Consequences of the DSM Directive OCSSP liability regime on DSPs active in the EU and the US(Coming)

This paper provides a legal assessment of costs and benefits of the online content sharing service providers’ (OCSSP) liability provisions in the Copyright in the Digital Single Market (DSM) Directive by way of comparison with the Digital Millennium Copyright Act (DMCA) in the US. Critical views are expressed towards implementing the definition of OCSSPs, liability of OCSSPs for copyright infringement, requirement for increased cooperation between OCSSPs and rightholders as well as special regime for “small and new services”. Analysis of DSM Directive’s benefits reveals that the OCSSP definition will cover large volumes of online providers, regardless of the technological development. Furthermore, these providers will face lower costs and risks to maintain their businesses. A higher number of start-ups will increase competitiveness in the OCSSP industry. Copyright holders will have more solid protection and more copyright holders will be likely to use products or services of larger platforms. However, unclear definition of OCCSPs might bring potential risks in the DSM Directive’s implementation phase, cause more problems with unclarity than in the US and lead to higher administrative and litigation costs in EU Member States. Moreover, the safe harbour policy might lower incentives of large platforms to innovate or provide low cost products.

We maintain that the OCSSP definition could have been more function-oriented and we recommend EU national legislators and courts interpreting these provisions to use less vague terms and take into account more factors when defining OCSSPs. Additionally, criteria for “small and new services” ought to be re-evaluated and incentives of large platforms should also be considered.

Forthcoming published in Journal of Intellectual Property Law & Practice