The CJEU ruled on Tuesday, April 26, 2022 that Art. 17 of the DSM Copyright Directive 2019/790 is effective. It dismissed Poland's action for annulment (Case C-401/19, judgment of April 26, 2022, ECLI:EU:C:2022:297 ).
The subject of the proceedings was the obligation of service providers laid down in the Directive to prevent future copyright infringements. In order to benefit from an exemption from liability in relation to the communication to the public of copyright infringing content on their platform, online content-sharing service providers are obliged, under more detailed circumstances, to find such content in advance and prevent it from being made available to the public. Poland's fear is that these obligations, as enshrined in Art. 17(4)(b) and (c) last sentence of Directive 2019/790, could only be fulfilled through the use of automatic detection and filtering systems. Such obligations thus interfered to a significant extent with users' freedom of expression and information, since the Directive did not provide adequate safeguards for the protection of those fundamental Union rights. The provision violated the essential guarantee and was not proportionate.
The CJEU did not follow this line of argument. It is true that Article 17 of Directive 2019/790 constitutes an interference with the exercise of the fundamental rights referred to, because the prior control and filtering of content could lead to content not being disseminated in the first place (para. 55). The interference is also attributable to the Union legislature. However, this interference is justified. The liability system of Art. 17 of Directive 2019/790 provides for various measures that protect the fundamental rights of users precisely with regard to the foreseeable automated review and do not disproportionately restrict them.
The CJEU first emphasizes that only systems that can reliably distinguish between lawful and unlawful content may be used (para. 86). It further emphasizes that Art. 17(7)(2) of Directive 2019/790 requires Member States to provide in national law for exceptions and limitations to copyright holder for the purposes of quotations, criticism, reviews, caricatures, parodies or pastiches (para. 87). In addition, Article 17(9)(4) of Directive 2019/790 requires that service providers inform their users in the terms and conditions that works and other subject matter may be used in accordance with exceptions and limitations to copyright (para. 88). It was also decisive that the obligation to (automatically) prevent future copyright infringements could only be considered if the rights holders had provided the necessary information for this purpose (para. 89). A general monitoring obligation must be excluded, so that the service provider should not be required to independently assess the content in order to determine the illegality (para. 90). The CJEU thus emphasizes the limits of the use of automated detection and filtering systems. Furthermore, a rights holder must provide sufficient reasons for a blocking request so that the service provider can convince itself without a detailed legal examination that the reported content is illegal and that its deletion would be compatible with freedom of expression and freedom of information (para. 91). Removal on a mere claim without addressing any limitations or exceptions is thus to be prevented. In addition, Article 17 of Directive 2019/790 provides for several procedural requirements to be observed in connection with the blocking of content, such as the possibility for users to lodge an appeal against a blocking decision by the service provider (para. 94). These procedural safeguards would have to be taken seriously by the Member States when implementing Art. 17 of Directive 2019/790:
“Member States must, when transposing Article 17 of Directive 2019/790 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. Further, when implementing the measures transposing that same provision, the authorities and courts of the Member States must not only interpret their national law in a manner consistent with that provision but also make sure that they do not act on the basis of an interpretation of the provision which would be in conflict with those fundamental rights or with the other general principles of EU law, such as the principle of proportionality (see, to that effect, judgment of 29 January 2008, Promusicae, C‑275/06, EU:C:2008:54, paragraph 68).” (para. 99)
In its decision, the CJEU takes a comprehensive look at the balancing of the different fundamental rights concerned. The complexity of Art. 17 of Directive 2019/790, which was criticized from different sides during the legislative process, turns out to be the key to the legality of the use of automated detection and filtering systems. It is this level of detail that ensures the protection of users' fundamental rights and helps Article 17 of Directive 2019/790 to be effective.
The German legislature, which has taken its transposition mandate seriously with the German Act on the Copyright Liability of Online Content Sharing Service Providers (UrhDaG) and passed a detailed law including the procedural requirements and procedural guarantees now emphasized by the CJEU, can feel vindicated.
Everything you need to know about the UrhDaG and the other contents of the German Act to Adapt Copyright Law to the Requirements of the Digital Single Market can be found in the legal handbook “Das neue Urheberrecht” (“The new copyright law” / Beck-Shop / Nomos-Shop).