What has happened so far?

The freshly approved European Delegation Law is a legislative act that authorises and guides the Italian Government to transpose EU Directives and framework decisions into the Italian National Law. Such a Delegation Law must be proposed by the Government at the beginning of each year, with the approval of the European Delegation Law by both the Senate of the Republic and the Chamber of Deputies often taking a long time and occasionally exceeding a year.

Once the Delegation Law is approved, the Government can issue the related Legislative Decrees in order to change the existing laws and adapt them to the European rules. Since the approval of the delegation law and until the adoption of the Legislative Decrees, no change in law actually happens. Such Legislative Decrees are very quick to set into motion, as the Parliament has a few days only to object them; however, sometimes it happens that the Government waits a long time before issuing the Decrees, or it even neglects to issue any of them, forcing the  Parliament to reiterate the Delegation Law  a year later.

Between April 28, 2020 and June 8, 2020, various stakeholder organizations  were listened by the 14th Standing Committee (European Union Policies) during a series of informal hearings, and the related documents and proposals were published by the Senate.

Cultural heritage institutions and civil society associations requested a broad and harmonized implementation of all the mandatory exceptions provided by the European Directive (e.g. text and data mining, digital and cross-border teaching activities, conservation, out of commerce works) as well as an effective implementation of the principle on the protection of the public domain as stated in Art. 14 .

Following the auditions, a number of  amendments to Article 9 of the European Delegation Law (which deals with the implementation of the DSM directive)  were proposed but eventually , most of them were withdrawn while only a  few of them were replaced by non-binding motions.

On October 29, 2020 the European Delegation Law was approved by the Senate and sent to the Chamber of Deputies.

Following the end of term of Conte II Cabinet and the establishment of the new Government led by Mario Draghi, the work pace of the transposition drastically slowed. Some institutional positions were confirmed, such as the Minister of Culture, Dario Franceschini.

The Delegation Law was eventually approved on March 20 2021, by the Chamber of Deputies but the text needed to be approved again by the Senate due to an amendment on a part not related with the DSM Directive. The final approval from the Senate was given on April 20, 2021. 

At the time of writing, the law has been promulgated and it will enter into force on May 8, 2021.

Copyright and the Public Domain in the delegation law

The Delegation Law lists a number of directives to be transposed, but it only gives guidance about some of them, including the implementation of the CDSM directive – addressed in Article 9. 

Article 9 of the implementation law provides the principles for the transposition of articles 3, 5, 8, 10, 15, 16, 17, 20 and 22 of the CDSM Directive only. As a result, the  implementation law doesn’t include the transposition  of Article 14 on the protection of the Public Domain – even though the Italian Law provides a series of norms of different nature on the restriction of images reproducing cultural heritage in the public domain, both in the form of related rights (Italian Copyright Law L. n. 633/1941, articles 87-88) and in the form of other types of limits (Italian Cultural Heritage Code 42/2004, art. 108).

It’s important to note that the rule expressed at Recital 53 provides that “all of that should not prevent cultural heritage institutions from selling reproductions, such as postcards”, and therefore does not limit the principle of article 14. On the contrary, the option provided  by Recital 53 must be considered as a parallel to the principle of protection of the public domain as provided by Article 14.

The meaning of Art. 9 also needs to be read in the broad context: Art. 1 defers to the general principles on the implementation of EU law, as written in law 234/2012, which in turn refers to the Constitution. Art. 32 of law 234/2012, at 1(b), 1(c) and 1(e), provides some additional guidance: it both allows and requires to change any pre-existing law and non-legislative acts; it explicitly prohibits to keep or introduce any restriction which goes beyond the minimum required by EU law (in the original Italian: «non possono prevedere l’introduzione o il  mantenimento  di  livelli  di regolazione superiori  a  quelli  minimi  richiesti  dalle  direttive»).

There is no doubt that the current laws on the reproduction of public domain works in Italy are more restrictive than what is required by the relevant EU Law, therefore the Italian Government has no space  to opt for keeping such a restrictive law.

Conclusion

The European Delegation Law does not explicitly mention the implementation of Art. 14,  but in order  to achieve an effective  transposition of it in the  Italian Law it is necessary to modify all those state laws and other acts representing a limit to the free use of visual artworks in the Public Domain. A distracted or negligent Government might ignore this requirement, but parliamentary proceedings indicate that Parliament is well aware of it and that it did not give its blessing for the Government to ignore it.

We are afraid that a simple copy and paste transposition of  Article 14 may not be able to achieve the effects as encouraged by the Directive. In such a scenario, the achievement of a European Digital Single Market for the free reuse of faithful reproductions of visual artworks in the public domain seems to be far from possible, despite it being one of the main goals of the Directive. Italy would therefore be considered a not-implementing country for not having implemented the letter nor the spirit of the Directive: this would be highly unfortunate as it would require additional work later.

The post The Italian transposition of the CDSM Directive: A missed opportunity? appeared first on COMMUNIA Association.

One highlight of the presentation was the revelation that the Ministry has also filed an amendment to its own proposal, that expands the transparency provisions contained in the proposal. The proposed amendment would allow access to “data on the use of procedures for the automated and non-automated recognition and blocking of content to authorised parties” for scientific research purposes. In the light of our repeated calls for more transparency when it comes to the use of automated content recognition, this is a small but significant improvement of the proposal. 

