal to limit the use of automated filtering to situations where a match can be considered to be “likely infringing”.

Germany

In Germany the proposed implementation law has not reached Parliament yet and is still subject to intense public discussion. The most recent proposal by the Ministry of Justice (which still needs to be coordinated with the other Ministries) differs starkly from the legislative proposals we have seen in other Member States. This is most pronounced with regards to the implementation of Article 17.

Seen from abroad, the German implementation proposal represents an ambitious approach to protect users’ rights while at the same time ensuring that creators are remunerated for the use of their works on online platforms. And while the most recent proposal is far from perfect and it clearly does not meet the fulfil the promises that the German government made in its 2019 Council statement it is remarkably similar in structure to the guidance proposed by the Commission.

Seen from the perspective of other Member States who still have to decide on their implementation approach, the German proposal does provide a template for implementing Article 17 in a way that minimises harm for users’ rights while at the same time ensuring that creators are remunerated for uses of their works on online platforms.

What next?

With half a year to go before the implementation deadline there is still a lot of uncertainty about the implementation and impact of the DSM directive. While some of the uncertainties will not be resolved until after the implementation deadline (the CJEU ruling on the legality of Article 17 will arrive after the implementation deadlines has passed) the next two months should bring some more clarity:

The much delayed implementation guidance of the Commission should arrive early in the next year and it seems reasonable that the German government will introduce its implementation law into parliament by the beginning of next year as well (hopefully showing that a user rights respecting implementation of Article 17 is possible).

From the perspective of the Member States that have not yet put forward their own proposals it seems prudent to wait for the Commission guidance (which will likely contain minimum criteria for the protection users rights against automated filtering) instead of coming out with legislative proposals that may need to be rewritten in the light of it. But real clarity about how to properly implement will likely only emerge once the Advocate General opinion in the Polish CJEU challenge is available. Unfortunately that would require Member States to wait until late April of next year making implementation within the deadline all but impossible.