With a judgment dated April 27 and published on June 4, 2021, the German Federal Court (Bundesgerichtshof – the “Court”) declared unfair and therefore illegal and unenforceable a common way to make changes to terms and conditions (“T&Cs”) used vis-à-vis consumers in Germany.

For more information, read the full client alert.

Companies contracting with consumers have to take care to ensure their agreement terms are enforceable. In one of the first post-Brexit decisions on issues in an online consumer contract, a UK court recently showed that principles of fairness and transparency remain vital in the terms and conditions of consumer digital contracts.

In Europe, drafting digital

After the presentation of a general “European Approach to Artificial Intelligence” by the EU Commission in March 2021, a detailed draft regulation aimed at safeguarding fundamental EU rights and user safety was published today (“Draft Regulation”). The Draft Regulation’s main provisions are the following:

  • A binding regulation for AI Systems (defined below) that directly applies

SUMMARY
  • On June 7, 2019, the highly controversial EU Copyright Directive (“Directive”) came into force, requiring EU Member States to transpose its provisions into national law by June 7, 2021.
  • To recap, the most relevant provisions of the Directive require the implementation of the following rules into national law:
    • Online content-sharing service providers’ liability for copyright-infringing content, Article 17
      Online content-sharing services are subject to direct liability for copyright-infringing content uploaded by their users if they fail to prove that they made “best efforts” to obtain the rights-holder’s authorization or fail to evidence that they made “best efforts” to ensure the unavailability of such content. They are also liable if they fail to act expeditiously to take down uploads of work for which they have received a takedown notice.
    • Exceptions and limitations to copyright protection
      The Directive introduces exceptions and limitations (e.g., for text and data mining (incl. in favor of commercial enterprises)); provisions regarding collective licensing; and recalltransparency, and fair remuneration rights for authors.
    • Ancillary copyright for press publishers, Article 15
      Press publishers are granted an ancillary copyright for press publications, covering the reproduction and making available of such content by information society service providers (excluding only hyperlinks accompanied by “individual words or very short extracts”).
  • The German Federal Ministry of Justice and Consumer Protection’s latest draft act (Referentenentwurf) for the national implementation of the Directive was leaked in September 2020 (“German Draft Act”).  In summary, the current German Draft Act proposes to implement Article 17 as follows, deviating in part from the EU Copyright Directive:
    • De minimis use: In contrast to the EU Copyright Directive as well in contract to the German Copyright Act, the German Draft Act additionally provides for a de minimis copyright exemption for non-commercial minor uses such as 20 seconds (against a statutory license fee to be paid to collecting societies). This is the most criticized provision of the German Draft Act and makes it very likely that this draft will be revised again by the German legislature shortly.
    • Flagging: Furthermore, without any legal basis in the Directive, as to avoid the risk of over-blocking, based on the German Draft Act, users shall be technically enabled to flag their content as (i) contractually authorized or as (ii) authorized based on copyright exemptions, if such content is identified to them as blocked content. If content is flagged, the provider is not obligated to block or remove content unless the flagging is obviously incorrect.
    • Online content-sharing service providers’ liability for copyright-infringing content: The German Draft Act follows the provisions of the Directive on the scope of liability for online content-sharing service providers.
    • Licensing: Going beyond the Directive, the Draft Act imposes a unilateral obligation on online service providers to contract with representative rights-holders. Effectively, online service providers will have to accept licenses available through a collecting society or a major rights-holder under certain conditions such as the appropriateness of the requested remuneration.
    • Blocking and Removing: If a rights-holder has provided corresponding information to an online service provider, online service providers are obligated to block non-authorized uses of rights-holder’s work (“stay down”). Similarly, following a rights-holder’s request after a work has already been uploaded without authorization, online service providers are obligated to remove such work (“take down”) and to block the work in the future (“stay down”). Factually, the German Draft Act thereby embraces the use of upload filters.
    • Copyright Exemptions: The Draft Act expressly determines copyright exemptions under the German Copyright Act (e.g., caricature, parody, pastiche) as being applicable.


Continue Reading EU Copyright Directive – Quo Vadis: First Steps Towards its German Implementation

Despite the coronavirus pandemic, the process of implementing Brexit continues. One of the key Brexit issues for the tech sector is the extent to which the UK will either align or diverge its digital regulations with the EU.

Both the UK and EU have set out their intentions for their post-Brexit relationship in matters relating to technology, digital, and telecoms issues. There are signs that both the UK and EU will seek early alignment in key tech/digital compliance areas: is this a sign of things to come?

The UK government recently published its draft working text for a comprehensive free trade agreement between the UK and the EU (the “draft text”). As we explain below, the draft text covers (1) digital trade, recognising the importance of adopting frameworks that promote consumer confidence in digital services, (2) telecoms, and (3) audiovisual services. Intriguingly, the draft text aims to maintain regulatory alignment between the UK and the EU, insofar as possible, which could be a sign of the extent to which the UK plans to align with the EU (rather than forge its own path), both in these three areas and elsewhere, once the Brexit transition period is over.
Continue Reading Digital Compliance in Europe: Regulatory Alignment Post-Brexit

A new report from the U.S. Copyright Office suggests that Congress should fine-tune the Digital Millennium Copyright Act (DMCA) to, among other things, alter the takedown system that platforms must adhere to in order to be eligible for the safe harbor the DMCA affords to online platforms when third parties post infringing content. Read about

China’s “internet police,” who coordinate online censorship, have become especially busy since the coronavirus outbreak.

Inspired by homicides that were precipitated by social media posts created by one group of teenagers to incite another, a Florida bill would allow law enforcement to charge juveniles with a misdemeanor for posting photos of themselves with firearms online.

In March, Socially Aware reported on a lawsuit involving several prominent news outlets’ publication of a photo of NFL quarterback Tom Brady on Twitter. The case had the potential to upend a copyright and Internet-law rule that, in the words of a Forbes columnist, “media companies had viewed as settled law for over a

Last week, German regulators decided to no longer accept the widely used “JusProg” software as a sufficient means for online service providers to comply with statutory youth protection requirements. The decision is effective immediately, although it will most likely be challenged in court. If it prevails, it puts video-sharing platforms, distributors of gaming content, and online media services at risk of being held accountable for not properly protecting minors from potentially harmful content. For the affected providers, this is particularly challenging because it will be hard, if not impossible, to implement alternative youth protection tools that will meet the redefined regulatory standards.

This alert provides the legal background for the decision and discusses its implications in more detail. It is relevant to all online service providers that target German users.
Continue Reading Youth Protection in Germany: Are Online Age Checks & Daytime Blackouts Ahead?