Directive 2019/790/EU on copyright and related rights in the Digital Single Market (DSM), which came into force in 7 June 2021, introduced the much-debated article 17. The main controversy regarding article 17 was the practical obligation imposed on Online Content-Sharing Service Providers (OCSSPs) to deploy automated filtering technologies to block the unauthorized uploading of copyright-protected material. This practical obligation, which was recently confirmed by the European Court of Justice, raised a number of concerns, among others due to the financial impact which could have on OCSSPs, especially the small- and mid sized providers.
In the document 7986/19 of the Council of the European Union, the Federal Government of Germany engaged in this issue and suggested the encouraging of the development of Open-Source Software (OSS) as a possible solution. But what value can OSS and the open source logic and methodology in general provide in addressing these concerns?
The financial impact on OCSSPs
It is true that the concerns are well founded. The obligation to deploy an “Upload filter”, would normally leave the OCSSPs with two choices: Either to invest in the development of their own proprietary filtering technology or license one of the (few) reliable existing filters. However, both options come with significant financial burdens.
The experience so far has made clear that the development of filtering techniques cost a massive amount of resources that small- or mid-sized OCSSP cannot afford. For example, Youtube has already invested over 100 million USD in the development of its own “ContentID” filter while Soundcloud, an OCSSP not only smaller but also content-specific, still had to invest more than 5 million EUR to develop its own filter. On the other hand, licensing third-party filtering technologies doesn’t also come cheap. Surveys have shown that mid-sized OCSSPs need to spend an average of 30.000 to 60.000 USD per month on licensing a specific filtering technology. Moreover, there is a visible threat that the few companies which can provide reliable filtering systems obtain a severe advantage against their competitors, which would potentially lead to them obtain a dominant place in the market, the so-called “Lock-in effect”.
It also must be taken into account that the development or licensing costs are not the only ones to be borne when deploying an “Upload filter”. In addition, filtering systems must be integrated into the existing systems and interface of the platforms which requires a significant reengineering effort. Moreover, maintenance and operational work, such as documenting, and processing user requests raise the total cost even higher.
A possible solution?
The core characteristics of OSS could prove of valuable help to addressing the above-mentioned concerns. Firstly, OSS is provided free of charge to the licensee. However, this is not the only advantage that they provide. OSS methodology provides for a never-ending dynamic process of software development engaging a diverse community. That could lead to the further development of more advanced filtering technologies, suitable for a wide variety of OCSSPs.
Furthermore, OSS are in principle developed to be interoperable. In many cases that would address the issue of having to alter the interface and architecture of the platform to implement a filter. But, most importantly, a coordinated effort from OCSSPs to provide themselves and their peers with dependable, free of charge filtering software will prevent one player from obtaining a dominant place in the market, a harmful situation for the EU internal market. In addition, this process will boost communication and collaboration between the OCSSPS.
A paradigm for innovation
The proposition described above is just another example of how open-source logic can boost innovation, provide solutions to complex problems, and transform markets. Our law firm enjoys year of experience and advises on open source software, its legal use, and possible business models.