German Copyright Case Could Change the Rules for Tech Giants

A copyright infringement lawsuit against Alphabet Inc. in Germany could dismantle claims by tech giants that they’re not subject to the same regulations as legacy media.

Attorneys say the case before Germany’s highest court underscores a developing trend: that arguments traditionally used by U.S. tech companies to avoid liability for infringing material they host may be weakening.

“They’re not just mere service providers anymore, because they make recommendations and they have newsletters in which they promote third-party offers as well as their own,” Tobias Bier, a partner with BBS law firm in Hamburg, who specializes in copyright and media law, told Bloomberg Law.

“eBay, YouTube, Facebook—they’re not just mere technical platforms anymore where you can host your user-generated content,” he added.

The case comes as debate has intensified in recent years over social media’s responsibility for policing content—especially in Germany, attorneys told Bloomberg Law. A shift toward greater accountability in Germany already has begun, with Facebook, Twitter and other sites facing heavy fines if hate speech found on their platforms is not immediately deleted.

Questions of Liability

German music producer Frank Peterson claims YouTube and its parent company, Alphabet’s Google, are liable for damages for providing anonymous users a platform to post bootlegged concert footage online, Peterson’s lawyer, Jens Schippmann, told Bloomberg Law.

YouTube in 2008 deleted private recordings of a Sarah Brightman concert; in which Peterson holds the rights to the songs that were performed. But new posts of her concert continued to pop up as she continued her tour that winter, according to court documents.

YouTube and Google, which declined to comment on ongoing litigation, argued in court documents that the uploader alone is responsible for the infringement. They said they have no obligation to pay damages for user-generated content posted anonymously, since they’re merely service providers.

Service providers under European and German law are not required to monitor the information they transmit or store, or investigate supposed illegal activity, attorneys told Bloomberg Law.

But lower courts in Hamburg, where the suit was filed, contend YouTube and Google are no longer such providers. The tech giants should block an illegal post immediately once notified and take precautions to prevent further future infringement, the courts ruled. While the tech giants aren’t liable for damages, as they didn’t post the videos themselves, they are liable for o controlling content and reporting infringers to authorities, court rulings found.

YouTube and Google appealed to have the claim dismissed, and Peterson appealed to seek damages and learn who posted the content. The German Supreme Court, which heard oral argument (I ZR 140/15) May 9, will issue a decision Sept. 13, according to court documents.

No Longer Just Service Providers

YouTube originally was a platform exclusively for users. But its branded content by entertainment goliaths such as Universal and Sony, and its offerings of original productions, prove it’s no longer a modest service provider, Schippmann, a Hamburg-based attorney specializing in music and entertainment copyright law, told Bloomberg Law.

“YouTube says that the internet should be anonymous and assumes that the uploader is the rightsholder. We say that’s not the case—my client is the rightsholder,” Schippmann said. “We expect that YouTube will take more responsibility regarding the uploads of anonymous users, or whatever isn’t from the rightsholder. YouTube has all this information and they have to think about what they stream, and what not to.”

Marcus Nothhelfer, a partner and certified media and copyright lawyer with ARQUIS law firm in Munich, told Bloomberg Law that such a change might be necessary for the future regulation of media giants. But “as a matter of fairness for modern digital business models, I clearly think it should not be up to courts and judges alone to define” legal rules of responsibility and liability, he said.

German courts “developing their own case-law concept aiming to treat technical platforms and access providers more and more like perpetrators and accomplices simply because they might have been able to stop an infringement, but acted too slow, too insufficiently or too passively, is unsatisfactory,” Nothhelfer added.

Legislation would be a better solution “since enormous financial investments are at stake and commercial players require reliable legal framework,” he said.

Debate Continues

Bier said the German YouTube copyright case is another “cornerstone” in changing the legal definition of such platforms from service providers to full-on media companies liable for the content they spread.

“There are many voices on the side of Google and YouTube that are crying out in fear and saying this is the end of user-generated content on the internet—I wouldn’t say that’s the case,” he said. “It will probably not do Google too much harm to integrate a filter system that filters out content that they need to blacklist anyway if somebody claims and substantiates infringement of his or her rights.”

The current case won’t likely be the ultimate legal push to change the definition of tech giants’ offerings to those of media companies, Bier said. But it’s another step toward finding legal harmony.

“With each and every decision being made, we get closer,” he said.