On Upload-Filters and other Competitive Advantages for Big Tech Companies under Article 17 of the Directive on Copyright in the Digital Single Market

Author:Thomas Spoerri
Position:Attorney-at-law, LL.M. in Law, Science and Technology (Stanford)
Pages:173-186
SUMMARY

Article 17 of the Directive on Copyright in the Digital Single Market (DSM), with its goal to close the so-called "value-gap", contains several strong incentives to use and further develop filtering technologies. It also introduces a direct liability regime, which puts content-service sharing providers (CSSPs) at risk if they do not successfully implement upload-filters as it is only in exceptional situations that CSSPs will not be required to use these filters. Thus, article 17 DSM leads to a situation where nearly any... (see full summary)

 
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On Upload-Filters and other Competitive Advantages for Big Tech Companies
2019
173
2
On Upload-Filters and other Competitive
Advantages for Big Tech Companies
under Article 17 of the Directive on
Copyright in the Digital Single Market
by Thomas Spoerri*
© 2019 Thomas Spoerri
Everybody may disseminate this ar ticle by electronic means and make it available for download under the terms and
conditions of the Digital P eer Publishing Licence (DPPL). A copy of the license text may be obtain ed at http://nbn-resolving.
de/urn:nbn:de:0009-dppl-v3-en8.
Recommended citation: Th omas Spoerri, On Upload-Filter s and other Competitive Advanta ges for Big Tech Companies under
Article 17 of the Direct ive on Copyright in the Digital Single Market, 10 (20 19) JIPITEC 173 para 1.
Keywords: Upload-Filters; Article 17; Directive on Copyright in the Digital Single Market; Directive (EU) 2019/790;
Value Gap; Proactive monitoring obligations; Filtering Obligations; EU Copyright; Copyright
will not have access to upload-filters. However, due
to the technological limitations of upload-filters, even
the most sophisticated filtering tools will most likely
lead to an important number of false positives, which,
in turn, will cause the over-blocking of a substantial
amount of non-infringing content in the EU. These
false positives will have to be reviewed by humans,
since maintaining an effective and expeditious com-
plaint and redress mechanism is required by article
17(9) DSM. The requirements of having an efficient
upload-filter as well as human review of false pos-
itive cases will have an adverse financial impact on
the big tech companies, but it is the small and mid-
sized CSSPs that will most feel the blow. As a result,
a likely unintended consequence of article 17 DSM is
that it indirectly provides the big tech companies a
competitive advantage over smaller CSSPs, who may
end up being pushed out of, or prevented from en-
tering, the market due to their inability to meet arti-
cle 17 DSM´s requirements. This competitive advan-
tage for big tech companies is a negative side-effect
that will hurt competition and may lead to a greater
market concentration in the EU amongst CSSPs. This
appears to be a very expensive price to pay in the at-
tempt to close the value gap.
Abstract: Article 17 of the Directive on Copy-
right in the Digital Single Market (DSM), with its goal
to close the so-called “value-gap”, contains several
strong incentives to use and further develop filter-
ing technologies. It also introduces a direct liability
regime, which puts content-service sharing providers
(CSSPs) at risk if they do not successfully implement
upload-filters as it is only in exceptional situations
that CSSPs will not be required to use these filters.
Thus, article 17 DSM leads to a situation where nearly
any company offering content-sharing services will
be required to implement filtering tools in order to
avoid the DSM’s direct liability regime. Having ac-
cess to a strong upload-filter is therefore essential
for CSSPs to be able to remain competitive in the new
DSM era. However, only big tech companies have the
financial power, technological knowledge and inter-
nal structure necessary to develop their own com-
petitive upload-filter, which thus gives them an ad-
vantage over small and mid-sized CSSPs, as they
most likely won’t have the means to develop their
own upload-filter. While these smaller CSSPs will
have the option to license the required filters from
third-party providers like Audible Magic, they may not
all be able to afford such provider’s services. In any
event, there is a risk that small and mid-sized CSSPs

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