The initial presentation was followed by perspectives from Marco Pancini (YouTube), Xavier Blanc (AEPO-ARTIS) and Felix Reda (GFF) who highlighted different aspects of the legislative proposal. Speaking from the perspective of large pan European platforms Marco Pancini expressed concerns about the variation of legislative approaches in the Member States with Germany marking one end of the spectrum. According to him this will lead to fragmentation of the digital single market and create substantial compliance burdens for all types of platforms.

Speaking from the perspective of performers, a group of rightholders that has an interest to see as much use of their works on as many platforms as possible (and does not necessarily benefit from being able to selectively control use of their works), Xavier Blanc called the German proposal “impressive in its ambition” and lauded it as an effort to find a balance between the diverging interests involved in the implementation discussion. He also expressed concerns regarding the practical application of the minor use thresholds contained in the directive. 

Finally, Felix Reda pointed out some of the key shortcomings of the proposal that has been sent to parliament. These include the ridiculously short threshold of 160 characters for minor uses of textual works (the fact that “spaces are not included” according to the Ministry officials does not make this any better, as sometimes the mere title of a work will pass that threshold) and the requirement that uses must consist of less than 50% of an original work to be protected from automated filtering. In the same vein, he pointed out that the proposal in its current form does not offer any possibility to flag contractually allowed uses (such as uses authorised by a Creative Commons license) as legitimate. Felix Reda also pointed out that while the proposal contains sanctions against abuse, it is missing the ability for users to obtain structural remedies. Such remedies are being proposed by the Austrian Government.

The presentation and discussion once more underlined that, while flawed in some aspects, the German implementation proposal gets many things right. As observed by multiple speakers, the key characteristic of the proposal is that it actually tries to identify mechanisms for reconciling the conflicting obligations contained in Article 17 of the directive. As such it sets out a path for how Article 17 should be applied in practice, where other proposals don’t go any further than re-stating the conflicting objectives contained in the directive. As observed by Felix Reda, the proposals also make it clear that, contrary to earlier promises by the German government, upload filters are a fact that users will have to deal with. 

That being said, the questions if the use of automated upload filters is in compliance with fundamental rights will need to be answered by the CJEU, a decision that is expected only after the German proposal is likely to be adopted (late May).

The post Video Recording of COMMUNIA Salon on the German Proposal to Implement Article 17 appeared first on COMMUNIA Association.

For this edition of the COMMUNIA Salon we will be joined by Dr. Martin Bittner und Dr. Thomas Ewert of the German Ministry for Justice and Consumer Protection (BMJV) who will present the implementation proposal. We will have reaction from Felix Reda (Project lead control © at GFF and former MEP), Marco Pancini (Youtube) and (Xavier Blanc (AEPO-ARTIS). The presentations will be followed by an informal question and answer session and concluding remarks by Paul Keller (COMMUNIA/Open Future). The Salon will be moderated by Teresa Nobre. 

The German proposal has been adopted at an interesting time. While the Commission is finalising its implementation guidance, the German proposal shows what the user rights-preserving implementation foreseen by the Commission in its draft guidance could look like in practice. The proposed German implementation of Article 17 contains specific mechanisms designed to ensure that platforms comply with the requirement in Article 17 that legal uploads must not be blocked. While the proposal is not without flaws, it can nevertheless serve as an example for other Member States looking for a way to implement Article 17 in a user rights-preserving way. 

As always, the COMMUNIA Salon is open for everyone to attend and will be held on Zoom. Join us on Wednesday, the 17th of March, at 1530 CET, by registering here. Registered participants will receive login information ahead of the event.

The post COMMUNIA salon on the German proposal to implement Article 17 appeared first on COMMUNIA Association.

This post will take a closer look at the provisions implementing Article 17 of the Directive into German law. As we had noted in our analysis of the original discussion draft from June last year, the German legislator is proposing to implement these provisions into a new act that is separate from the copyright act: the “Act on the Copyright Liability of Online Sharing Content Service Providers”. By now the proposal for this act has undergone two public revisions. After the first discussion draft in June, the Ministry of Justice published a revised draft (“Referentenentwurf“) in October of last year. This revised version maintained the core user rights safeguards underpinning the original proposal (a new remunerated exception for minor use and the ability for uploaders to flag uploads as legitimate) while making a few changes to the way the pre-flagging mechanism works. 

A step back for user rights

Just as the original discussion draft, the Referentenentwurf drew massive criticism from rightsholders that was primarily directed at the user rights safeguards contained in the proposal. Unfortunately the Ministry of Justice has now caved in to some of these demands and as a result  the user rights safeguards have been further cut back in the final proposal adopted by the government (“Regierungsentwurf“).

The most substantial change in the Regierungsentwurf concerns the legal mechanism for ensuring that user rights are protected in line with the requirements of paragraph 17(7). The original proposal relied on a new exception that legalised minor uses of copyrighted works (any use consisting of less than 20 seconds of audio or video, 1000 characters of text or images smaller than 250Kb) and would have prevented platforms from blocking such uses. 

In the updated proposal this exception is gone and has been replaced by a more limited construction of “uses presumably authorised by law” which cannot be blocked automatically. For a use to be “presumably authorised by law” it needs to fulfil the following cumulative criteria:

1. The use must consist of less than 50% of the original protected work,
2. The use must combine the parts of the work with other content, and
3. The use must be minor (a non-commercial use of less than 15 seconds of audio or video, 160 characters of text or 125 kB of graphics) or, if the use generates significant revenues or exceeds these thresholds, the user must flag it as being covered by an exception.

