10.06.2021 | KPMG Law Insights

Copyright reform: upload filter and red button procedure – what’s new?

Copyright reform: upload filter and red button procedure – what’s new?

Media technologies are evolving rapidly. Copyright law finally had to adapt to this. The Act to Adapt Copyright Law to the Digital Requirements of the Single Market implements two European directives – the Directive on Copyright in the Digital Single Market (DSM Directive) and the Online SatCab Directive. It is the largest European copyright reform in the last 20 years. The innovations went into effect on June 7, 2021.


I. What will be newly regulated?

A core element of the reform is the direct liability of upload platforms such as YouTube, Facebook or TikTok for copyright infringements. It is regulated by the newly created Copyright Service Providers Act. The previous liability privilege for “host providers” no longer applies – upload platforms must license creative content in the future and are directly liable if users upload images, texts or videos without permission.

New are regulations on legal permissions to use text and data mining, a key technology for machine learning and artificial intelligence, for which there is no remuneration obligation. The initially temporary form of the Copyright Knowledge Society Act of 2017 is now permanent law. This ensures simplification of digital teaching and learning and creates legal certainty. Educational institutions may reproduce, distribute, and make publicly available works to a certain extent.

In addition, the ancillary copyright for press publishers will be introduced. The performance of press publishers in the production of press publications is to be protected and honored by this. Furthermore, the exploitation of journalistic content is to be prevented or at least curbed. A minimum share for journalists in the license revenues generated is envisaged. Authors are to be entitled to two-thirds of this revenue, and publishers to one-third. However, collecting societies may also determine other distribution keys.


II. What do platforms need to consider in the future?

The reorganization of the copyright responsibility of upload platforms entails new obligations. Service providers must delete unlicensed content and may no longer make it available. Large platforms will realistically only be able to do this by using the upload filters that were heavily disputed in advance. However, exceptions are provided for “presumptively permitted uses” when de minimis. Short excerpts of protected works can still be used, e.g. as caricatures or parodies. Minor use includes an audio or video snippet up to 15 seconds long, text up to 160 characters, and 125 kilobytes of a photo or graphic. Incidentally, these de minimis limits do not apply to live broadcasts of sporting events. To prevent overblocking, platforms must allow their users to self-tag their uploads as permitted uses, protecting them from immediate blocking or removal.


III. What else are users allowed to do?

Users may, of course, continue to post anything online that is permitted. This may be their own “content,” third-party works to which they have sufficient rights of use, or the use of third-party works covered by the “presumptively permitted uses.” In order to protect users’ freedom of expression, the use of upload filters initially presumes that certain content is legal. If the contribution is considered “presumably permitted content” it will be published. The rights holder is informed of this and can lodge a complaint, with immediate blocking possible in cases of abuse (“red button” procedure).


IV. Exemptions for startups in the founding phase

Exemption rules apply to startups. Companies that are less than three years old, have annual sales of less than ten million euros and fewer than five million users per month are partially exempt from the regulations. This is because the qualified blocking of unauthorized uses (“stay-down”) would regularly represent a disproportionately large effort for small platforms, which they cannot yet afford.


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