However, there are a number of important points to consider in the European Court's ruling, which take the shine off what could otherwise be seen as a major victory for YouTube and other online platforms that rely on user uploads.
Firstly, the court makes it clear that services like YouTube are active platforms and are liable for breaches of copyright if they are aware protected content is available illegally and refrain from "expeditiously deleting it or blocking access to it."
Secondly, and of far greater importance for rights holders, the ruling only concerns platforms' liability at the time of the original Peterson and Elsevier court actions, and doesn't take into account the major reforms to copyright law introduced throughout Europe as part of the European Union's Copyright Directive, passed in 2019.
"The ruling matters, but the big picture matters more," says John Phelan, director general of global music publishing trade body ICMP. He says the "game-changer" copyright directive and its key component, Article 17, confirms the liability of user-upload platforms for hosting copyright infringing content and likens today's court ruling to "someone giving directions for a place you have already left."
European authors group GESAC, which represents the rights of more than 1 million musicians, creators and rights holders, called the court's verdict "rather unhelpful."
It said the ruling proves the "absolute necessity" of Article 17 in addressing the value gap that has historically let online platforms like YouTube avoid indirect liability for copyright infringement and, rights holders say, use those laws as leverage to license music on more favorable terms. Article 17, says GESAC, "has introduced the necessary fairness and balance."
The European Court of Justice says that its ruling in the Peterson and Elsevier joint cases do not concern, or alter the rules established by the Copyright Directive or Article 17. Neither does the court ruling ultimately decide the victor in either the Peterson or Elsevier case. That is for national courts to decide, using the European Court of Justice ruling as a framework.
For its part, YouTube says it has spent more than $100 million building its automated Content ID system to enable rights holders to better track and monetize their content and detect infringing user uploads.
"YouTube is a leader in copyright and supports rights holders being paid their fair share," says a spokesperson for the Google-owned company. It says it has paid out $4 billion to the music industry in the past 12 months alone, over 30% of which comes from monetized user generated content.
Nevertheless, radical changes in how YouTube is required to manage and govern that user generated content are already taking place in Europe.
EU countries had until June 7 to pass the copyright directive into national law, but only a handful of countries so far have done so. They include France, the Netherlands, Hungary and Denmark, who have all passed legislation in line with the directive, which requires platforms to obtain "fair remuneration" license deals with rights holders and make "best efforts" to remove unlicensed content and ensure it stays down.
Germany also passed its version of the law on May 28, but made several deviations from the EU text which drew fierce objections from labels, artists and publishers. They included a controversial law stating that short song clips of under 15 seconds uploaded onto user-generated platforms will be presumed "minor use" and thus effectively exempt from having to obtain permission or a license from the rights holder.
The long-delayed publication of new guidance from the European Commission earlier this month on how countries should transpose the directive into national law also provoked scorn from rights holders for "creating uncertainty and ambiguity" that could weaken creators' rights.
"It is clear that music creators, platforms and users need legal certainty," says Crispin Hunt, chair of U.K. artist group The Ivors Academy in response to Tuesday's ruling.
"Music creators and rights holders must be fairly paid for the distribution and monetization of their work," says Hunt, "and protected from industrialized corporate pillaging."
UPDATE 6/23: The headline of this article has been changed to more accurately reflect the court’s ruling.