If these conditions are met, the use is considered to be “presumably authorised by law” and cannot be blocked automatically (neither at upload or at a later stage). This new approach is problematic in at least two regards: Firstly, it excludes all uses where more than 50% of an underlying work is used and secondly the threshold of 160 characters of text (that is the result of massive pressure from press publishers) is completely impracticable as it allows automated blocking of uploads based on extremely short snippets of text such as a single sentence. The new “less than 50% of the original” threshold means that some uses that clearly fall under exceptions and limitations (including the ones for quotation, caricature, parody and pastiche explicitly mentioned in paragraph 17(7)) can be automatically blocked at the request of rightsholders. 

Two steps forward in the implementation discussion

While these changes have resulted in a weaker level of protection of users’ rights , the proposal still manages to provide meaningful procedural safeguards for users, that limit the ability of rightsholders and platforms to deploy fully automated upload filters. To ensure that “automated procedures” deployed by platforms in order to  comply with their requirements under Article 17(4) do “not result in the unavailability of content uploaded by users if the use is authorised by law or does not infringe copyright”, the proposal prescribes the following procedure:

1. If an upload matches a work that a rightsholder has requested to block, the platform needs to determine whether the match meets the initial criteria for “uses presumably authorised by law” as outlined above.
2. In the case of “minor use” no further action of the user is required. If however the use is not minor, the platform needs to inform the user of the blocking request and about the need for uses to be authorised by law, and give the user the ability to flag the use as legal.
3. If the conditions for “uses presumably authorised by law” are not met, the platform must block the content and inform the user that she can file a complaint (that needs to be justified). Content has to stay down until the complaint is resolved (if the user does not file a complaint the content stays blocked).
4. If the conditions for “uses presumably authorised by law” are met, then the content stays up and the rightsholder is informed about this fact. The rightsholder can then file a complaint, and the content stays up until the dispute is resolved (if the rightholder does not file a complaint the content stays up as well).
5. If the rightsholder is a “trusted rightsholder”, and after a human review they decide that the use is evidently infringing and commercially harmful, they can request that the content is taken down immediately until the dispute is resolved.

Complaints submitted by rightsholders and users must be processed by the platform (or an entity designated by the platform) within one week. If the use is found to be legal then it must stay up (or be reinstated, if it had previously been blocked). If the use is found to be infringing then it must be taken down (or remain unavailable if it had previously been blocked).

Illustration of the Article 17 workflow by the German Ministry of Justice and Consumer Protection (BMJV). See our own more detailed illustration here.

Despite the substantial weakening of the standard for identifying uses that cannot be blocked automatically that it has undergone since the initial version, the German proposal still manages to provide meaningful safeguards against over-blocking. In broad lines, the German proposal follows the model that we had presented at the sixth meeting of the Commission’s stakeholder dialogue almost a year earlier. While some of the parameters (most notably the 160 characters maximum for minor uses, and the requirement that a use must contain less than 50% of an original work) are deeply flawed, the core mechanism to comply with the requirements in Article 17(7) remains unchanged: automated filtering without any human oversight must be limited to uploads that are classified as manifestly infringing. 

It is welcome  to see that, so far, this guiding principle has survived all attempts of weakening the user rights safeguards in the German implementation discussion. In this context it is important to note that the German proposal does not stand alone in recognising this guiding principle: the same principle is present in the Commission’s draft implementation guidance, the recent Austrian implementation proposal and it has been endorsed by a large group of copyright scholars as early as in the fall of 2019. However, it is questionable however whether the specific thresholds chosen by the German government are sufficient to meet the requirement of Article 17 (7) that legal content must not be blocked, given that examples abound where perfectly legal uses would fail to meet those increasingly strict thresholds.

The German proposal will now be discussed in the German Parliament with a first reading scheduled at the end of March. On the 17th of March, ahead of this reading we will organize a COMMUNIA salon in which we will discuss the proposal in more detail with representatives of the German Ministry of Justice and Consumer Protection (additional participants to be confirmed) You can sign up for this event here.   

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While the past month included the holiday break, there have still been some significant developments. This included the first member state to have completed the implementation process (the Netherlands) and the first Member state to throw in the towel and officially announce that the implementation process will only be concluded after the implementation deadline (Denmark). But before we look at these developments in more detail, let’s first have a look at the discussions surrounding the implementation of Article 17.

There has been no further progress on the Commission’s Article 17 implementation guidance. Originally expected to be presented in the second half of 2020, there is no sign of them yet. So far the Commission has not even managed to publish the responses to the consultation that was concluded in September 2020.

More Member States commit to protecting users’ rights.

With no clear timeline for the Commission guidelines, more and more Member States have given up waiting and are presenting their implementation ideas for Article 17. In early December the Austrian Ministry of Justice circulated a first proposal for implementing Article 17 among stakeholders for feedback (see our joint response with epicenter.works and SaveTheInternet Austria here). This proposal takes up a number of key elements of the previous German proposals (direct remuneration right for creators, the ability to pre-flag uploads as legitimate, a threshold that protects minor uses from automated blocking, and the ability for users’ organizations to act against structural overblocking) and fits them into a more traditional approach: Where the German legislator proposes to implement the Article 17 provisions in a separate law, the Austrian proposal would integrate the provisions into the body of the existing copyright act. 

In Germany, the discussion about the implementation proposal is still ongoing: Seemingly in response to pressure from the rightsholders and platforms (channeled via other ministries controlled by the CDU) the Ministry of Justice has retracted one of the most controversial elements of its implementation proposal: A new leaked version of the proposal (dated 22 November) is missing the controversial “de minimis” exception that would have legalized uses of works shorter than 20 seconds of audio or video or 1000 characters of text. However, the same thresholds are now part of a new mechanism that protects “presumably legitimate uses” as long as they do not exceed 50% of an original work and combine the matched work with other material. While much weaker than a standalone exception, this mechanism would still ensure that many forms of user-uploaded creative expression could not be automatically blocked. 

