On 26 April 2022, the Court of Justice confirmed the compatibility of Article 17 of Directive 2019/790 on copyright and related rights in the Digital Single Market (“DSM Directive”) with freedom of expression and information by dismissing the action for annulment brought by Poland (case C-401/19).
As a reminder, Article 17(1) of the DSM Directive provides that online content-sharing service providers such as YouTube perform an “act of communication to the public” within the meaning of Article 3(1) of Directive 2001/29 when they provide access to copyright-protected works uploaded by their users. As a result, they must obtain an authorisation from the rightsholders for that purpose, for instance by concluding a licensing agreement.
As the Court of Justice recalled, the regime enshrined in Article 17 of the DSM Directive only applies to providers that qualify as an “online content-sharing service provider”, i.e. a provider of an information society service of which the main or one of the main purposes is to store and give the public access to a large amount of copyright-protected works uploaded by its users for profit-making purposes. Providers that do not meet these criteria fall within the scope of Article 14 of Directive 2000/31 (e-commerce Directive).
Article 17(4) of the DSM Directive lays down an obligation for such content-sharing service providers where no authorisation is granted to use their “best efforts” to ensure the unavailability of and to remove specific works for which the rightsholders have provided the service providers with the relevant and necessary information. This specific liability mechanism aims to encourage the development of fair licensing between rightsholders and such providers.
In order to avoid liability in the absence of authorisation from rightsholders, providers are de facto obliged to carry out a prior review of the content published by users of their services. This preventive monitoring of uploaded content necessarily takes the form of filtering by automatic content recognition tools (the parties to the dispute have stated that there is currently no alternative to such tools).
Poland, the applicant in this case, argued in its action for annulment that the use of such automatic content recognition tools infringes the right to freedom of expression and information of the users of content-sharing services. The Court of Justice, however, rejects the arguments put forward by Poland and hereby follows the opinion of its Advocate General (previously commented here).
The Court of Justice holds that Article 17(4) of the DSM Directive constitutes a restriction on the right to freedom of expression and information. However, such restriction is permissible provided that it (i) is prescribed by law, (ii) respects the essence of the infringed right and (iii) complies with the principle of proportionality, in accordance with Article 52(1) of the Charter of Fundamental Rights of the EU. The Court points out that this assessment must be made taking into account the provisions supplementing and clarifying this new liability regime, in particular Article 17(7) to (10) of the DSM Directive.
With regard to the first requirement, i.e. the requirement that the interference must be “prescribed by law”, the Court of Justice states that, although Article 17(4) does not define the actual measures that content-sharing service must adopt, its open-ended wording results from the need to adapt to the specific circumstances of the individual provider, to the evolution of industry practices and available technologies, and to respect the freedom of enterprise of providers.
As regards the second requirement, the Court notes that the requirement of preventive monitoring of content posted by users is an interference which nevertheless respects the essential content of the right infringed, namely freedom of expression and information. This follows, in the Court’s view, from the safeguards foreseen in Article 17(7) and (9) and recitals 66 and 70 of the Directive, which prevent the blocking of legitimate content (not infringing copyright and related rights).
Finally, the Court concludes that the third requirement of Article 52 of the Charter, the proportionality requirement, has been met. The Court of Justice states that the interference is necessary for the protection of intellectual property rights and that it is not disproportionate with regard to the right of freedom of expression and information of users, taking into account (among others) the safeguards specifically provided for in Article 17 with a view to minimising excessive blocking of lawful information which providers might tend to implement in order to avoid any risk of liability.
As a conclusion, the Court of Justice notes that Member States must, when transposing Article 17 into their national law, take care to act on the basis of an interpretation of that provision which allows a fair balance to be struck between the various fundamental rights protected by the Charter. National legislators are therefore advised to take due note of the Court’s considerations in this decision.
Please contact Karel Janssens for further information about the DSM Directive and/or for general legal advice relating to platforms and the digital economy.