EU DIRECTIVE ON COPYRIGHT IN THE DIGITAL SINGLE MARKET AND ISP LIABILITY: WHAT'S NEXT AT INTERNATIONAL LEVEL?

• Author: Curto, Natalia E.

The approval of the European Directive (EU) 2019/790 on copyright and related rights in the Digital Single Market has caused a considerable storm. Unlike the original draft, the final text provides for no general monitoring obligation. However, the ISPs will likely be required to implement filtering measures to avoid liability for unauthorized acts of communication to the public of copyright-protected works. The lack of harmonization of the Directive with existing laws in non-EU countries will negatively impact the ISPs. To limit these consequences, this Article proposes the signature of an International Treaty in the framework of WIPO including issues such as the role of the ISPs, the liability of the ISPs and safe harbors. As regards filtering measures, the proposed Treaty gives freedom to States to implement them. Any filtering should be specific, limited, must not impose substantial costs on ISP or substantial burdens and be subject to human review.

CONTENTS I. Introduction 86 II. New Obligations for the Internet Service Providers (ISP) Provided Under the EU Directive on Copyright 87 A. EU Directive on Copyright 87 1. Current EU Approach to ISP Safe Harbors 88 2. What the Directive Changes 89 B. The EU Directive Conflicts with ISP Safe Harbors in Other Countries 93 1. United States 93 2. Australia 94 3. Canada 95 4. China 97 C. Need for an International Approach to the Issue 98 1. Lack of Harmonization Poses Difficulties to ISPs 98 2. Impact of the EU Directive on Copyright on International ISPs 99 III. Proposing a Solution: Signature of a Multilateral International Treaty in the Framework of WIPO 100 A. General Guidelines and Text of the Proposed Treaty 100 1. Text of the Proposed WIPO Treaty 100 2. Explanation of the Treaty Key Provisions 104 B. Reasons for Adopting the Proposal 106 1. Harmonization 106 2. Economic Utility 107 3. Improvement of the Copyright System Enforcement 107 IV. Responding to Potential Criticisms of the Proposal 108 A. The Proposed International Treaty is not Political Feasible 108 B. The Suggested Treaty Does Not Balance the Interests of the Actors Involved in the World of Internet 109 V. Conclusion 110 I. INTRODUCTION

"Europe just approved new copyright rules that could change the internet." (1) This was one of the many article titles published by news outlets throughout Europe and the United States in September 2018. These articles announced amendments introduced within the Proposal of Directive on Copyright in the Digital Single Market approved by the European Parliament. (2) The article titles led some to imagine the end of the internet as previously known, with particular negative implications to the U.S. tech giants like Google, Facebook, and Youtube.

The proposed Directive faced strong criticism as soon as it was published. (3) One of the most controversial provisions included was the obligation of the Internet Service Providers (ISPs) to filter the content uploaded by the platform's users to avoid copyright infringements. (4) However, this provision was later removed in the final version of the Directive. (5) Even so, the Directive still assigns an active role in preventing copyright infringement to ISPs--limiting the applicability of safe harbors in case ISPs fail to obtain authorizations from the copyright owners. (6)

It seems clear that with the Directive, the EU has a specific European regime as far as ISPs liability and safe harbors are concerned. This new regime seems to be in contrast with the existing legislation and practice in jurisdictions outside the EU. This lack of harmonization will most likely cause damages to the ISPs operating on a worldwide scale. (7) Indeed, ISPs will have to implement a variety of technical methods and legal strategies to approach these differences. Thus, they will probably be inclined to reduce the number of their investments, abandon ventures, or not commence operations in markets where burdensome obligations are imposed. Consequently, the local and global economy would be harmed.

This Paper proposes that States adopt a Multilateral International Treaty within the World Intellectual Property Organization (WIPO). The Treaty should provide minimum, standard, and reasonable obligations for ISPs concerning the protection of copyright. It should also implement a uniform ISPs liability regime with the same minimum safe harbors for all ISPs, regardless of where they are located.