The next Member State to present a user rights-preserving approach to Article 17 was Finland: On the 21st of December, the Finnish Ministry of Culture held an online public hearing (bravo!) on the implementation of Article 17 of the Copyright Directive. As part of this meeting, the Ministry outlined its proposal for a user rights-preserving “blocking procedure” that substantially deviates from the approach that is underpinning the Austrian and German proposals and the Commission’s proposed Article 17 implementation guidance: Instead of limiting the use of automated filters to blocking a subset of uploads where there is a high likelihood that the use is infringing, the Finnish proposal does away with requirements on platforms to automatically block user uploads entirely. 

The Finnish proposal relies on mandatory use of content recognition technology by platforms and the rapid notification of rightsholders of uploads that match works for which rightsholders have provided platforms with reference information. However, platforms are only required to disable access to uploaded content after rightsholders have provided them with a properly justified request to block a particular upload. Users have the ability to challenge blocks through an independent alternative dispute resolution mechanism, completely freeing platforms from making decisions on the legality of individual user uploads (see our more detailed initial analysis here).

Taken together there are now three separate implementation proposals that would include strong user rights protections in the national laws and that give concrete form to the requirement contained in Article 17(7) (and reaffirmed by the EU legislator in front of the CJEU) that legitimate uses must be protected from automated blocking and removal. While none of these proposals have been adopted by the national legislators yet, they show a clear path towards user rights-respecting (and therefore directive-compliant) national implementations.

Other developments

In the Netherlands, the final vote on the implementation law took place in the Senate (1st chamber) on the 18th of December which approved the new law by a wide margin. The Netherlands became the first EU Member State to fully implement the directive on the 28th when the implementation law and an accompanying “small royal decision” were published in the official journal.

The royal decision stipulates that the majority of the law will enter into force on the 7th of June. The main exception is Article 16 of the Directive (which restores the ability of publishers to receive a part of private copying levies) which has already entered into force on the 1st of January. 

While the Dutch implementation of Article 17 is mostly a literal transposition of the provisions contained in the directive, it is important to note that it includes a provision that allows the Ministry of Justice to provide further rules on the application of the Article 17 implementation. This provision leaves some room for the Dutch executive to bring its implementation into compliance with the expected Commission guidance (and future CJEU jurisprudence on the application of Article 17). 

Finally, Denmark is the first Member State to officially announce that most parts of the Directive will not be implemented before the deadline. In November the Ministry of Culture announced that it would only implement Articles 15 and 17 during this parliamentary year and implementation of the rest of the directive would only commence after the summer.

On the 18th of December, the Danish Ministry of Culture followed up with a public consultation on the implementation of Articles 15 and 17. A first analysis of the Article 17 implementation proposal reveals that the Danish Ministry has opted for a literal implementation ignoring the need to protect legitimate uses from automated blocking. The consultation deadline is 22 January and we are working with partner organizations in Denmark to submit a response.

The post DSM Directive implementation update: more proposals to protect users’ rights appeared first on COMMUNIA Association.

The procedure presents a radical departure from the approach that is underpinning other user rights-preserving implementation proposals (such as the Austrian and German proposals) and the Commission’s proposed (and much delayed) Article 17 implementation guidance. Instead of limiting the use of automated filters to a subset of uploads where there is a high likelihood that the use is infringing, the Finnish proposal does away with automated blocking of user uploads entirely, but not with automated detection of potential infringements. 

The Finnish proposal relies on mandatory use of content recognition technology by platforms and the rapid notification of rightsholders of uploads that match works for which rightsholders have provided them with reference information. However, platforms are only required to disable access to uploaded content after rightsholders have provided them with a properly justified request to block a particular upload:

While this approach bans automated filtering of user uploads, it still heavily relies on automated content recognition technology. The proposed “blocking procedure” requires that all platforms covered by Article 17 would need to have technology in place that can match uploads to reference information provided by rightsholders so that rightsholders can be directly notified when matching content is uploaded. Notifications sent to rightsholders also include the justifications that uploaders have provided at the time of upload as to why they consider a use of third-party content to be legitimate. 

Based on these notifications rightsholders have to evaluate if the upload infringes copyright or not taking “due note of the reasoning provided by the uploader”. If rightsholders come to the conclusion that an upload is infringing, they can issue a blocking request to the platform, which has to disable access to the upload (otherwise it will be directly liable for copyright infringement). The platform also needs to notify the uploader and provide it with a copy of the blocking request. The  uploader can then challenge the blocking of the upload through an independent Alternative Dispute Resolution (ADR) body. Outcomes of the ADR process are binding on the platform but can be challenged in court by either uploaders or rightsholders (see slides 14-26 of this presentation for a full overview of the process). 

A Particular balance

The Finnish proposal strikes a particular balance. While banning fully automated content blocking constitutes a very strong fundamental right preserving move, the proposal also makes rightsholders – who have an interest in any dispute over the use of their protected works in user uploads – the initial arbiter of such disputes. As explained during the hearing, the Ministry of Culture settled on this approach in order to comply with the requirement in Article 17(9) that 

Where rightsholders request to have access to their specific works or other subject matter disabled or to have those works or other subject matter removed, they shall duly justify the reasons for their requests.

