On the 11 May 2020, the Dutch government, became the first country to formally introduce to parliament its law transposing the DSM Copyright Directive. The Dutch proposal will implement Article 17 of the Directive in the new Article 29c-e Dutch Copyright Act (DCA) and Article 19b Dutch Neighboring Rights Act (DNRA). The government did not try to provide new interpretations or deviate from the text of Article 17.
Article 29c(8), provides no further explanation regarding the definition of "online content-sharing service providers" as included in Article 17(1) of the DSM Directive. This provision is almost identical to Article 2(6) of the Directive, while the explanatory memorandum refers to Recital 62 – including the statement that the definition is aimed at online services which play an important role in the market for online content by competing with other online services (for example, online audio and video services). It names one service that is within this scope (YouTube) but does not expressly exclude any services or provide further examples.
The reference in the second sentence of Article 17(1) to "the rightsholders referred to in Article 3(1) and (2) of Directive 2001/29/EC" means that, according to the Dutch explanatory memorandum, it does not apply to software. Article 17 also does not apply to the press publishers’ right, and the reference to this right has been deleted from the implementation of Article 17(1) in the Neighboring Rights Act.
Regarding "best efforts" and safe harbor provisions in Article 17(4) as implemented in Article 29c(2), there are some noteworthy differences between the consultation draft of July 2019 and the final proposal submitted to parliament in May 2020. The previous version of Article 29c(2) states the OCSSP should have "made every effort" (in Dutch: "alles in het werk hebben gesteld") to obtain authorisation and ensure the unavailability of notified works. The final version says, however, that the OCSSP should have "exerted itself to the best of its ability" (in Dutch: "naar beste vermogen heeft ingespannen") which refers explicitly to the English phrase "best efforts" and the fact that the negotiations on the Directive took place in English.
It is not clear what "best efforts" means in practice. The explanatory memorandum notes that, where licensing is concerned, it will not always be possible to obtain prior authorisation from individual rightsholders (this depends or can differ between sectors and repertoires). It also states that there is no obligation to accept the licence offered; the licence should be reasonable and acceptable to the rights holder and the OCSSP – ie in accordance with the principles noted in Recital 61, therefore striking a fair balance between platforms and rightholders.
This exception does not always apply where the rights are managed by a collective management organisation (especially under collective licence). This requirement would be impossible for most UGC platforms, or at least would unreasonably restrict users to uploading certain types of content. There are also specific situations that require "prior authorisation" to complicate matters further.
Where maintaining unavailability of notified content is concerned, the transposition in Article 29c(2) is very similar to Article 17(4) and Recital 66. The prohibition on general monitoring should be governed by the fact that the obligation to prevent availability only applies where the rights holder has provided the relevant and necessary information (general monitoring is not allowed under Article 17(8)).
The Dutch government has tried to ensure all measures are within the standards of subsidiarity and proportionality as included in Article 17(5). The final version of Article 29c(3) DCA) is essentially identical to this provision and includes this as an operative provision (unlike the 2019 consultation draft which only discussed the proportionality principle of Article 17(5) in the explanatory memorandum).
The Dutch government obtained legislative advice from the Council of State relating to measures included in Article 17(4)(b) in connection with freedom of expression. This advice noted that freedom of expression of users is adequately protected because of the complaint mechanism prescribed in Article 17(9) as implemented in Article 29c(6).
While the Dutch government explicitly recognises that current filtering technology is not equipped to assess context and therefore not able to realise the application of exceptions and limitations (which may be deemed problematic in relation to preserving freedom of expression), it does not come up with alternative conclusions or approaches and only refers to using standard filtering technology for invoking the safe harbor exception in Article 17(4).
Although Article 17(9) suggests that the dispute resolution procedure should be governed by the relevant Member State, the Dutch implementation (Article 29c(6) DCA) requires OCSSPs to ensure that rightsholders and users have access to an independent dispute resolution committee (although whether the OCSSPs are able to provide such independence is questionable).
Lastly, Article 29c(7) states further application of the provisions of Article 29c may be included in a general administrative order by the government. This leaves an option to take additional legal measures if it appears there is an imbalance between freedom of expression on the one hand and property rights on the other.
The Dutch law on Article 17 will have immediate effect from 7 June 2021. We have to wait and see whether the government will come up with further guidance for OCCSPs and rightsholders. Perhaps it has left the option for additional measures open to see how other Member States will implement this difficult piece of legislation and to mitigate legal issues along the way.
To discuss the issues raised in this article in more detail, please reach out to a member of our Copyright & Media Law team.
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