The Effects of Online Copyright Enforcement upon the Freedom to Conduct a Business in the EU: A Closer Look at Article 17 of the CDSM Directive from a Fundamental Commercial Rights Perspective

By introducing a new copyright liability regime for online content-sharing service providers ('OCSSPs'), Article 17 of the Digital Single Market Directive (“the CDSM Directive”) substantially transformed online copyright enforcement in the EU. Although this new liability regime is challenged by many over the limitations that it may pose on the rights of internet users, the restraints that Article 17 of the CDSM Directive may bring on the commercial fundamental rights of OCSSPs remain neglected by the CJEU and scholars. The freedom to conduct a business is widely regarded as a quasi-subjective fundamental right that ensures that individuals and enterprises can freely conduct economic activity, become parties to contracts, and compete in the internal market. Upon categorizing the provision of online content-sharing services as an act of communication to the public, Article 17 (1) of the CDSM Directive obliges OCSSPs to enter into license agreements with the rightsholders of the contents shared by internet users. In addition, Article 17 (4) of the CDSM Directive requires OCSSPs to carry out highly costly automated preventive monitoring of all the contents that users wish to upload in order to ex-ante detect and remove the copyright-infringing subject matter from their services as a liability exemption mechanism. According to the CJEU, the right for OCSSPs to be able to freely use their economic, technical, and financial resources is covered by the freedom to conduct a business. However, the obligations imposed by Article 17 of the CDSM Directive upon OCSSPS may undermine their freedom to conduct a business in the EU by intervening with their freedom of contract, freedom to compete, and freedom to engage in economic activity. Hence, this research aims at exploring to what extent the obligations imposed by Article 17 of the CDSM Directive are compatible with the freedom to conduct a business of OCSSPs in the EU.