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ICMP Submission in response to the European Commission public Public consultation on the future of electronic commerce in the internal market and the implementation of the Directive on electronic commerce (2000/31/EC)

I am writing on behalf of ICMP (International Confederation of Music Publishers) ICMP is the international umbrella trade association representing the interests of the globalmusic publishing community. The constituent members of ICMP are classical and popularmusic publishers’ associations from Europe, the Middle East, North and South America, Africaand Asia-Pacific. Included are the leading independent international, regional and nationalmusic publishers, mainly SMEs, throughout the world, as well as the four multinational musicpublishing companies.

ICMP is grateful for the opportunity to participate in the European Commission Public Consultation on the future of electronic commerce in the internal market and the implementation of the Directive on electronic commerce.

This submission answers solely the questions relevant to ICMP’s activities and experience.

36. In your view, does the purchase and sale of copyright protected works subjectto territorial rights and the territorial distribution of goods protected by industrialproperty rights, encourage or impede cross-border trade in information societyservices?

The territorial nature of copyright as recognized for centuries in national and international law neither encourages nor impedes cross border trade. What matters is to create an environment where competing cross border licensing schemes can be further developed for the benefit of rightholders, users and consumers alike. The 2005 Recommendation as well as the CISAC decision in more than one respect have helped the development of pan European licensing models that would not have seen the light of day otherwise. Even if copyright territoriality were to be re-considered, this does not mean that service providers would then effectively provide services in every country of the European Union if it did not make sense to them commercially. In the field of music publishing, extensive voluntary use of collective licensing is the norm. In our view, it is now time for Europe to promote transparency and good governance of collecting societies according to common standards so as to promote a level playing field and comparable levels of services, accountability and efficiency of societies in the interest of users, consumers and rightholders alike.

The on line environment requires flexibility and agility in licensing. Many new experimental services do not squarely fit into licensing schemes pursued by some societies. It is our view that users are not only interested in a low number of transactions, but also in speed, flexibility of mandates, granularity of repertoire, transparency of repertoire so as who owns it and can license it for any combination of territories to unleash the full potential of new business models.

The issue of transparency obviously includes that of transparency of repertoire. It is crucial to create a data-base of right ownership information or at least interconnect existing data-bases in the short term to ensure fairness in licensing and re-distribution of royalties. ICMP strongly supports the idea of accurate information on right ownership being put together. Any such data-base should be publicly available, and not be proprietary and achieve a level of accuracy beyond the current. It should provide transparent information and services to users that may wish to license all or just part of the available repertoire. This could be effectively achieved through the Global Repertoire Database project.

52. Overall, have you had any difficulties with the interpretation of the provisions on the liability of the intermediary service providers? If so, which?

Recital 50 of the e-commerce Directive highlights the important interrelation between this Directive and the Directive on copyright and related rights in the information society “with a view to establishing a clear framework of rules relevant to the issue of liability of intermediaries for copyright and relating rights infringements at Community level.”

Despite its objectives, when it comes to the provisions on the liability of intermediary providers, the Directive has had unexpected and unwanted results, namely:

  • The safe harbor provisions seem to have worked as a disincentive instead of an incentive for ISPs to cooperate. There has not been much voluntary cooperation between ISPs and content providers because the former have often raised their fear that by cooperating they might lose their intermediary status and the exemption from liability dependent on that status. It is a fact that huge amounts of pirated/illegal digital content are transmitted through ISPs’ networks on a daily basis.
  • Even though the Directive expressly refers to service providers’ duty to act, under certain circumstances, with a view to preventing or stopping illegal activities, in practice no meaningful preventative or proactive action has taken place and rightholders only recourse has been the courts. [1]
  • Another unwanted consequence is that illegal online services have claimed the benefits of the safe harbor provisions of the Directive as “mere conduit”, “caching providers” or “hosts” While unlawful services have not, in general, benefitted from the liability privilege because they have been held to directly or indirectly facilitate the infringement or to induce it or were denied immunity because they were considered to have knowledge of the infringing content hosted on their servers, their claims have unduly prolonged court cases and delayed redress for rightholders. It would be advisable to clarify the scope of application of the Directive so as to avoid such pathology and delays to occur.[2]
  • The definition of what constitutes actual knowledge, the absence in some countries of a reference to constructive knowledge and the absence of the notion of expeditiousness have greatly affected the practical value of the rules as established in the Directive.
  • The criteria aimed at distinguishing between service providers who can and service providers who cannot benefit from the exemptions are different from country to country and often within the same country. The key question remains the degree of involvement of the service provider with the content they transmit or store. The issue is further complicated by the increasingly complex and mixed nature of service providers ‘activities.
  • Even though there are clear rules in the e-commerce Directive and in the copyright Directive on the continued availability of injunctive relief irrespective of liability, the two have often been confused even though ISPs are undoubtedly the best placed to stop or prevent further infringement.

