Germany's draft proposal for the implementation of the Copyright Directive under fire

By Emmanuel Legrand

Germany's trade organisations VUT, representing independent music companies, and DMV, the German music publishers' association, have criticised the latest draft of the Copyright Directive presented by the Federal Ministry of Justice and Consumer Protection. The Directive, adopted in September 2018 by the European Parliament, has now to be transposed into national law by European Union members states.

  VUT and DMV's main point of contention about the draft concerns the Ministry's interpretation of Article 17 and how it would be transposed into German law. Article 17 addresses the issue of the liability of online content-sharing service providers for copyright-infringing content uploaded by their users. The Directive calls for DSPs to make “best efforts” to secure licenses from rights holders. If they don't, the can be found liable for infringing content.

  The two organisations take issue with the introduction of a new exemption, not written in the initial Directive, for non-commercial "'minor uses" such as 20 seconds of film/audio, 1,000 characters of text, or one image with a data volume of up to 250 kilobytes in an uploaded work. If implemented, such exemption would prevent rights holders to claim remuneration for the use of content on such platforms as TikTok.

Undermines the market

  "Notably, neither the Directive nor German Copyright law provides for such a de minimis exception," noted JD Supra, in a long analysis of the draft proposal. The new exemption was criticised by the Motion Picture Association. For Christof Ellinghaus, owner of independent label City Slang, authorising exemptions for 20s snippets of music "undermines the regular license market."

  Another provision in the German draft that was not part of the original Directive concerns flagging. According to the draft, users are enabled to flag their content as (i) contractually authorised or as (ii) authorised based on copyright exemptions, if such content is identified to them as blocked content. "If content is flagged, the provider is not obligated to block or remove content unless the flagging is obviously incorrect," analysed JD Supra, adding: "Unlike any other national proposal presented so far, the Draft Act introduces a user flagging regime that frees Providers from their blocking and removal obligations under certain circumstances."

  On the issue of licensing, the draft proposal goes beyond the Directive, as it imposes a unilateral obligation on online service providers to contract with representative rights holders. "Effectively, online service providers will have to accept licenses available through a collecting society or a major rights-holder under certain conditions such as the appropriateness of the requested remuneration," wrote JD Supra.

Going against the meaning of the Directive

  The VUT and DMV wrote in a joint statement that the Ministry's proposal fails to "adequately implement the meaning of the Directive, which is to effectively oblige large platforms to conclude license agreements and to enable rights holders to negotiate on an equal footing."

  They added that "some of the regulations in the proposed draft contradict the direction decided by Europe and instead reflects a specific German vision of the implementation."

  For JD Supra, it "remains to be seen whether the Ministry will be open to another review round in case the stakeholders now express concerns and criticism in view of the revised Draft Act. As the new Provider liability is to enter into force on June 7, 2021, stakeholders may not only use this last opportunity to plead their case before the legislator. Stakeholders may also want to review their business model for compliance with the upcoming changes and to monitor forthcoming opportunities for licensing and content-protection closely."