New Liability Rules for Online Content-Sharing Service Providers

Implementation of the provisions of the Directive on Copyright in the Digital Single Market[1] ("DSM Directive") into national legal orders is mandatory for all EU member states. One of the main and most widely commented changes in the Polish legislation are new rules on the liability of online content-sharing service providers (i.e. in practice: owners and administrators of online platforms), for infringement of third-party copyrights by users of those platforms. The regulations apply to platforms that allow their users to publish content online.

What are the current liability rules for platform providers? (notice and take down) 

The existing regulations[2] - in principle - excluded the liability of hosting service providers, as long as the provider did not know that the data it stored and provided was of an unlawful nature, and upon becoming aware of this, prevented access to the data. In other words: the basic prerequisite for excluding the provider's liability was (i) lack of knowledge of the unlawful nature of the content submitted by the user, and (ii) adequate response to notice of the unlawful nature of the content, that is, basically blocking it and preventing access to it. The so-called notice-and-take-down procedure did not require the provider to take additional preventive measures on its own initiative. In practice, the above rules turned out to be insufficient, and the protection of copyright owners (or other authorized entities) was difficult. For example - a file that infringed copyright could be removed from a given service and then reappear on the site within a short period of time, but in a technically different location (i.e. under a different link).

What will change? First: the consent of the rightholders

The proposed amendments introduce additional obligations that a platform provider must meet in order to indemnify itself from liability for storing and making publicly available content that violates copyright. As a general rule, a provider may distribute works uploaded by its users if the rightholder gives its consent. The regulations do not specify how the consent should be given. The rightholder's consent also covers distribution activities by platform users that are not made for profit or do not generate significant revenue. In other words: users of the platform will obtain "automatic" authorization to post and distribute within the platform, works licensed by the provider, as long as they meet the aforementioned conditions (i.e.: acting for non-profit purposes and not generating significant revenue).

What if there is no consent? (notice and stay down)

In the case of lack of consent, online content-sharing service providers - as a rule - are liable for copyright infringement, i.e.: unauthorized acts of communication to the public, including making available to the public, of copyright-protected works and other subject matter. To relieve itself of this liability, the service provider must demonstrate that: (i) it exercised the highest degree of diligence to obtain the consent of the rightholder; (ii) it exercised the highest degree of diligence - in accordance with high standards of professional diligence in the sector - to ensure that there is no access to works for which it has received notification from rightholders that they infringe their copyrights; (iii) it acted promptly after receiving a justified request from a rightholder to block access to or remove the work(s), and (iv) it exercised the highest degree of diligence to ensure no future access to such work(s). These conditions must be met together.

The above rules are slightly different for new providers (i.e., those who have been providing their services in the EU for less than three years and whose annual turnover does not exceed €10 million). The rules for relieving online content-sharing service providers of liability also vary depending on the average monthly number of users visiting these providers' platforms.

Under the new regulations, service providers are required to implement two procedures. The first is "notice and take down," an obligation to remove copyright-infringing content in response to an appropriate notification. This is a continuation of the execution of existing obligations. The second procedure represents a key change from the point of view of platform functioning. The "notice and stay down" mechanism involves filtering and verification by platform providers of content shared by users of these platforms - in order to prevent it from being illegally shared again. This provision (implementing Article 17 of the DSM Directive) caused much controversy at the stage of its adoption in the Directive[3]. On the one hand, the need to implement a mechanism that will protect copyright on the Internet more effectively than before was emphasized. On the other hand, there were opinions that a preventive verification mechanism for shared content could lead to restrictions on freedom of speech. An additional obligation imposed on providers is the need to take action "immediately" after receiving a "duly justified" request from the rightholder to block accessing content to works. What does it mean in practice that the request should be "duly justified"? This is a question that providers must answer independently.

When will the new regulations enter into force in Poland?

The deadline for implementation of the directive was June 7, 2021. In Poland, the new regulations are currently at the stage of public consultation, therefore their final wording will be known in a few months (the likely date is Q3/Q4 2022). Regardless the above, the online content-sharing service providers should already take a look at their business operations and consider whether the new regulations will require them to make changes in the functioning of a given platform.

[1] Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC.

[2] Article 14 of the Act of July 18, 2002 on the provision of services by electronic means (the provision is an implementation of Directive 2000/31/EC, i.e., the so-called e-commerce directive).

[3] On May 24, 2019. Poland has filed a complaint with the CJEU on Article 17 of the DSM Directive, alleging violation of the right to freedom of speech and information guaranteed by Article 11 of the Charter of Fundamental Rights of the European Union. The text of the complaint is available at: https://curia.europa.eu/juris/document/document.jsf?text=&docid=216823&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=15452666.  On April 26, 2022. The CJEU issued a judgment (Case C-401/19) and dismissed the complaint.  The Court confirmed that the content verification mechanism of Article 17 of the DMS Directive interferes with the right to freedom of speech and information, but this right is not absolute and may be subject to limitations. In its reasoning for the judgment, the Court indicated how Article 17 of the DMS Directive should be interpreted to maintain a balance between copyright law and the rights of platform users. The judgment is available at: https://curia.europa.eu/juris/document/document.jsf?text=&docid=258261&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=10742191

Photo - source: Pixabay.com (https://pixabay.com/pl/photos/cms-wordpress-265128/)