A video streaming service called Vimeo is headquartered in New York and mostly serves business users.
The platform of the service, which has over a billion registered users, is made profitable through subscriptions, pay-per-view content, and adverts.
Vimeo is mostly utilised for lawful reasons. Its users occasionally upload stuff that violates copyright, though, and if these movies are not promptly taken down, it might have major consequences.
These "copyright infringing" uploads in Italy led to a legal dispute with the major local broadcaster Mediaset. This resulted in a victory for the rightsholder three years ago, and the court ordered Vimeo to pay €8.5 million in damages.
Due to its failure to take action against roughly 2,000 videos that were uploaded to the platform that violated copyrights, Vimeo was found to be at fault.
The American streaming service then filed an appeal petition, but last week a panel of judges upheld the original decision. This implies that the damages are also unaltered.
Vimeo cannot be viewed as a passive middleman, according to the Court. Because "the audiovisual contents are accurately catalogued, indexed, and linked with one other," the platform plays a "active role" that is "similar to a video on demand service" and adds value for users.
The Court asserts that Vimeo cannot merely conceal itself behind safe harbour protections by citing legal precedent from the EU Court of Justice. The decision is in line with one made by the Italian Supreme Court, which found that Yahoo can be considered a "active host" under specific circumstances.
As a result of the decision, Vimeo will need to be more watchful for possibly illegal content. The Court has already emphasised that upload filters and other techniques for fingerprinting may be useful in averting such issues.
The decision is welcomed by Enzo Mazza, CEO of the Italian Federation of the Music Industry, as it clarifies the active function of video-sharing websites.
"Although there is no requirement to monitor or pre-screen user content, those that 'actively host' are required to either remove such content or restrict access if they become aware of the illegal content of transmissions," explains Mazza.
In a related action against Vimeo, the Italian recording industry is also taking part and is hoping for a similar outcome.
"Vimeo has failed to uphold its responsibility as an online platform for content sharing by failing to take enough action to stop the distribution of illegal music on its platform. Significant amounts of illegal music are being repeatedly uploaded to its service, according to Mazza.
Overall, the Court of Appeal decision will improve copyright holders' standing. It builds on past victories, such as a recent ruling against Cloudflare, which was instructed to block pirate websites through its 1.1.1.1 DNS resolver.