Plugging the economic value gap

Ireland’s implementation of the much debated Article 17 of the new Copyright Directive

On 17 April 2019 EU Directive 2019/790 on copyright and related rights in the Digital Single Market (popularly known as the “DSM directive” or the “Infosoc Directive”) was adopted. The DSM Directive has been plagued by controversy from the outset particularly in relation to the fact that it regulates the use of works or other subject matter by online content-sharing service providers (OSPs).

The recitals suggest that OSPs have become the main source of access to a large amount of copyright-protected content uploaded by users, for example, Facebook and YouTube. The objective of Article 17 is to bridge the economic value gap between authors and performers and the OSPs by promoting licensing arrangement between the rights holders and the OSPs.

OSPs are defined as providers of an information society service of which the main or one of the main purposes is to store and give the public access to a large amount of copyright-protected works or other protected subject matter uploaded by its users, which it organises and promotes for profit-making purposes. Certain non-profit making OSPs are excluded from this definition including for example, not for profit online encyclopaedias and open source software providers.

Article 17 deals specifically with the “use of protected content by online content-sharing service providers”.  OSPs are required to seek authorisation in the form of licences where protected copyright works are communicated to the public or made available to the public.

Under the DSM Directive OSPs may now be held liable for infringement in cases where no authorisation has been obtained unless the OSP in question proves:

  1. It has made best efforts to obtain authorisation and
  2. It has made best efforts in accordance with high industry standards of professional diligence, to ensure the unavailability of a protected copyright work and
  3. It acted expeditiously upon receiving a sufficiently substantiated notice from the rightsholders, 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 in accordance with point b.


It appears that in order to meet these obligations, some OSPs (the tech giants) will be forced to implement mechanisms to filter out copyright protected works unless permission has been granted for use of the works. There is a carve out for smaller enterprises. Organisations less than 3 years old and who have a turnover of less than €10 million are only expected to make best efforts to obtain authorisation or upon receiving a sufficiently substantiated notice from the rightsholders, to expeditiously disable access to, or to remove from their websites, the notified works or other subject matter but they are not required to make best efforts to prevent future uploads of infringing works.

It is not clear what mechanisms have to be deployed by the OSPs. There is no definition of best efforts or high industry standards of professional diligence. The Commission is due to issue guidance on the application of Article 17 following dialogue with stakeholders.

Article 17 also imposes mandatory freedom of speech exemptions for user generated content that includes (a) quotation, criticism, review; and (b) use for the purpose of caricature, parody or pastiche.

So what does this mean for Ireland and the cluster of social media companies who call Ireland home.

France became the first member state to enact the Directive into French law. The new French law came into force in October 2019. France’s Culture Minister Franck Riester said that the text in the DSM Directive was absolutely essential for France’s democracy and the survival of an independent and free press. In September, Google announced that it would not pay publishers and will amend the way news is displayed on search engines in France. Google’s Richard Gingras reasoned that Google sells advertising, not search results and that this is why it does not pay publishers when people click on Google links in search results.

Meanwhile Ireland has not been so quick off the mark, but perhaps a very considered approach is necessary in circumstances that many of the high profile OSP’s have their European headquarters in Ireland.  The Irish Department of Business, Enterprise and Innovation is currently holding public consultations on implementation and this review is due to complete before the end of the year.  It will be interesting to see how the Government proposes to implement the requirement to plug the value gap. We understand at this stage that draft legislation could be published for comment as early as January 2020.

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