Part I of this paper provides an overview of the current EU safe harbors applicable to ISPs. It then focuses on ISPs' obligation to get authorizations from the copyright owners and the liability of ISPs in the absence of such authorizations. Moreover, the Paper analyzes ISPs' liability, safe harbors, and filtering obligations in non-EU countries. Finally, Part I suggests that an international harmonized approach is therefore needed to overcome differences in the domestic legislation of EU and non-EU countries. Part II proposes a solution to the problem through the negotiation and adoption of an International Multilateral Treaty. Part III addresses the potential criticisms of the proposal.

2. NEW OBLIGATIONS FOR THE INTERNET SERVICE PROVIDERS (ISP) PROVIDED UNDER THE EU DIRECTIVE ON COPYRIGHT

   The Directive aims at modernizing EU copyright rules, achieving a fully functioning Digital Single Market, and closing the so-called "value gap" between internet platforms and copyright holders. (8) The definitive text of the Directive introduces specific obligations for the ISPs as well as a particular liability regime for ISPs in case they do not get the required authorizations from the copyright holders. Part I explains the problems created by the new European provisions from an international perspective.

   1. EU Directive on Copyright

      The Directive assigns an active role to ISPs as far as prevention and enforcement of copyright infringement are concerned. This perspective seems to be a growing trend at the international level. Since the middle of 2007 entertainment industries, government legislators, and regulatory agencies increasingly have been pressuring ISPs to play a more active role in preventing copyright infringement exante. "Well-organized copyright industry associations have effectively lobbied governments worldwide, convincing public authorities that greater enforcement efforts are needed to combat online copyright infringement." (9)

      Despite this growing trend, many countries of the world do not grant such an active role to ISPs or provide safe harbors that differ from the EU safe harbors. As highlighted above, the differences among the domestic legislation on ISPs' enforcement police powers, liability, and applicability of safe harbors, create a problem for the ISPs operating at the international level. Therefore, this Paper encourages an international harmonized approach to these issues.

      1. Current EU Approach to ISP Safe Harbors

         In the EU, safe harbors for ISPs are regulated under the E-commerce Directive (10) and more specifically in the transposing laws in each Member State. (11) Safe harbors prevent ISPs from being liable provided they meet the requirements applicable to each particular safe harbor. (12) In the E-commerce Directive, safe harbors regard ISPs exemption from liability for "mere conduit" (13), "catching", (14) and "hosting." (15)

         The Copyright Directive reaffirms the non-applicability of the safe harbor for hosting activities provided under article 14 of E-commerce Directive when "the recipient of the service is acting under the authority or the control of the Article 13 provider." (16) Indeed, section 17.3 of the Copyright Directive provides that the safe harbor for hosting will not apply to the situations covered by the article when an ISP performs an act of communication to the public or an act of making available to the public. On the other hand, as it will be discussed below, it can be argued that Article 17.4 provides for a new specific safe harbor with different requirements based on the size of the ISP involved.

      2. What the Directive Changes

         The proposed Directive obligates Member States to ensure that online content sharing service providers (17) perform either an act of public communication or an act of making available to the public access to copyright-protected works or other protected subject-matter uploaded by its users. Thus, the Directive obliges ISPs to get authorization from the right holders. If no authorization is granted, they will be liable for unauthorized acts of communication to the public, unless they demonstrate having fulfilled the conditions under section 17.4. No general filtering obligations are provided in the approved version of the Directive. These provisions will be further discussed below.

         1. Proposed Obligation to Obtain an Authorization from the Right Holders

            As highlighted above, under section 17.1 of the Directive, the ISPs' main obligation is to get authorization from the right holders referred to in Article 3(1) and (2) of Directive 2001/29/EC [hereinafter InfoSoc Directive] (18) in order to communicate or make available to the public works or other subject matter. They can do that, for instance, by concluding a licensing agreement. Thus, it is expected that ISPs:

            [W]ill negotiate a license rate with major rights holders... to compensate owners for potentially infringing uploads. But for the many other uploads where the rights holder is unknown, service providers will be required to carry out a "best efforts" diligent search for a rights holder to request a license or be liable for infringement. (19) The difficulties for the implementation of these licenses are clear. This is especially evident in the determination of the price of the license and how to prove that best efforts were used to identify and get the license from the right holder.

            Section 17.1 poses another problem concerning the identification of the users whose acts must be included or not in the authorization by providing an...