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30 June 2022

Controversial Article 17 in Polish case C-401/19

Ever since the Directive on Copyright in the Digital Single Market (the "Directive") was adopted back in April 2019, its contents, especially regarding the liability of certain service providers, have sparked many controversies. According to the explanations provided by the European Council, the Directive's main goal was to protect press publication and reduce the "value gap" between the profits made by two main "entities": internet platforms and content creators. The Directive aimed to enhance collaboration between these two groups and to create copyright exceptions for text- and data-mining. However, Article 17 of the Directive proved difficult to accept within the internet sharing platform environment, as it replaces the "mere conduit" exemption from copyright infringement of online content sharing of the platform with a conditional exemption. Article 17 prohibits internet platforms from sharing and displaying unlicensed copyrighted contents on behalf of users.

To avoid liability, online service providers must obtain authorisation from the rightholders and content creators (e.g. a licensing agreement). In the absence of such authorisation, service providers will be held liable for the infringing content unless they are able to prove that they (i) made best efforts to obtain the abovementioned authorisation, (ii) made, in accordance with high industry standards of professional diligence, best efforts to ensure the unavailability of specific works and other subject matter for which the rightholders have provided the service providers with the relevant and necessary information, and (iii) acted expeditiously, upon receiving a sufficiently substantiated notice from the rightholders, to disable access to, or to remove from their websites, the notified works or other subject matter, and made best efforts to prevent their future uploads.

Back in May 2019, Poland raised its concerns and brought an action for the annulment of Article 17 of the Directive before the Court of Justice of the European Union (the "Court"). In principle, the main issue before the Court was the validity of the preventive measures required by Article 17 as described in items (ii) and (iii) in fine in light of the general and universal right to freedom of expression and information. In its plea, Poland referred to Article 11 of the Charter of Fundamental Rights of the European Union ("Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers"), as well as its Articles 52 and 53 stipulating that any limitation to the right of freedom of expression may be introduced only if it is absolutely necessary and genuinely meets objectives of general interest recognised by the European Union or the need to protect the rights and freedoms of others.

Moreover, in order to comply with Article 17, service providers must use IT tools which enable the prior automatic filtering of that content. By de facto imposing such preventive monitoring measures on online content-sharing service providers, without providing safeguards to ensure that the right to freedom of expression and information is respected, it is claimed that the contested provisions constitute a limitation on the exercise of that fundamental right, which respects neither the essence of that right nor the principle of proportionality and which cannot, therefore, be regarded as justified. Such measures would lead to over-blocking of the user content, which can only be restored if the given user decides to file a complaint and seek redress.

The Advocate General, H. Saugmandsgaard Øe, issued an opinion according to which the case should be dismissed. The Advocate General advised that the correct interpretation of Article 17 should lead to the conclusion that service providers cannot preventively and systematically block content falling within, inter alia, the scope of the exceptions and limitations to copyright. They must take into account, ex ante, respect for users' rights.

On 26 April 2022, the Court dismissed the action brought by Poland. The Court's main arguments for the dismissal are as follows:

  • Article 17 forms a new liability regime and, as such, cannot be annulled only partially.
  • Even though the filtering mechanisms may limit the freedom of expression, the Court noted that such freedom is not absolute and its exercise can be restricted under certain conditions and provided that the principle of proportionality is respected.
  • As regards the obligation to take measures to ensure that copyright is complied with when services are used, it may even prove necessary – in order to respect the freedom of those service providers to conduct a business, guaranteed in Article 16 of the Charter, and to respect the fair balance between that freedom, the right to freedom of expression and information of the users of their services, enshrined in Article 11 of the Charter, and the right to intellectual property of the rightholders – to let those service providers determine the specific measures to be taken to achieve the result sought. It is the service providers who should choose what to put in place, which measures are best adapted to the resources and abilities available to them, and which are compatible with the other obligations and challenges.
  • The Directive does not affect the "legitimate uses", as online service providers should inform their users in their terms and conditions that they can use works and other subject matter under exceptions or limitations to copyright and related rights provided for in European law.

The judgment will definitely have a big impact on the future obligations of service providers. The main result of the judgment is that Article 17 contains sufficient guarantees to ensure a good balance between the protection of intellectual property rights and the right to freedom of expression and information. As a result of the judgment, Member States when implementing the Directive will now need to ensure that service providers have enough guidance in the local legal provisions to be compliant with Article 17.

author: Daria Rutecka