So far Member States (and the Commission itself) have interpreted this provision to only apply in the context of the complaint and redress mechanism established by Article 17(9). User rights advocates have repeatedly highlighted the fact that this contextual limitation is not supported by the text of the Article and that therefore this provision must be interpreted to mandate that all blocking and removal requests (including the initial ones) must be duly justified by the requesting rightsholders. Based on Finland’s support for this literal reading of the obligation, fully automated takedowns become impossible to reconcile with the text of the directive. 

Unfortunately, banning fully automated blocking does not solve all user rights concerns. Tasking rightsholders with assessing if a particular use of their works is infringing or not gives rightsholders a lot of power over a user’s speech that is ripe for abuse. In recognition of the power imbalance between users and rightsholders, the Ministry has included a number of ex-post checks on their power: users have access to an impartial ADR mechanism, right holders can be held liable for damages or harm (not only economic) caused by wrongful blocking, and courts can bar rightsholders from using the blocking functionality if they repeatedly make wrongful blocking requests. 

The Ministry made it clear that it sees the ADR mechanism as a central element of its proposal and has clearly given this element a lot of thought: the body would be independent of both platforms and rightsholders, would publish its decisions which would be binding on platforms and it would have the power to recommend compensation for harm and/or damages caused to the user. 

While this proposal sets a new benchmark for the out-of-court complaint and redress mechanism required by the directive, its usefulness will largely depend on the ease with which users will be able to bring disputes in front of this body. For the ADR mechanism to offer meaningful protection to users from rightsholder overreach, the proposal requires users to appeal to the ADR body via a relatively complex process (see slide 30 from the presentation). While it is impossible to predict how uploaders will react to removals that they consider unjustified at this stage, it seems entirely plausible that instead of engaging with a complex system they will simply give up. 

A clear win for large platforms?

So what would the proposed “blocking procedure” mean for the different stakeholders? It seems clear that the main beneficiaries will be large platforms: The proposed mechanism would push the responsibility for determining the legitimacy of the use of third party content to users and rightsholders. The role of platforms is reduced to implementing blocking decisions taken by rightsholders and the decisions of the ADR body. As long as they act in line with these decisions, their liability risk is reduced to zero. 

This relatively privileged position of platforms comes at the expense of being required to implement automated content recognition technology that can do the initial content matching. Requiring platforms to have such technology in place may not be a problem for larger platforms but will likely represent a much bigger challenge (in terms of costs) for smaller platforms especially if they have to deal with multiple types of content at once. 

For rightsholders and users, the picture is less clear. The Finnish model allocates a lot of power to rightsholders, who have the right to decide whether uploads containing their works must be taken down or not. On the flip side, having to justify every single blocking request will require a lot of resources (without resulting in a corresponding increase in revenues).  

For users, having rightsholders assessing if their uploads are legitimate – instead of being subject to automated decisions – is not necessarily an improvement. Obviously, rightsholders are not neutral arbiters when deciding whether their own rights have been infringed, and are therefore unlikely to invest resources to ensure that user rights are respected. While users, and potentially also the organizations that represent them, would have the possibility of challenging wrongful blocking in court, they will not be able to force rightsholders to change their decision parameters, even if they lead to systematic overblocking. The only remedies available to discourage systematic overblocking are claims of damages to be paid by rightsholders for the harm caused by individual cases of wrongful blocking, and (at the very end of the line) the possibility for courts to exclude rightsholders from being able to issue blocking requests in case of repeated wrongful claims. 

Furthermore, the proposal requires substantial efforts from uploaders who want to exercise their right to use third party content under exceptions and limitations or who want to make sure that other types of legitimate uses are not wrongfully blocked. The model is based on the idea that users justify their use of third party content at upload. While this may make sense when sharing more elaborate creations, it seems unrealistic and unwanted to expect users to include justifications with every upload in more casual sharing contexts common on many social media platforms. Even if users make the effort of providing justifications for their use of third-party content, they have no guarantee that rightsholders will actually take those justifications into account when issuing blocking requests. In addition, the amount of information that users need to provide for “deblocking requests” will likely discourage a substantial portion of uploaders from trying to contest unjustified blocking by rightsholders.

For both rightsholders and users, this means that the proposed system will only work if the number of uploads that give rise to blocking requests is very limited. The number of blocking requests will be a function of the ability of platforms and rightsholders to conclude comprehensive licensing arrangements. Unless rightsholders are willing to comprehensively license platforms (even in sectors like the AV sector where this goes against current business practices) they will need to deal with substantial amounts of notifications that they will need to process if they want to effectively exercise their rights. Despite these potential shortcomings, the proposal by the Ministry of Education and Culture is another interesting contribution to the implementation discussion. It clearly shows that governments are struggling with reconciling Article 17 with national systems of fundamental rights protections. The Finnish government is the third government to make it clear that simply transposing the language of Article 17 into national legislation is not a viable option to implement the directive in a fundamental rights preserving way. The approach presented on Monday may not be perfect yet, but it is another approach that shows a real effort on behalf of a national legislator to protect users’ rights.

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On the other hand, we have the German approach that proposes to implement Article 17 via a separate “copyright-service-provider law” (“Urgeberrechts Diensteanbieter Gesetz”) that substantially departs from the language in an attempt to capture the structure and effet utile of the directive.

The German implementation proposal focuses on using the room for legislative discretion left by the directive to give practical meaning to the abstract requirements to protect user rights contained in the directive. It also adds measures aimed at ensuring that individual creators directly benefit from the new rules. As a result, the German implementation proposal is much closer to the legislative compromise struck by Article 17 than any of the more literal implementation proposals that have emerged so far.

