The question whether an online intermediary, such as a platform operator, can be held liable for illegal user content is at the center of the political debate: the European Commission’s proposal for a Digital Services Act, which replaces the exemptions from liability for online intermediaries for user content of the e-Commerce Directive, is at this very moment being discussed in the European Parliament. Just before these discussions, the European legislator adopted the Regulation on addressing the dissemination of terrorist content online (2021), Digital Services Market (2019), Audiovisual Media Services Directive (2018) and several soft law instruments which all deal with the liability of online intermediaries for (some) illegal content.

Against this background, it is not surprising that the CJEU’s judgment of 22 June 2021 in the YouTube (C-628/18) and Cyando (C-683/19) cases was highly anticipated. In this judgment the CJEU responded to a number of preliminary questions on the liability of platform operators for copyright-infringing user content.

COMMUNICATION TO THE PUBLIC

The first preliminary question aimed to clarify whether the video platform YouTube and the file-hosting and file-sharing platform Cyando had made a “communication to the public” of the content uploaded by their users in the meaning of article 3(1) of Directive 2001/29/EC (Copyright Directive).

The CJEU noted that several complementary criteria have to be taken into account to assess whether these platform operators have a “communication to the public”. One of those criteria is the indispensable role played by the platform operator and the deliberate nature of its intervention. Referring to its Pirate Bay judgment (2017), the CJEU found that the role played by YouTube and Cyando is indeed indispensable. However, according to the CJEU, this does not automatically mean that the intervention of the platform operator should be classified as “an act of a communication”.

Therefore, the CJEU concluded that (i) the role that such intervention by the platform operator plays in the communication made by the platform user and (ii) the deliberate nature of the intervention should guide the assessment on whether that criterion is fulfilled. While it of course remains up to the national courts to conduct this assessment, the CJEU provided some factors that the national courts should take into consideration:

• The platform operator does not intervene in the creation of content or view or monitor content before it is uploaded: The CJEU observed that neither YouTube nor Cyando intervene in the creation or selection of content uploaded to their platform by their users, and that they do not view or monitor content before it is uploaded as it is uploaded to that platform automatically.
• The platform operator informs its users in its terms of service that it is forbidden to upload IP infringing content: The CJEU noted that YouTube clearly informs its users in its terms of service and every time a file is uploaded that it is forbidden to post protected content in breach of copyright. In its Community guidelines, it also calls upon its users to respect copyright. The CJEU further noted that Cyando also informs its users in the conditions of use of its platform that users are prohibited from infringing copyright. Interestingly, this factor seems to be inspired by the due diligence obligations described in the proposal for a Digital Services Act (read more on the Digital Services Act). Article 12 of this proposal requires providers of intermediary services to include information on any restrictions that they impose in relation to the use of their service in respect of information provided by the recipients of the service in their terms and conditions.
• The platform operator warns its users that their account will be blocked in the event of repeated infringements: The CJEU stated that YouTube, when a video is blocked due to a report by the rightholder, warns the user who uploaded is warned that their account will be blocked in the event of repeated infringements. This is another factor that seems to have been inspired by the proposal for a Digital Services Act, and more specifically, article 20 which requires online platforms to suspend, for a reasonable period of time and after having issued a prior warning, the provision of their services to recipients of the service that frequently provide manifestly illegal content.
• The platform operator puts in place various technological measures to counter credible and effectively copyright infringements on its platform: The CJEU stated that YouTube had put in place various technological measures in order to prevent and put an end to copyright infringements on its platform, such as a notification button and special alert procedure for reporting and arranging for illegal content to be removed, as well as a content verification program for checking content and content recognition software for facilitating the identification and designation of such content. This factor brings article 27 of the proposal for a Digital Services Act to mind, which requires very large online platforms to put in place reasonable, proportionate and effective mitigation measures. Some requirements such as putting in place a notice and action mechanism (article 12) also apply to online platforms.
• The platform operator does not facilitate the illegal sharing of protected content or promote such sharing: YouTube processes the search results on its platform in the form of rankings and content categories and offers registered users an overview of recommended videos on the basis of videos already viewed by those users. The CJEU found that these rankings, content categories and overview of recommended videos are not intended to facilitate the illegal sharing of protected content or to promote such sharing.
• The platform operator’s financial model is not based on the fact that there is illegal content on it: The CJEU concluded that YouTube’s financial model does not seem to be based on the fact that there is illegal content on it or that the aim of that model is to encourage users to upload such content, or that the purpose or principal use of YouTube is the illegal sharing of the protected content. This despite the fact that YouTube derives advertising revenue from its platform and enables both users who have uploaded content and copyright holders to benefit from that revenue.