53. Have you had any difficulties with the interpretation of the term "actual knowledge" in Articles 13(1) (e) and 14(1) (a) with respect to the removal of problematic information? Are you aware of any situations where this criterion has proved counter-productive for providers voluntarily making efforts to detect illegal activities?

We feel that the actual knowledge requirement, if badly implemented or interpreted can in fact become a hiding place for reluctant ISPs. In Spain, implementing legislation substituted the notion of actual knowledge with that of effective knowledge to be obtained via an undefined competent authority declaration that the data is unlawful or an order for its removal or the blocking of access to it.

Confusion and contradictory case law triggered in the end two successive Supreme Court decisions in December 2009 and May 2010, giving more flexibility to the “effective knowledge” requirement. In its judgment of 9 December 2009, the Spanish Supreme Court established that “effective knowledge” had to be interpreted more broadly in order to be in compliance with the Directive and that therefore effective knowledge could also take place when the ISP was informed through “other sources of effective knowledge” apart from the official notification procedure, following article 16 of the Spanish law[“(...) without prejudice to other means of effective knowledge that may be established”]. This Judgment of the Supreme Court also seems to reintroduce the notion of constructive knowledge that is absent from the Spanish implementation of the Directive when it states that an interpretation favourable to the Directive gives equal value to the effective knowledge and to the “knowledge that can be obtained by the service provider from facts or circumstances that can permit an effective understanding of the reality in question even if it has to be through logical inferences that are within anybody’s grasp”.

In France, the law provides for a specific notification procedure in order to establish “effective knowledge”. In almost all cases, knowledge is only accepted if the statutory procedure has been complied with. Courts have denied knowledge where the specific procedure had not been followed, even in cases in which it was obvious that a particular website was directed at enabling access to copyrighted content without the authorization of the rights owners[3].

A clarification from the European Commission as to the meaning of “actual knowledge” would be welcomed.

54 -Have you had any difficulties with the interpretation of the term"expeditious" in Articles 13(1)(e) and 14(1)(b) with respect to the removal ofproblematic information?

It is essential for right holders to be able to have the illegal content taken down expeditiously once it has been identified since infringements on the internet can cause immense damage in a very short period of time. Expeditious must therefore be interpreted in a way which is meaningful in relation to the internet medium. The Directive especially provides in its article 13(1) (e) and 14(1) (b) that upon obtaining actual knowledge (or awareness of facts and circumstances in art.14), the provider has to act expeditiously to remove or disable access to the information it has stored or hosted.

There are some problems regarding these articles in countries in which the Directive has been implemented deficiently on this point such as Italy and Spain.

In Italy, the Legislative Decree implementing the Directive requires service providers to act expeditiously to remove or to disable access to the information only upon notice from the “relevant authorities”. This requirement hinders ISPs’ cooperation to take down infringing files.

In Spain, the Ley 34/2002 de servicios de la sociedad de la información y de comercio electrónico of 11 July 2002 has not made any reference to the fact that the removal or disabling of access to the information should be done “expeditiously”. This omission combined with the requirement of “effective knowledge” instead of “actual knowledge” and the absence of reference to constructive knowledge in Spanish Law go against the provisions of the Directive according to which illegal information has to be removed expeditiously. Indeed, one could say that the Law as it stands specifically allows ISPs NOT to remove illegal content expeditiously.

56. What practical experience do you have regarding the procedures for notice and take-down? Have they worked correctly? If not, why not, in your view?

These procedures can only work properly if they are not too cumbersome and if ISPs are encouraged to react immediately and if they were shielded from liability for wrongful take down where they acted upon wrongful notification. It is reasonable to believe that where specific cumbersome procedure applied, sometimes along with requirements of orders or decisions by public authorities as a prerequisite for take down, such procedures may have been put into place also because of fears by ISPs of being held liable for expeditious but wrongful takedown, upon notification.

It goes without saying that in any event, notice and take down has no effect whatsoever in relation to sites structurally conceived to infringe or induce infringements. These sites are often also deficient in relation to other requirements under the Directive, such as the requirements listed in article 5 of the Directive. It should be made clear that services and sites that do not obey by the rules cannot benefit from the very laws they are breaking, in other respects. As explained further below, it is not uncommon for illegal service providers to try and claim the application of the exemptions from liability as per articles 12-14 of the e-commerce Directive.

57. Do practices other than notice and take down appear to be more effective? ("Notice and stay down”, "notice and notice" )

As illegal content, links or torrents are often re-uploaded, it should be clear that notice and take down means content should stay down and that cooperation and pro-active, preventive measures should be implemented. Proactive measures, such as content recognition, notice and stay down etc are by far more effective.