Over the past few months, the German implementation proposal has come under intense pressure from exclusive rightsholders and some platforms who argue that the proposed approach does not adequately reflect the provisions of Article 17. Besides, rightsholders have also claimed that it violates national and international copyright law in multiple ways. A central argument of the opponents of the German implementation proposal is the claim that it strays too far from the text of the directive.

Given this background, it is interesting to see the first Austrian implementation proposal (that was circulated to stakeholders for feedback earlier this week) take a middle road between the two existing approaches. The Austrian implementation proposal does integrate the provisions from Article 17 directly into the text of the existing Austrian copyright act, thus deviating from the structure of Article 17, but mostly stays very close to the text of the directive. At the same time, it takes up key elements first introduced in the German approach: The non-waivable direct remuneration right for authors and performers, the protection of minor uses from automated filters, the ability for users to flag uploads as legitimate, and the ability for users’ organizations to act against platforms that engage in structural over-blocking. The result is a proposal that (similar to the German one) focuses on strengthening the position of creators and users, instead of leaving it up to platforms and large corporate rightsholders to set their own rules.

The Austrian proposal in more detail.

So let’s look at the Austrian proposal in more detail: Similar to the German proposal it introduces a direct remuneration right for authors and performers that will ensure that independent of existing contractual arrangements with publishers and other intermediaries, creators will be remunerated for the use of their works on platforms. As in the German proposal, this direct remuneration right can only be exercised via collective management organizations, which means that it will primarily benefit creators in sectors with existing collective management structures. In the German discussion this direct remuneration right has been strongly criticized by both platforms, who would prefer not to pay for obvious reasons) and by intermediary rightsholders, who prefer to control how much (or rather little) of their licensing revenue should go to the actual creators. Given that the need to make sure that creators benefit from the use of their works on platforms was the main argument for getting Article 17 in the first place, the fact that rightsholders are now trying to undermine the proposed direct remuneration right is more than a little bit hypocritical. 

On the other side of the balance, there are three main interventions that strengthen user rights. Where the German Ministry of Justice proposed a new “minor uses” exception that would ensure that minor uses of existing works cannot be automatically be blocked, the Austrian proposal takes a slightly different approach. It borrows the definition of “minor uses” from the German proposal (less than 20 seconds of audio or video, less than 1000 characters of text, images smaller than 250KB), but instead of making them subject to an exception, the Austrian proposal specifies in § 89a (1) that automatically blocking these “minor uses” without human review is not proportionate (and therefore platforms are not allowed to do this). This is an interesting use of the proportionality requirement from Article 17(5) of the directive that is based on the correct insight that measures (such as automated blocking) employed by platforms must be proportionate concerning all the objectives contained in Article 17 including the requirement not to block legitimate uses in 17(7) and 17(9). In the explanatory memorandum, the Ministry notes that “It is precisely the use of such small excerpts that will often be covered by an exception or limitation and thus be permitted”. While this may be a less controversial approach, authors and performers would be better off in the German proposal: By legalizing minor uses under an exception, the German proposal would create the possibility that they receive compensation for those uses.

Excluding minor use from automated filtering is one of two measures to ensure that the Austrian proposal complies with Article 17(7). In addition to this, the proposal also requires platforms to provide users with the ability to flag uploads as covered by an exception. § 89b (7) specifies that platforms must display uploads flagged by their uses as long as the legal nature of the use is obvious to the platform. While welcome in principle, this flagging mechanism is more limited when compared to the mechanism in the German proposal: It only applies to uses under the exceptions noted in Article 17(7) of the directive (with the notable omission of use for the purpose of citation) while it should apply to uses under all relevant exceptions. Besides, the flagging mechanism can’t be invoked if a work is used under open licenses or is not protected by copyright at all.

The third measure to protect user rights is the right for users’ organizations to file cases against platform operators that systematically fail to meet their obligations to protect legitimate uses. § 89b (7) allows user organizations to bring cases against platforms that systematically over-block user uploads in order to stop them from doing so. As noted in the explanatory memorandum the ministry sees this as an important additional safeguard to protect users against violations of their fundamental right to freedom of expression. The ability to bring collective action against platforms is further strengthened by an explicit requirement in § 89b (7) for platforms to provide users and user organizations with information on the functioning of any measures they employ to comply with Article 17. Taken together these two measures constitute an important check against over-blocking that is missing from all other implementation proposals. While the German proposal does contain the ability for users’ organizations to take platforms to court over overblocking, it lacks the necessary information rights over the functioning of blocking measures and the remedies to bring about systematic changes in the way that platforms police copyright-protected content.

A template for implementation?

In general, the Austrian example appears to fuse together some of the explicit attempts of the German Ministry of Justice to implement the directive in a way that minimizes the over-blocking of legal content, provides strong safeguards for user rights and ensures that authors and creators are directly remunerated, on the one hand, with the desire to stick as closely as possible to the text of the directive, on the other hand. The result may be the most realistic implementation proposal yet.

While the elements that we have outlined above will almost certainly come under attack from large corporate rightsholders (and possibly from the platforms as well), it is important to recall that, according to the Commission’s guidance proposal, it is simply not enough to do a literal implementation of the directive that does not specify concrete safeguards against automated blocking of legitimate content. Having closely watched the discussion on the European level and in Germany, the Austrian Ministry of Justice may just have shown us (and more importantly the other Member States still waiting to propose their implementations) a credible way for reconciling the conflicting requirements of Article 17 of the DSM directive.

