Implementation of the DSM Directive is progressing in Finland — what changes will the directive bring to the Finnish copyright legislation?

The Directive on copyright and related rights in the Digital Single Market (DSM Directive, 2019/790/EU) was adopted in June 2019. Since the beginning, the controversial Directive was a subject of extensive lobbying by both rightsholders and various tech giants. The DSM Directive requires major changes in Finland and is implemented by amending the Copyright Act (404/1961).

The DSM Directive seeks to modernise the EU copyright framework to account for different situations in the digital environment. It also aims to ensure greater access to content in the EU, strengthen the role of rightsholders and promote the achievement of a functioning copyright market.

Initially, the deadline for the implementation of the DSM Directive was 7 June 2021. However, in Finland, as in most member states, the implementation work has been delayed. Various problems have arisen during the implementation process, and the proposed amendments have generated extensive discussion: the first draft of the government proposal, which was released last fall, was met with widespread criticism and garnered a total of 223 comments from different stakeholders. Based on the comments, considerable changes were made to the government proposal, and a new proposal was submitted to the Parliament this April.

But how does the amended Finnish Copyright Act look like right now? Below, we present some of the most important provisions of the DSM Directive and how they are proposed to be implemented in Finland.

Article 17: Liability of online content sharing platforms on copyright-infringing material

Article 17 of the DSM Directive has been a subject of extensive debate in all Member States. It introduces increased liability for online content sharing platforms on the material stored on their services. These platforms include various social media platforms which often commercially exploit content shared by consumers. Examples of such platforms include Facebook, YouTube and TikTok.

Article 17 imposes an obligation on platforms to obtain appropriate authorisation from authors to exploit copyright-protected material. The platforms must also prevent prior access to copyright-infringing material at the request of the author. The Directive aims to substantially improve the legal position of both authors and the content-sharing platforms.

Currently, Article 17 is proposed to be implemented in Finland by introducing a new Chapter 6a into the Copyright Act, which would contain provisions on the liability of online content sharing platforms. Under the new provisions, the platforms would be considered liable with respect to the works stored on their service and communicated to the public, unless they have obtained the authorisation from the author to use those works. Liability may be discharged if the platform demonstrates that it has used its best efforts to obtain the appropriate authorisation or to ensure that the author’s works, which the author has provided sufficient information of, are not made available. The platform could also be exempted from liability by using their best efforts to prevent access to the work or to remove it without delay. 

Some provisions of Article 17 have been particularly challenging to implement. These include Article 17(4) which stipulates that the measures taken to both identify and prevent access to works shall not result in the prevention of non-fringing material. In Finland, the objective of the Directive is currently pursued by establishing a right in the legislation for the lawful use of works, and by providing an obligation on the platform to adopt practices that enable the lawful use of works. In addition, the use of automatic blocking measures will only be allowed in specific cases.

Moreover, Article 17(8) has also proved to be difficult to implement. According to Article 17(8), the application of the Directive shall not lead to imposing a general monitoring obligation on online content sharing platforms. In Finland, the provision was originally proposed to be implemented by obliging platforms to provide only the means and other arrangements for authors to identify and prevent access to copyrighted works.

However, the direction has shifted since then: currently, the proposal is to implement the regulation in a way that is as close as possible to the ruling of the European Court of Justice in the Glawischnig Piesczek case (C-18/80) and to the guidance provided by the Commission. The intention is that the platform would be obliged to block access only to material which is manifestly offensive.

The first draft government proposal suggested establishing a new Copyright Litigation Board in Finland. The Copyright Litigation Board would be an independent alternative dispute resolution body which would have assessed disputes concerning allegedly infringing material. However, this suggestion was deleted from the new government proposal due to criticism from the Ministry of Finance and the Ministry of Justice. Instead, the amended Copyright Act would impose on platforms an obligation to implement a complaint and redress mechanism – a procedure which would resolve disputes between the platform and the user. 

Amendments to copyright limitations

The DSM Directive also introduces some amendments to copyright limitations. Article 4 of the Directive requires Member States to enact a limitation on copyright related to data mining. This new restriction aims at promoting innovation and improving the possibilities for analysing material by means of various information technology tools.

Article 4 is proposed to be implemented in Finland by enacting both a limitation on general data mining, and a limitation on data mining for scientific research. Under the proposed new provision, it would be lawful to use a work for the purposes of data mining, unless the author has explicitly reserved this right. Thus, the author would have the option to prohibit such use. However, this option would not apply to data mining for scientific research purposes by research organisations and cultural heritage institutions, which cannot be restricted.

In addition, Member States are required to provide for copyright limitations regarding the use of works for educational purposes, the availability of cultural heritage and the exercise of freedom of expression. The amended Copyright Act would therefore contain new copyright limitations regarding educational use, as well as a new provision that would allow the use of a work in another work, for example in a parody, caricature, or imitation.

The DSM Directive also promotes the use of out-of-commerce works in cultural heritage institutions by introducing a framework for contractual licensing. The amended Copyright Act would therefore also contain new provisions which stipulate that works that have already been withdrawn from commercial distribution could be made available to the public on the basis of a contractual licence. However, if the licence is not obtained, the works could still be used under certain conditions based on a limitation to copyright. 

What's next?

The path of the DSM Directive into the Finnish legislation has not been straightforward, and the new government proposal has not been spared from criticism either. Shortcomings in the implementation of the Directive have been identified, especially after the CJEU published its recent ruling in the case Poland v Commission and Council (C-401/19). In this ruling, the CJEU recalled that member states must ensure a balance of rights in line with the judgment. It has therefore been suggested that the government proposal should be supplemented regarding the remedies. However, it remains to be seen whether the Copyright Act will actually be changed as a result of the CJEU judgment or in the course of the parliamentary deliberations in general.