Olswang Media Newsletter: latest legal developments in Germany and Europe - April 2014 edition


This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

This is the second edition of our monthly Media Newsletter. Produced by our German office, it covers the latest legal and regulatory developments in the media sector across both Germany and Europe. This month, we look at:
  • European Court of Justice (ECJ) Decision on Blocking Obligations
    of Internet Service Providers (ISPs)
  • ECJ Decision on Unlawful Reproductions as "Private Copies"
  • Bitkom, GEMA Reach First Royalty Agreement for VoD Providers
  • State Media Authorities Accuse Comedians of Unlawful Product Placement on their
    YouTube Channels, Investigate Measures Against Company Selling Ad Space

European Court of Justice (ECJ) Decision on Blocking Obligations of Internet Service Providers (ISPs)

On March 27, the ECJ ruled in the  UPC Telekabel Wien Case that an ISP may be ordered to block its customers' access to a copyright-infringing website. At the request of German Constantin Film Verleih and Austrian Wega Filmproduktionsgesellschaft, the Austrian courts ordered Austrian ISP UPC Telekabel Wien to stop providing its customers with access to kino.to, a site which (illegally) offers films to view and download.

In a final instance hearing, the Oberster Gerichtshof (Supreme Court, Austria) asked the Court of Justice to interpret the EU Copyright Directive and the fundamental rights recognised by EU law. The Directive allows EU Member States to provide for the possibility for rightholders to apply for an injunction against intermediaries whose services are used by a third party to infringe their rights. The ECJ replied that an ISP such as UPC Telekabel, which allows its customers to access protected subject-matter illegally made available to the public on the internet by a third party, is an intermediary whose services are used to infringe copyright. Consequently, the ECJ ruled that any national legal rule providing for legal action against such intermediary is in compliance with the Directive.

The Court noted that the Directive does not require a specific relationship between the person infringing copyright and the intermediary against whom an injunction may be issued. The Court however stressed that the fundamental rights, specifically the ISP's freedom to conduct a business, require such an injunction to not unnecessarily deprive users of the possibility of lawfully accessing the information available, and to actually prevent unauthorised access to the protected subject-matter.

ECJ Decision on Unlawful Reproductions as "Private Copies"

On April 10, the ECJ held in  ACI Adam that EU Member States may not, under the Copyright Directive, permit reproductions for private use to be made from unlawful sources. The Court stated that national legislation which makes no distinction between private copies made from lawful sources and those made from counterfeited or pirated sources is not capable of ensuring a proper application of the private copying exception to the exclusive reproduction right of copyright holders. Such legislation could therefore not be tolerated, since it would be detrimental to the proper functioning of the internal market in that it would encourage the circulation of counterfeited or pirated works, which would inevitably reduce the volume of sales or of lawful transactions relating to the protected works. The case had been brought to the Court by the Supreme Court of the Netherlands.

Bitkom, GEMA Reach First Royalty Agreement for VoD Providers

German industry group Bitkom (for the information and communication technology industry) and royalty collecting society GEMA have for the first time reached an agreement for online video-on-demand (VoD) services. The agreement, reached on April 1, 2014, governs the royalties to be paid by online VoD services for music used in movies, series, TV shows, documentaries and other formats. The fees will be EUR 0.165 for film purchases (DTO) and EUR 0.055 for film rentals. For TV series, the fee will be EUR 0.049 per purchase or EUR 0.0235 per rental. The agreement was made effective retroactively from 1 January 2002. Royalty payments by SVoD providers are not governed by the agreement, but continue to be negotiated between Bitkom and GEMA.

State Media Authorities Accuse Comedians of Unlawful Product Placement on their YouTube Channels, Investigate Measures Against Company Selling Ad Space

The German State Media Authorities are accusing comedy group "Y-Titty" and YouTube star Nilam M. Farooq (known as Daaruum) of having advertised products of Samsung, McDonalds, Coca Cola, Schwarzkopf, and others in videos on their respective YouTube channels without properly labeling the advertising. Political news report "Report Mainz", of German public broadcaster ARD, claims to have seen documents of Munich ad company Mediakraft, pursuant to which Mediakraft sells product placement and branded entertainment for integration in Y-Titty's YouTube channel, and Mediakraft's management is encouraging YouTubers to claim financial remuneration from manufacturers of any products seen in their videos.

The authority responsible for supervision of Mediakraft has initiated proceedings to assess these claims. They have indicated that they are critical of the way the products are shown, and that unlawful product placement seems likely. The authority's assessment and its result will be interesting to many, as it is unclear to date to what extent German and EU regulations on advertising and product placement apply to online video platforms such as YouTube. 

This newsletter contains general legal information only and, although we endeavor to ensure that the content is accurate and up to date, users should seek appropriate legal advice before taking or refraining from taking any action. The contents of this newsletter should not be construed as legal advice and we disclaim any liability in relation to its use.