EXEMPTION FROM LIABILITY FOR HOSTING PROVIDERS

The second preliminary question aimed to clarify whether YouTube and Cyando could rely on the exemption from liability for hosting providers set out in article 14 of Directive 2001/31/EC (e-Commerce Directive).

The CJEU observed that if the platform operators make a “communication to the public” in the meaning of article 3(1) of the Copyright Directive of the user content, they cannot rely on the exemption from liability for that same content. Then, the CJEU continued with its analysis of the applicability of the exemption from liability to YouTube and Cyando.

The first step of the CJEU’s analysis was to evaluate whether the platforms’ activity is of a “mere technical, automatic and passive nature” (recital 42 of the e-Commerce Directive). The CJEU’s case law on how this requirement needs to be interpreted is limited. Up to now, the Google AdWords (2010) and L’Oréal/eBay judgments (2011) are still a guiding reference in this respect. In that case, the CJEU stated that an operator plays an active role if it has provided assistance which entails, in particular, optimizing the presentation of the offers for sale in question or promoting those offers. In the present judgment, the CJEU concluded that the platform operators do not play an active role on the basis of the factors used to assess whether the platform operators make a “communication to the public” and the fact that YouTube and Cyando do not “create, select, view or monitor” content uploaded to their platforms (which seems to overlap with the first factor).

The second step of its analysis focused on whether the platforms comply with the conditions of article 14 of the e-Commerce Directive.

The first condition is that (i) the provider does not have actual knowledge of the illegal activity or information and (ii) as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent. At the outset, the CJEU noted that this first condition cannot be regarded as satisfied solely on the ground that an online platform is aware, in a general sense of the fact that its platform is also used to share content which may infringe intellectual property rights. In relation to the fact that the platform operator may not have actual knowledge of the illegal activity or information in order to be able to rely on article 14 of the e-Commerce Directive in case of criminal proceedings, the CJEU noted that the operator can only have such knowledge if it has actual knowledge or if the illegality is apparent, ie specifically established or readily identifiable. In relation to the fact that the platform operator may not be aware of facts or circumstances from which the illegal activity or information is apparent in order to be able to rely on article 14 of the e-Commerce Directive in case of civil proceedings, the CJEU confirmed its earlier case law. According to this case law, it is sufficient that the platform operator, in one way or another, has become aware of facts or circumstances on the basis of which a diligent economic operator should have identified the illegality in question and a notification is a factor that national courts must take into account when determining whether the platform operator has acted as a diligent economic operator. However, the CJEU in this case also emphasized that such notification must contain sufficient information to enable the platform operator to satisfy itself, without a detailed legal examination, that the communication is illegal and that removing that content is compatible with freedom of expression.

The second condition of article 14 of the e-Commerce Directive is that the platform operator, upon obtaining knowledge or awareness, acts expeditiously to remove or disable access to the information. The CJEU did not make any observations in relation to this second condition.

INJUNCTIONS

The third question aimed to clarify in which case rightholders can obtain injunctions against platform operators. The CJEU ruled that article 8(3) of the Copyright Directive does not preclude a national law according to which a rightholder may not obtain an injunction against a platform operator whose service has been used by a third party to infringe their rights if that intermediary did not have knowledge or awareness of that infringement within the meaning of article 14 e-Commerce Directive. This would not be the case if that infringement had previously been notified to that platform operator and the latter did not act expeditiously to remove the content in question or to block access to it and to ensure that such infringements do not reoccur.

KEY TAKE-AWAYS

• Platform operators’ compliance with some of the due diligence obligations described in the proposal for a Digital Services Act is de facto used to assess whether they have performed an “an act of a communication to the public” and whether they qualify as a hosting provider in the meaning of article 14 of the e-Commerce Directive.
• If an online platform makes a “communication to the public”, it cannot rely on the exemption from liability of article 14 of the e-Commerce Directive.
• The CJEU seems to interpret the requirement that the platform operator’s activity is of a “mere technical, automatic and passive nature” to be able to qualify as a hosting provider in the meaning of article 14 of the e-Commerce Directive broadly.
• Platform operators must have due regard to the principle of freedom of expression when removing or disabling access to user content.
• A national law that prohibits a rightholder from obtaining an injunction against a platform operator if that platform did not have knowledge or awareness within the meaning of article 14 of the e-Commerce Directive is compatible with article 8(3) of the Copyright Directive.

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