German court tells YouTube to change wording on filtering notices

The District Court of Munich ruled on February 25 that YouTube cannot blame German royalty collecting society GEMA for content blocked on its platform. The Google subsidiary, according to the Chamber, has violated the German Act on unfair competition by posting the well-known notices “Unfortunately, this video is not available in Germany because it may contain music for which GEMA has not granted the respective music rights. We are sorry.” The judges also decided in favour of an obligation for YouTube to hand over a systematic list of site requests answered with the “sorry – it was GEMA” notices to allow for the potential calculation of damages. The judgement includes fines of up to 250,000 Euro per case or prison in case of omission.

Google's press team reacted with a one-line-comment, saying the company was currently “reviewing the wording of the notices” that were used “to better explain the background of the blocking for our users,” a spokesperson wrote answering questions by the Internet Policy Review. No answer was provided to the question whether the company was considering an appeal against the ruling. Google has four weeks to file an appeal with the Higher District Court, a Court spokesperson told us.

Rights owners might leave GEMA

Changing the notices looks like the easiest of tasks required by Google. The Court, in the ruling, went as far as making a proposal of its own: “this video is not available in Germany because of potential copyright claims or because GEMA and YouTube have not yet agreed on licensing questions.” The three judges held that such notices would be more objective and avoid what the judges said were incomplete and therefore misleading texts used so far. As such, they were degrading statements to the detriment of GEMA in the spirit of Article 4 paragraph 7 of the Act on unfair competition (UWG). Being misleading, as the Court judged, the statement is also not protected by the fundamental right on freedom of expression (Art. 5, German Constitution).

GEMA was depicted as unfriendly to internet users, the Court decision reads. While the judges did not completely follow the complainant's argument that both parties were direct competitors for acquisition and distribution of rights on music videos, they decided that “both parties have an economic interest to build up customer loyalty to generate revenues from either licensing or advertising.”

The degrading statements could result in rights owners leaving GEMA for fear that their videos might not be available on YouTube, which is an established platform. Interestingly, the Court also mentioned that internet users turned against GEMA might influence the ongoing fight of both parties over licences and, benefit Google's attempt for lower licensing fees. Only in one point did the German Court reject GEMA's arguments: YouTube can not be obliged to publish access statistics and what rights GEMA has for the list of blocked videos.

Fight over online content distribution systems

Both parties have been wrestling in and out of Court ever since a first interim agreement ran out in March 2009. Google, which had been paid a flat rate for two years, has rejected that it was in fact only providing a technical platform, but could not be held responsible for content uploaded by users themselves. GEMA on the other hand rejected another flat rate agreement and asked for a rate per stream, per usage licensing scheme. The court case is still under way after both parties appealed a decision by Hamburg's District Court. At the same time, the German Patent Office is inspecting the GEMA online license rates.

Both parties act inconsistently: GEMA, in its complaint before the Munich Court, fights for compensation for lost licensing fees from thousands of works it holds the rights to. At the same time, it has argued before the Patent Office that YouTube must stop access to a list of works. Google stands firm on the position that it is only a technical platform, not responsible for rights and rights management. Concurrently, the content ID system used for sharing ad revenue and blocking what is deemed a copyright violation looks more and more like a copyright enforcement machine. At the end of last year, the video gaming community cried out over a sudden redirection of ad revenues due to a new automation function in YouTube.

“And the winner is…” large rights owners?

While GEMA and Google might continue carrying their fight before the courts, the need for systematic answers to online copyright will not go away. The Collective Rights Management Directive of the EU, adopted February 4, is expected to bring some change. Certain rights owners might choose to not hand over exclusive rights to the collective rights organisations. Instead, they can now choose to handle online rights themselves and use other licenses schemes such as, for example, creative commons, while still being a member to a collective rights society.

Currently, as the Munich Court states, a German creator might be compelled to chose: either trust that GEMA will make agreement with YouTube some time down the road or, leave the system of collective rights management completely. But even as more choice for creators looks nice, recent content ID developments on YouTube seem to favour large rights owners.