The problem with “the pursuit of financial gain” in GS Media

Britt Dekker for Playboy

Last week's GS Media decision [here, here, here] has generated a lot of interest, and raised a number of issues.

The 1709 Blog is delighted to host a guest contribution by Kristof Neefs (Altius) on a specific point of the judgment, ie the profit-making nature of the communication at hand.

Here's what Kristof writes:

"In GS Media (C-160/15), the EU Court of Justice held that hyperlinking to content placed online elsewhere is a communication to the public of that content if the hyperlinker had (or should have had) knowledge that the content was posted online without the consent of the copyright holder (§49).  

In my opinion – and I believe this is uncontroversial – Directive 2001/29 provides no verbatim basis for this subjective criterion. It is therefore up for debate whether it was within the Court’s discretion to introduce this subjective criterion in the EU copyright acquis. In the United States, the late Justice Scalia would probably have said no. A legalist tradition opposes judicial law-making. In contrast, judge Posner argues for pragmatism in How Judges Think (2008). This leaves more room for a law-making court. In any case, the judgment is out and it is what it is.

According to the judgment, the Court had freedom of expression and information in mind with its ruling (§31). By requiring knowledge of the illegal nature of the content referred to, internet users linking to it in good faith are meant to be protected. To balance things out, however, the Court also held in §51 that knowledge that the content the link refers to is illegal must be presumed iuris tantum (i.e. until rebutted) if the posting of hyperlinks “is carried out for profit”:

“Furthermore, when the posting of hyperlinks is carried out for profit, it can be expected that the person who posted such a link carries out the necessary checks to ensure that the work concerned is not illegally published on the website to which those hyperlinks lead, so that it must be presumed that that posting has occurred with the full knowledge of the protected nature of that work and the possible lack of consent to publication on the internet by the copyright holder. In such circumstances, and in so far as that rebuttable presumption is not rebutted, the act of posting a hyperlink to a work which was illegally placed on the internet constitutes a ‘communication to the public’ within the meaning of Article 3(1) of Directive 2001/29.”

This presumption provides copyright holders with the benefit of doubt when the hyperlink is posted for financial gain. In those cases, it will be up to the hyperlinker to provide evidence that he or she did not know (or should have known) that the content was initially posted online without the consent of the copyright holder.  

The Court has, however, not elaborated on the criterion of profit and financial gain. In particular, it does not seem to consider online advertising. A great deal of blogs and websites feature per-click or per-impression advertisements to ‘monetize’ content on their blog or website. Monetize is a big word here, because in reality the income generated by these ads is just enough to cover the costs of running the blog. Do such advertisements then automatically imply that any hyperlink on the website is posted for financial gain?

I predict that this is an argument that may be run by some copyright holders, because it relieves them of the burden of proof. Some EU courts may accept this argument, especially if those copyright holders are clever in the selection of cases they will initially pursue. I also predict that the blogger who uses web advertising to finance the costs to keep a blog online (and even those that make a small profit out of it) may not have the means to escalate his or her case to the Court of Justice to obtain clarity over the criterion of “financial gain” in GS Media. That is, unless a web advertisement service operator with deep pockets would decide to lend a helping hand.

In GS Media, the Court has provided us with the means to create flowcharts or tables to determine whether a hyperlink is a copyright infringement. However, it seems that the Court has provided an answer that raises a new question: what is the meaning of the “pursuit of financial gain” in the internet context? Perhaps the phrase “commercial activity with a view to economic advantage and not as a private matter” from the Court’s judgment in Arsenal / Reed (C-206/01, §40), a trade mark case, could be helpful. Another, somewhat more vague means of interpretation could be the Recital 14 in the preamble to the Enforcement Directive 2004/48, defining acts carried out on a commercial scale as those “carried out for direct or indirect economic or commercial advantage; this would normally exclude acts carried out by end consumers acting in good faith.”

If the “pursuit of financial gain” is interpreted more broadly to cover all websites that somehow benefit financially from online advertising, I believe the Court may have missed the mark in its attempt to balance freedom of expression and the interests of copyright holders."