In an initial order, a court in Vienna, Austria, has ruled that YouTube can be held directly liable for users' copyright infringements. The video service is not seen as a neutral intermediary and should do more to prevent infringing uploads. The ruling, which is not yet legally binding, is a win for local television channel Puls 4 but YouTube indicates that, if it stands, the company will likely appeal.

YouTube is known to be a breeding ground for creators. At the same time, however, it’s also regularly used to share copyrighted material without permission.

While copyright holders can issue takedown notices to remove infringing content, a preliminary ruling by the Commercial Court in Vienna has decided this is not sufficient.

The ruling follows a complaint from local television channel Puls 4. After a thorough review of YouTube’s functionalities, the Court concluded that YouTube has an obligation to prevent third parties from uploading infringing content.

In its defense, YouTube argued that it’s a neutral hosting provider under the provisions of the E-Commerce Act. As such, it should be shielded from direct liability for the actions of users.

However, the Commercial Court disagreed, noting that YouTube takes several motivated actions to organize and optimize how videos are displayed. By doing so, it becomes more than a neutral hosting provider.

“Through the connections, sorting, filtering and linking, in particular by creating tables of contents according to predefined categories, determining the surfing behavior of users and creating a tailor-made surfing proposal, offering help etc, YouTube leaves on the role of a neutral intermediary and therefore cannot claim the host provider privilege,” the Court declared.

As a consequence, YouTube will have to take measures to ensure that no copyright-infringing videos are uploaded in the future. This sounds a lot like the upload filters which are part of the EU’s planned copyright reform.

According to Puls 4, the Court’s decision has “the potential to revolutionize the Internet.” While it is limited to copyright infringement and YouTube, the company notes that it could be expanded to other areas and services as well.

“The media, who call themselves social networks, will have to recognize that they must also take responsibility for the content through which they earn many millions. This is a real gamechanger,” says Markus Breitenecker, Managing Director of Puls 4.

YouTube responded by informing Austrian press that the judgment will be “examined in detail”.

“We are keeping all options open, including an appeal,” a spokesman said. “YouTube takes copyright protection very seriously and provides rights owners with tools and resources to protect and exploit their content.”

The current ruling is not yet legally binding, as it has yet to be confirmed, so this isn’t the last we’ll hear of the case.

TF reached out to Puls 4 to find out how YouTube’s Content ID system factors into the case, and whether that is sufficient or not in their view, but at the time of publication we had yet to receive a response.

Update: A Puls4 spokesperson confirmed that the Content-ID system was taken into account.

“Yes, the Content-ID System was taken into account. But the court ruled that this is not a sufficient measure to prevent copyright infringement.”