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In order to achieve this objective, the German discussion draft published in June relies on the idea of “pre-flagging”: users would be allowed to flag uploads containing third party works as legitimate. Platforms would then be prevented from automatically blocking pre-flagged uploads unless they determine that the flag is incorrect because the upload is “obviously infringing”. 

By contrast, the Commission’s implementation guidance consultation proposes a “match-and-flag” mechanism: if upload filters detect the presence of a third party work in an upload and the use is not deemed to be “likely infringing”, then the uploader is notified and given the ability to state that the use is legitimate. If the user flags the upload as legitimate, the platform will have to initiate a human review of the upload, which remains available from the moment of upload until the review has been concluded. This type of mechanism was first suggested by a group of copyright academics in October of last year. It is also at the core of the proposal that we had presented during the last meeting of the stakeholder dialogue.

Both approaches provide a mechanism that limits the application of fully automated upload filters (while implicitly acknowledging the fact that many platforms will deploy upload filters). In the Commission’s proposal, filters are limited to making a pre-selection (“is the upload likely infringing?”); in the German proposal, they can only operate on unflagged content and to filter out “obviously incorrect” pre-flags.

Convergence on “match-and-flag”?

Both approaches have been criticised by rightholders, who claim that they undermine the “original objective of the directive” without providing alternative proposals on how automated filtering can be reconciled with the requirement not to block legitimate uploads. In addition, the German discussion proposal has also been criticised by platforms such as Google and Facebook. The platforms are arguing that giving users the ability to pre-flag every single upload would be impractical and would likely lead to substantial numbers of unnecessary (where the content in question is already licensed) or unjustified (users making excessive use of the pre-flagging tool) pre-flags, which would make such a system impractical to operate at scale. 

Netzpolitik.org has now published a leak of a new version (“Referentenentwurf”) of the German implementation law proposal. This version abandons the pre-flagging mechanism and replaces it with a “match-and-flag” approach similar to what the Commission has proposed (it also closely resembles a suggestion made by Google in its response to the German Consultation). However, there are also important differences between the two proposals, and based on a closer analysis it is clear that the new German proposal offers considerably less protection against unjustified blocking or removal of uploads than either the initial pre-flagging approach or the approach proposed by the Commission. To understand why we need to look at the details of the proposed mechanisms.

Both approaches clearly assume that platforms are able to identify matches between uploads and works that rightholder have requested to be blocked in (near) real time. Both the Commission’s proposal and Article § 8 of the German Referentenentwurf assume that users can be notified of a match during the upload process and thus can prevent legitimate uploads from being blocked at upload. While some technology vendors claim to have the ability to reliably match content during the upload, it is currently unclear if the ability to match in (near) real time is widely available to all platforms.

Given the uncertainty about the availability of real-time matching solutions for all types and sizes of platforms, it must be ensured that the use of automated filters is not imposed de facto by national legislators if this could be disproportionate for smaller platforms. The New German proposal does seem to require the use of real-time filters which would make it incompatible with the proportionality requirements in Art 17(5). 

The limits of “match-and-flag”

But even if we assume that platforms have the ability to match in real time during the upload, the approach still has limitations. The requirement to make best efforts to prevent the availability of works in Article 17(4)b does not apply only to new uploads: it also applies to uploads that are already on a platform. In situations where rightholders provide platforms with new blocking requests, the platforms will need to make best efforts to identify and remove them as well (this problem will be especially acute at the moment when the directive comes into force). Notifying the uploader of a match and giving her the possibility to flag the upload as legitimate does not offer the same protection here, because it cannot be assumed that the user has the ability to react immediately. This would mean that the upload in question would become unavailable until the uploader has had a chance to object. 

This problem is much more pronounced in the new German proposal. The Commission’s proposal makes it clear that platforms are only allowed to automatically remove uploads if a match is “likely infringing”. This means that already uploaded works that do not meet this requirement cannot be removed until either the user has had a chance to react to a notification or until the platform has concluded a human review of the upload in question. The German proposal does not contain such a safeguard, as it requires the automated removal of uploads unless these have been flagged as legitimate during the upload. 

This is regardless of whether the match is likely to be infringing or not. In situations where users cannot react to notifications right away, this will result in the removal of substantial amounts of legitimate uploads. Under the previous German pre-flagging mechanism this would not be an issue (with the exception of uploads already on the platform when the German implementation enters into force), because users would have had the ability to flag any legitimate upload as legitimate. The new German proposal only gives them the possibility to flag works as legitimate that are already on a blocklist at the moment of upload. 

Towards a combined approach?

As long as this blindspot persists, the new German proposal does not adequately implement the requirement in Article 17(7) that the availability of uploads that do not infringe copyright must not be prevented by measures deployed to implement Article 17(4)b. To fix this, the German legislator should add, to the mechanism provided in §8 of the new proposal, the ability to flag any upload as legitimate after it has been uploaded and that flagged upload cannot be automatically blocked. 

This combined approach would provide even stronger safeguards than the Commission’s proposal, which hinges on the idea that it is possible to automatically differentiate between likely infringing and likely legitimate content based on technical parameters.

As we have pointed out in our response to the Commission’s consultation, this approach, while viable in principle, is flawed as long as defining those technical parameters is left to platforms and rightholders without any involvement from users’ organisations. In addition, the proposed “likely infringing” standard does not set a high enough bar for preventing automated removal of potentially legitimate content. Instead, the “identical or equivalent” standard proposed in the academic statement that introduced the idea of “match-and-flag” should be a point of departure. In the case of time based media, this could be operationalised as matches that are at least 20 seconds long and where the match consists of at least 90% of the original work and at least 90% of the upload in question. In addition, matches of indivisible works (such as pictures) and short works (such as short poems) should never be assumed to be infringing, even when they correspond to 100% of an upload.

