The current review of the EU copyright framework has raised an acute question about the liability of online platforms.
There is currently no single definition of an online platform, because there is a plurality of platforms and it is very difficult to find one single common denominator. There is nevertheless a common understanding that online platforms provide a marketplace for the clients to get together, joining different actors. Ebay for instance, provides the platform for buyers and sellers acting as an intermediary. Youtube is a platform, which enables users to upload digital content and others to watch it. To simplify the notion of platforms, a motor vehicle can also be seen as a platform connecting the sensors with other functions or a stock exchange, which serves as an intermediary for traders.
The eCommerce directive, currently in force, provides a limited liability for the platforms. The directive stipulates the notice and takedown procedure whereby the parties noticing illegal goods or content notify the intermediary and the platform has to react expeditiously by removing or disabling access to illegal content they host. Should the platform fail to act, it is liable for the infringement and the persons whose rights have been infringed can claim damages from the online intermediary. We could also compare a platform to a port that is not liable for illegal goods passing through it nor does it have to control all its clients. If, however, corresponding bodies indicate that there may be goods that need to be stopped, then the port must cooperate with these law enforcement agencies.
The users of platforms and the online hosts themselves are happy with the current liability regime, because it functions well. There are, however, two groups of stakeholders who are not satisfied – the creative industries and the sellers of luxury goods. These two groups would like the platforms to be fully liable, since it is easier to bring the platform to justice than to track down the actual provider of illegal content online. To give you an example: a counterfeit Louis Vuitton handbag is sold on Ebay. By the time Louis Vuitton notices and Ebay removes the illegal content, the handbag may very well be sold. In case the seller of the luxury goods can say that Ebay is responsible for checking the authenticity of the goods it sells, Louis Vuitton can easily claim damages from Ebay.
Since these two aforementioned groups are the loudest to voice their interests, and the copyright reform concerning creative industries is carried out in parallel, the voices demanding the full liability of the intermediaries and censorship of the content are getting louder. According to Article 13 of the draft proposal of the Copyright directive made by the European Commission, the platforms are obliged to use tools such as content recognition technologies. At the same time, it is important to keep in mind that the limited liability regime strikes the proper balance between the fighting with the illegal content and protecting the freedom of speech. The largest platforms and online intermediaries are not based in Europe, but in the United States, China and Russia. If we give these platforms too much freedom in deciding on the uploaded content (not only on the illegal content but also inappropriate content), don’t we ignore the fact that this is a real danger to the freedom of speech? Both China and Russia limit the content, which can be uploaded in their countries already without the users knowing it. Do we Europeans really want to follow suit? According to the current principles, the online platforms only provide the means to bring different parties together, the users are liable for the content and the platforms do not spy after their clients. This principle is turned up-side-down in the new proposal.
In my opinion we should rather discuss how to speed up the removing of content making the notice and takedown process work more effectively, should it be faulty, instead of changing the whole concept of liability. The European courts have also ruled that the preventive monitoring of the content by the platforms goes against the European data protection rules. The current rules stipulate that the rightsholders need to prove the illegal use of their content. According to the new rules, however, the burden of proof lies with the uploaders of the content, who need to show that their works do not infringe upon others’ rights. Should the platforms be made liable, they start mitigating their risks, which in turn endangers the freedom of speech and creativity. The proposed system lacks the possibility of an appeal, giving the platforms the right to arbitrarily decide on the content. As I mentioned before, most platforms are based in the USA, China and Russia and not in Europe.
Another aspect, important but often ignored, is that the authors, artists and performers are interested in the widest possible audience to read, listen to and watch their works. If the platforms start monitoring the content, the possibilities for the less known authors to reach the wider audiences are diminished considerably. It is also clear that the pre-monitoring will be carried out by software robots, which the larger platforms can afford, leaving aside parodies, critical reviews and remixes, which are in most cases allowed content according to the current copyright rules.
Nowadays’s audio-visual works are often created based on earlier works. Many authors of the videos play an important role in popularizing science. Hundreds of thousands of people who watch the videos thus participate in a lively cultural and study work, which is especially important for the younger generation using the platforms. Although this content is protected by copyright, it can be used for study purposes. The technology will not be able to differentiate between the two and will not allow uploading these videos in the future.
The question of liability has been raised based on the simple observation that the current business model enables the platforms to earn a lot of money, whereas the authors get little, thus creating the so called value gap. Making the platforms overtake the full liability for the content does not help us overcome the value gap. Why? Even in case the platforms bear full liability they would rather remove the content or disable users to upload it in the first place. The result for the author is that no one sees their work, which in turn further reduces the possibility to receive revenue.
Most platforms base their business model on advertising sales. Therefore, it is true that platforms earn lots of money for selling advertising and the concrete revenue depends on the number of users of the platforms and their content. When we compare the intermediaries whose revenue depends on the advertising sales with the ones who get their money from the user fees, there is an important difference between their functioning. In case of the platforms with user fees, such as Spotify, the authors’ fees are negotiated based on concrete performances. The platforms which earn their revenue with advertising sales cannot tie the advertisements with every song, because it would mean an overflow of advertising. Another interesting fact is that although people spend less money on streaming music in comparison with buying the CDs earlier, the money people spend on creative content has increased, because many want to see the performers live and the sales of concert tickets have gone up.
Speaking about the value gap we cannot deny that the Internet is a very important source of advertising sales and the authors are left out. This problem can be solved by talking about a fair distribution, at the same time accepting that peoples’ preferences about sharing and creating content have changed and the new habits cannot be forced in the old framework, proposed by the draft directive.
Every time we discuss copyright and the liability of platforms, people base their opinions on the concrete real-life examples. Generally these discussions are on large American platforms and the wish to limit their power. Although I understand this wish and the interrelated problems we have to bear in mind that when creating a rule to restrict a dominant player in the market, we also create rules which are favorable for the very same dominant player and no one else. The same applies to the Copyright article 13 in the proposed directive. I do not have a good solution to the value gap, but when adopting the proposed rules, we will only damage authors and smaller platforms (that may come from Europe), because we give them the ability to limit the freedom of speech and the expression of creative freedom.