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Italian Court Rules on the Liability of Video Sharing Platforms for User Uploaded Content

The Court of First Instance in Rome (known as the “Tribunale di Roma”) (hereinafter the “Italian Court”) has ruled that the video sharing platform Dailymotion (hereinafter the “Platform”), is directly liable for content uploaded by its users, which content, amounting to nearly a thousand videos, violated Mediaset’s intellectual property rights over a period of years.

The ruling was given in the case Mediaset vs Dailymotion (RG 24711-2012, decision 14757/2019), the former an Italian Media giant and the latter largely owed by the French media giant, Vivendi. This ruling is noteworthy as it is one of the first European cases which found a hosting provider directly liable for the content uploaded to a platform by its users (except for piracy oriented websites such as Pirate Bay).

Other than finding the hosting provider directly liable for user content, this case also raised the issue of damages calculation, using “the price of consent” (“prezzo del consenso”) as the calculus for setting damages due, essentially, the price that a licensee would have been expected to pay to use the intellectual property rights at hand. Moreover, it imposed filtering and monitoring obligations on the Platform in order to prevent any future uploads of the content subject to the proceedings.

Liability

The Italian Court’s decision on whether the Platform was liable for its users’ actions, hinged on whether the Platform was deemed to be an active or a passive host, in view of the provisions of the Electronic Commerce Directive (as transposed in Italy’s domestic law), that is Directive 2000/31/EC on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (hereinafter the “E-Commerce Directive”).

Article 14 of the E-Commerce Directive provides hosting service providers with an exemption from liability for user uploaded content in certain passive instances, known as “safe-harbour”. It provides that an information society service (“ISS”) provider is exempt from liability for information stored at the request of a recipient of the service, on condition that:

  1. The provider does not have actual knowledge of the illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or
  2. The provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information.

The Recitals of the E-Commerce Directive further clarify that the exemptions from liability cover only cases where the ISS provider has no knowledge nor control over the information which is transmitted or stored.

In this case, for the Platform to benefit from such exemptions, it had to prove that it did not manage the content into special categories, nor that it generated advertising revenue therefrom or profiled the content via cookies: essentially that the Platform did not manipulate the content in any manner and was completely passive and unaware of its nature and existence.

Any attempt to manage the content would amount to the Platform playing an active role and in fact, the Italian Court interpreted the Platform’s actions as being active in their nature and consequently exclusion from liability could not be afforded under the E-Commerce Directive.

Damages

The quantification of damages was carried out by an exercise whereby the Court calculated how much it would have cost the Platform to acquire a fictitious licence to use the content. In so doing, the Italian Court also considered the duration of time throughout which the material remained visible, consequently fining the Platform over five million Euros in total.

In addition, the Italian Court, ordered the platform to pay the Plaintiff’s legal costs and imposed a penalty for each additional violation carried out by the Platform.

Way Forward and Possible Effects

The Court opined that the Platform must also implement preventive filtering mechanisms to ensure that the infringement does not re-occur.

Interestingly, the Italian Court did not order the plaintiff to provide the Platform with the URLs pertaining to the infringing content and indicated that for the Platform to remove such content, it could do so by simply searching through its Platform with the titles of the content in question.

Drawing out parallels with decisions to given on an EU level and on a national level in other EU countries, one can note for instance that in other Member States quantifying damages on the basis of hypothetical licences was deemed too theoretical to be accepted. 

On an EU level, it should be noted that a request for a preliminary reference was lodged against YouTube last October, with the main question put forward being:

Does the operator of an internet video platform on which videos containing content protected by copyright are made publicly accessible by users without the consent of the rightholders carry out an act of communication within the meaning of Article 3(1) of Directive 2001/29/EC 1?

Although a ruling in this case is being asked primarily in relation to the Copyright Directive, the request is also asking the EU Courts to determine whether YouTube’s actions fall within the cope of article 14 of the E-Commerce Directive and whether, consequently, YouTube should be deemed liable for the content uploaded by its users.

This article was written by Dr Terence Cassar and Dr Bernice Saliba.

For more information on Intellectual Property, Information Technology Law and related areas please contact Dr Ian Gauci on igauci@gtgadvocates.com, Dr Terence Cassar on tcassar@gtgadvocates.com, and Dr Bernice Saliba on bsaliba@gtgadvocates.com.

Disclaimer: This article is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them.