Page 161 - A Study on the Role of UGC Platforms in Copyright Law：An Intermediary-oriented Approach

A Study on the Role of UGC Platforms in Copyright Law: Chapter 5 Formulating a Non-commercial UGC Creation Levy Scheme
An Intermediary-oriented Approach

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mainly used to facilitate the leviable use. The UGC platform is a major category of leviable
service. Other possible candidates include Internet access providers, WiFi communication
equipment, software for creating UGC, computer hardware, smartphones and other UGC
related devices and services.
A device or service that belongs to a leviable category but has not substantially benefitted
from UGC creation could apply for an exemption. Otherwise the administrative costs
incurred would outweigh the levies collected. For example, social media platforms such as
Twitter, Facebook and WeChat could be exempted from paying levies because a great many
UGCs on social media platforms are user-authored content that do not involve the use of pre-
existing copyrighted works. Jyh-An Lee observed that many video sharing platforms and
music sharing platforms in China have incorporated both PGCs and UGCs, namely, both
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works generated by professional producers and amateur creators. Copyright royalty judges
or similar authorities could set some tests to decide if the value of a service or device has
been substantially enhanced by facilitating UGC creation, and if the service or device should
be subject to the proposed levy schemes.
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As the proposed levy schemes would not conflict with copyright owners’ normal
exploitation of copyrighted works and would not unreasonably prejudice copyright owners’
legislative interests, the proposed levy schemes would apply to every copyright owner
with no opt-out option, just like the existing legislative exemptions such as fair use and fair
dealing. A significant source for UGC creation has been professional copyrighted works,
such as movies made by Universal or Disney, or sound recordings made by Warner or Sony.
These professional copyright conglomerates might be unwilling to join the levy schemes
because they might consider the reputation of copyright guardians and the chilling effects
on potential users to be more important than the revenue to be gained from one or several
specific works. Their desire to protect the integrity of their works and to better exploit the
derivative markets could further encourage them to opt out from the levy scheme. If these
copyright owners were allowed to opted out for one work, they would be unlikely to subject
other competitive works to the levy scheme. This means that the source works would not be
in a competitive market.
If the copyright owner were allowed to opt out, the levy scheme would make little
sense and we would return to the current, pre-levy status quo. Providing an opt-out option
for copyright owners would not benefit them much, because users could still use or even
access the opted out works by circumventing technological controls. Allowing copyright
owners to opt out would incur even more costs. Users need to find ways for circumvention
while copyright owners need to keep learning the latest technology for anti-circumvention.

208 ‘Copydan’ (C-463/12, 5/3/15) paras 25-26.
209 Jyh-An Lee, ‘Tripartite Perspective on the Copyright-Sharing Economy in China’ (2019) 35 Computer Law & Security
Review 1, 13, 16.
210 Netanel (n 73) 46.

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