After a year-long study that includes a public consultation and a number of committee hearings on a wide variety of issues, the INDU committee has come to the conclusion that there is a lack of evidence for both a DSM-style press publishers right and for changes to the liability position of platform intermediaries as foreseen in Article 17 of the DSM directive. While Canadian rightsholders argued for the necessity of such interventions, they failed to convince the committee of the merits for these provisions.

On the press publishers right the report essentially takes a wait and see approach (i.e. to see just how badly the EU will fail on these points) that conveys a healthy amount of scepticism with regard to the effectiveness of the EU approach.

The production and dissemination of news content is essential to democratic societies. While the Committee supports the notion that OSPs who profit from the dissemination of copyrighted content they do not own should fairly remunerate its rights-holders, legislators around the world are only starting to develop and implement legislative frameworks to compel OSPs to do so. Canada should learn from the failures and successes of these initiatives to determine whether they serve the interests of Canadians. (page 53)

The report goes on to discuss potential changes to the “Safe Harbour Provisions” that apply to online service providers. Unsurprisingly this discussion is based on the “value gap” rhetoric that provided the germ of the upload filtering provisions contained in Article 17 of the DSM directive. The section on “Safe Harbour Provisions” (pages 74-83) is well worth reading as it makes it clear that there is no such thing as a single “value gap” that can be filled via a legislative intervention, and that changing the liability rules for online service providers will have damaging effects well beyond the music sector:

The Committee understands that many rights-holders lack the bargaining power to increase the revenues they obtain from OSPs. The Committee also agrees with the principle that OSPs who profit from the dissemination of copyrighted content they do not own should fairly remunerate rights-holders. However, proposed amendments to sections 31.1 and 41.27 of the Act would be too blunt a solution to address the issue, especially since there is no consensus among stakeholders about which OSPs cause problems and why. (page 82)

In light of this the committee again takes a wait and see approach, noting correctly that there are still a large number of open questions with regard to the actual workings of the Article 17 of the DSM directive:

Legislators around the world are only starting to develop and implement legislative frameworks to review the proper scope of liability exemptions available to OSPs and require them to fairly remunerate rights-holders. We are yet to see, for example, how EU members will implement the Directive and what results different approaches will yield. The Government should take the time to learn from the successes and failures of these initiatives to determine whether they serve the long-term interests of all Canadians. (page 83)

But the report does not stop at calling for a halt to attempts to change the liability position of online platforms simply because only the music industry would like to see it implemented. Instead it points out that there are substantial problems with content filtering systems that are currently being used by commercial platforms (such as YouTube’s ContentID) and calls on platform operators to offer better protection for users rights:

The Committee finds it questionable, for example, that an OSP’s content management policies would require taking down or de-monetizing content uploaded on a platform before giving its uploader the opportunity to respond to allegations of copyright infringement. (page 82)

This touches on one of the core problems of the entire discussion about upload filtering. Filters are incapable of recognizing uses of copyrighted material that are perfectly legal because they are covered by a copyright exception. They are also dependent on the often imperfect information about ownership provided by rightsholders. This regularly leads to overfiltering that harms both users and content creators. Yet Article 17 of the DSM copyright directive provides strong incentives for platforms to make this problem even worse, and it is a good sign that the INDU report emphasises that for platforms to comply with copyright law they must do a better job at fighting infringement and protecting user rights.

The Committee emphasizes that no entity is entitled to safe harbour exceptions–there is no “right” to safe harbour in Canadian copyright law. These exceptions reflect instead the fact that Parliament recognizes that some entities serve an intermediary function that warrants a special status under the Act. However, this status must nonetheless be earned by complying with the Act as a whole. OSPs in particular would be wise to review their practices and the structure of their platforms to ensure that they reflect the full extent of applicable law, including the rules governing both copyright infringement and its exceptions. (page 83)

Since filters are unable to recognise uses of copyrighted works that are covered by an exception, one way to ensure that users’ rights are not limited would be to require platforms to give uploaders the possibility to respond to allegations of copyright infringement before taking down or blocking their uploads. This would respect the “innocent until proven guilty” principle that has been overturned by privatised enforcement systems like ContentID that primarily exist to keep rightholders happy at the expense of user rights.

It will be very interesting to see how the EU Member States will address the conflicting requirements of Article 17 to both filter at rightholders request (Article 17(4)) and to ensure that users can rely on key exceptions (Article 17(7)). In order to resolve this contradiction they might want to take inspiration from the recommendations from the Canadian legislature.

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