Meaningful protection for Public Domain and openly licensed works

A final advantage of such a combined approach is that it would also offer real protection from automated blocking for works that are in the public domain or available under open licenses. While such works are free to use for anybody, they are frequently blocked or removed as the result of wrongful ownership claims. In this situation it must be possible for anyone at any time to flag such works as being in the public domain or openly licensed. Given that this status will be the same across all (types of) platforms, such flags should not be recorded by individual platforms but in a public database that must be consulted by any system as part of assessing the status of an upload. 

While it may make sense for platforms to use their own private databases when it comes to matching uploads to reference files of works to be blocked, the effective protection of public domain and openly licensed works requires a fully transparent public database that reflects their status as public goods. This public database must be consulted by any system as part of assessing the status of an upload and should be maintained by an independent trusted entity that also offers a conflict resolution mechanism for resolving conflicting claims. 

Summary

At this stage, there seems to be some level of convergence towards “match-and-flag” mechanisms as a practical approach to reconciling 17(4) and 17(7). While still exhibiting shortcomings, such an approach would reflect the internal balance of Article 17 that the EU legislator arrived at. In how far a “match-and-flag” mechanism will be able to put this balance into practice depends on its practical implementation. As we have outlined above this means that: 

• There must be high thresholds to presume infringement and consequently permit fully automated blocking of uploads.
• These thresholds should be based on fully transparent criteria, which users can challenge in court.
• All matched uploads that do not meet these thresholds must be protected from blocking and flagged uploads must not be removed while under review by the platform.
• In addition there must be the ability for anyone to pre-flag works that are in the Public Domain or available under an open license via a decentralised public database that must be consulted by any (automated) measures used to comply with Article 17(4).
• National implementation must contain safeguards that ensure that already existing uploads cannot be blocked automatically.

Finally, it must also be ensured that the use of automated filters is not imposed by national legislators if this would be disproportionate for the platform in question.

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While the Dutch government has reacted to criticism from civil society and members of Parliament by fixing some of the most obvious shortcomings of its implementation law, the 2nd chamber of the French Parliament has adopted a law that gives the French government the power to implement Article 17 (and the rest of the provisions of the DSM directive) however it sees fit. 

Netherlands: a course correction

Back in July of 2019, the Netherlands were the first country to propose an implementation law of the DSM directive. Somewhat surprisingly (the Netherlands had been one of the most vocal opponents of Article 17 in the Council) the proposed implementation law did not make any efforts to protect user rights and omitted most of the user rights safeguards contained in the final version of Article 17. After the proposal was sent to Parliament in June this year, together with Bits of Freedom and others we pointed out these shortcomings to the members of the legal affairs committee. Yesterday, in response to questions from members of the legal affairs committee, the government conceded that its original implementation proposal was incomplete and added the missing user rights safeguards to the proposal for an implementation law.

The updated implementation law proposal now includes all elements of Article 17 of the DSM directive. While it is disappointing to see that the Dutch government is sticking closely to the text of the directive (and not following Germany in exploring the flexibility offered by the directive), there is still room for improvement. The implementation proposal contains a clause that would allow the government to issue more detailed rules on the application of the article by means of an administrative order. In its response to the Parliament, the Dutch government has made it clear that it intends to use this clause to implement the Commission’s upcoming guidance on the implementation of Article 17, as long as such guidance will not further limit user’s rights. In this context the Dutch government has also made it clear that it supports core elements of the Commission’s proposed guidance. The Minister of Justice writes:

I follow the European Commission, which, on the basis of the stakeholder consultations carried out so far, is of the opinion that the application of automatic filters should be limited to those cases where there is a likelihood of infringing uploads (‘likely infringing’).

France: soldiering on

As we have reported earlier this week, the French government has made it clear that it is not interested in implementing any additional user rights safeguards. This is reflected in its approach to implementing Article 17 into national law. After having presented an initial proposal for an implementation law in December 2019 – one that also omitted most of the user rights safeguards contained in the final version of Article 17 – the French government changed its approach. In the face of possible delays because of the COVID-19 emergency, the French government added provisions to the law “DDADUE” that would authorise it to implement the provisions of the new copyright directive by decree (and without further parliamentary discussion). This so-called “DDADUE” law was approved by the Senate in July of this year and yesterday the Assemblee Nationale approved it as well. Once signed into law by the President, the government will have six months to implement the provisions of Article 17 into the French intellectual property law. 

In theory, the French government could use this time to wait for the Commission’s guidance and to add the missing user rights safeguards, but given the French government’s strong alignment with the position of rightholders and commitment to a rapid implementation, it seems more likely that it will go ahead and implement the law as soon as possible, without any substantial changes from the version presented in December. Given that the resulting law will likely lack important user rights safeguards contained in Article 17, the legality of such a rushed implementation of Article 17 remains highly questionable. 

And while France will likely be the Member State which can make the (dubious) claim to fame of being the first Member States to implement Article 17, the rest of the Member States would be much better advised not to look at France for guidance. The one thing that all of them should learn from these concurrent implementation efforts is that Parliamentary scrutiny contributes to better legislative outcomes. While the Dutch Parliament asserted its right in order to fix obvious flaws in the government’s proposal, the French Parliament has passed on this opportunity, severely undermining the legitimacy of the French implementation.

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