58. Are you aware of cases where national authorities or legal bodies have imposed general monitoring or filtering obligations?

No, we are not aware of any such cases, though we feel that ISPs may be confusing at times the relevant provision in the Directive with their duty to assist in preventing and stopping illegal activities. There is one pending case, now before the ECJ, where the Brussels Court of First Instance ordered filtering in relation of SABAM repertoire.

The E-commerce Directive explicitly provides that “[t]he limitations of the liability of intermediary service providers established in this Directive do not affect the possibility of injunctions of different kinds; such injunctions can in particular consist of orders by courts or administrative authorities requiring the termination or prevention of an infringement, including the removal of illegal information or the disabling of access to it.” (Recital 45, emphasis added)

The Directive also makes clear that “Member States are prevented from imposing a monitoring obligation on service providers only with respect to obligations of a general nature; this does not concern monitoring obligations in a specific case and, in particular, does not affect orders by national authorities in accordance with national legislation.” (Recital 47, emphasis added)

Recital 40 adds that “(…) the provisions of this Directive relating to liability should not preclude the development and effective operation, by the different interested parties, of technical systems of protection and identification and of technical surveillance instruments made possible by digital technologywithin the limits laid down by Directives 95/46/EC and 97/66/EC.”

It should also be noted that ISPs already use filtering techniques and similar network management technology to deal with malware, spam, cyber attacks etc and generally to allow for bandwidth allocation and management.

59. From a technical and technological point of view, are you aware of effective specific filtering methods? Do you think that it is possible to establish specific filtering?

At present, effective specific filtering methods exist such as content recognition technologies. Indeed, fingerprinting or watermarking technologies, to name just a few, permit the identification of specific copyrighted content through automatic filtering that is based on the special characteristics of the files.

Content-recognition technologies are one of the significant tools to fight against digital piracy

60. Do you think that the introduction of technical standards for filtering would make a useful contribution to combating counterfeiting and piracy, or could it, on the contrary make matters worse?

In view of the constant technological progress that is being made, we do not think that, at present, specific standards for filtering should be mandated for filtering as any such move would risk hindering innovation and competition.

Content recognition technologies are one essential tool to identify illegal content and should be implemented on a large scale in order to fight digital piracy. Their main advantage is that they permit to deal with illegal content in the same way as technical tools to filter out spam, viruses and other malware, that is, automatically and without compromising privacy.

62. What is your experience with the liability regimes for hyperlinks in the Member States?

Austria, Hungary, Portugal and Spain have introduced specific rules on liability of providers of hyperlinks and of search engines. However, the legal regime governing providers of hyperlinks and search engines in these countries does not follow a similar pattern. Austria considers search engines as “mere conduit” and hyperlinks providers as “hosts”. Hungary extends the provision on hosting only to search engines. When it comes to Spain and Portugal they treat search engines and providers of hyperlinks as “host providers”[4]. In Spain, the assimilation of search engines and hyperlinks to hosting suffers from the same shortcomings as the hosting provision. As a consequence, some operators linking to illegal content on P2P Networks have been exempted from liability by Courts following a strict interpretation of the “effective knowledge” requirement, for example.[5]

64. Are you aware of specific problems with the application of the liability regime for Web 2.0 and "cloud computing"?

There is no doubt in our mind that cloud computing will increasingly pose difficult legal issues because of the way it operates and the difficulties in detecting the origin of files. We feel that a debate with all relevant stakeholders and further reflection on this evolving technology is necessary.

66. The Court of Justice of the European Union recently delivered an important judgment on the responsibility of intermediary service providers in the Google vs. LVMH case. Do you think that the concept of a "merely technical, automatic and passive nature" of information transmission by search engines or on-line platforms is sufficiently clear to be interpreted in a homogeneous way?

No, we do not think that notion to be particularly clear either in the case referred to here or generally.

67. Do you think that the prohibition to impose a general obligation to monitor is challenged by the obligations placed by administrative or legal authorities to service providers, with the aim of preventing law infringements? If yes, why?

No. The prohibition to impose a general obligation to monitor is not challenged by the obligations placed by administrative or legal authorities to service providers, with the aim of preventing law infringements.

The Directive explicitly provides that “service providers have a duty to act, under certain circumstances, with a view to preventing or stopping illegal activities” and promotes the “development of rapid and reliable procedures for removing or disabling access to illegal information” to be developed, and encouraged by Member States, on the basis of voluntary agreements.(Recital 40) However, in practice, very few voluntary agreements have taken place between ISPs and right holders. The latter have therefore had to resort to others provisions of the Directive enabling them to ask for injunctions in order to protect their businesses.