Payment Services Provider: Consequences of the Copyright Act Reform

Written on 5 May 2015

Payment providers have been given a new responsability by the reform of the Spanish Copyright Act along with those that were already obliged to cooperate with the safeguard of copyrights. With the reform passed in 2014, payment services providers are now obliged to cooperate with the Second Section of the Copyright Commission when it deems it necessary in relation to the infringement of copyright rights. 

As a result of the entry into in force of the Law 21/2014, of 5 November, amending the Spanish Copyright Act (“SCA“) (Ley 21/2014, de 4 de noviembre, por la que se modifica el texto refundido de la Ley de Propiedad Intelectual, aprobado por Real Decreto Legislativo 1/1996, de 12 de abril, y la Ley 1/2000, de 7 de enero, de Enjuiciamiento Civil), the powers to the Second Section of the Copyright Commission have been increased as they refer to copyrights enforceability in the digital sector.

Specifically, with the introduction of the new Article 158 ter of the SCA, reinforced control mechanisms are implemented, which are expected to play an essential role in the evolution of copyrights safeguard in the Internet at the moment. These control mechanisms brought about the assumption of legal obligations by a number of providers other than the infringing provider.

Among those mechanisms, the new possibility for the Second Section to require the cooperation of intermediation services providers, as well as those that provide payment services and advertising, greatly stands out. The main purpose behind the legal obligation of these “side” providers to cooperate enshrined in the text of the reform is that these providers may “dry up” the provision of their services to the infringing provider. Thus the infringing provider’s ability to resume the provision of services is hindered thereby ensuring that no further violation takes place in relation to the copyrights protecting the works offered through the infringing information society service.

Therefore, the new provision in the SCA establishes that the Second Section shall initiate ex officio the so-called “safeguard procedure” and proceed to ask the infringer to suspend the provision of the service or to remove the illegal content after the copyright holder reports the infringement to the Second Section. When the infringing provider does not go on to remove the content voluntarily, the Second Section is now enabled to require the cooperation of payment services providers to discontinue the provision of its services to the infringing provider. Likewise, it must be noted that the amendments introduced by Law 21/2014 in relation to the copyrights safeguard procedures have affected and triggered amendments in the Spanish Civil Procedure Law, since the Second Section will be able to address information requests on the services provided by the infringing provider to those payment services providers which have rendered services to the latter within the last twelve months. Also, these information requests shall always be compliant with the provisions on electronic communications data retention.

Thus, it may be understood that the legislator considers that the provision of payment services is tantamount to the provision of intermediation and advertising services by understanding that forcing the suspension of the payment service can help get to interrupt the infringing service. For this reason, the legislator has decided to link the payment services providers’ obligation to cooperate to the duty of cooperation required to intermediation services providers that is set out in Article 11 of the Spanish Information Society Services and E-Commerce Law (“LSSI“).

The inclusion of the cooperation obligation of payment services providers under the regime of Article 11 of the LSSI means that those providers of payment services which refuse to cooperate will be held liable for a very serious infringement of the LSSI sanctioned with a penalty ranging from €150,000 to €600,000. In turn, the infringing provider shall be sanctioned in case of recidivism in failing to comply with the request to remove the content with the same penalty.

It should be noted that, in order to carry out the execution of the measure of cooperation from the Second Section, it is necessary to have previous judicial authorization. This judicial authorization shall be necessary insofar as the Copyright Commission may not authorize the interruption of the electronic communications of an information society services provider.

Summing up, there remains to be seen what the actual scope of the definition of payment services provider is, as well as the content of the requests addressed to them, in the light of the actual implementation of the reform by the Copyright Commission.