Tag Archives: directive

New Obligations for Companies Under the Proposed CS3D

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The proposed Corporate Sustainability Due Diligence Directive, so-called CS3D, may set new rules binding large EU or non-EU companies aimed at preventing adverse impacts on the environment and human rights resulting not only from their own operations, but also from those of their business partners.

CS3D has been criticized for its strong impact on the whole supply chain. While only large companies are in scope, vendors of such obligated entities will need to comply with such entities’ policies inspired by CS3D.

What Are the Proposed Obligations?

New due diligence requirements are supposed to be established by CS3D and may subsequently be implemented by each member state. According to the text under discussion, companies will have to identify, prevent, stop, mitigate and account for the adverse impacts on the environment and human rights caused by their activities. In addition, they will need to have a plan to ensure that their business strategy is compatible with limiting global warming to 1.5°C in line with the Paris Agreementand the climate neutrality goals set by Regulation (EU) 2021/1119.

Which Companies are In Scope of CS3D?

CS3D would apply to European companies that:

  • have, on average, more than 250 employees and a global net turnover of more than EUR 40 million in the last financial year for which the annual accounts were drawn up;
  • even if they do not meet the minimum thresholds, are the parent company of a group that had 500 employees and a global net turnover of more than EUR 150 million in the last financial year for which the annual accounts were drawn up.

It would also applty to third-country companies that:

  • generated a global net turnover of more than EUR 150 million, provided that at least EUR 40 million of that turnover was generated in the European Union in the financial year preceding the last financial year, including turnover generated by third-country companies with which the company and/or its subsidiaries have concluded a vertical agreement in the Union in exchange for licensing rights;
  • even if they do not meet the minimum thresholds mentioned in point (a), are the parent company of a group that had 500 employees and a global net turnover of more than EUR 150 million, of which at least EUR 40 million was generated in the European Union in the last financial year for which the annual accounts were drawn up, including turnover generated by third-country companies with which the company and/or its subsidiaries have concluded a vertical agreement in the Union in exchange for licensing rights.

When Will It Enter into Force?

CS3D is still under discussion. The proposal for the Directive was presented by the European Commission on February 23, 2022, and the Parliament adopted the amended text on December 14, 2023. The proposal must be formally approved by the Commission, the Parliament and the Council before it can officially enter into force.

Agreement Reached on the European Copyright Directive

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An agreement has been reached on the much discussed European Directive on copyright. http://europa.eu/rapid/press-release_IP-19-528_en.htm. In a race against time to close the dossier by the end of the legislature, in the late evening of February 13, the Parliament, the Commission and the Council of the European Union have finally found an agreement on the copyright directive, which this blog already illustrated https://lawhealthtech.com/2018/09/24/copyright-european-legislation-getting-ready-for-the-digital-era/ .

The vice president of the European Commission immediately tweeted «Europeans will finally have modern copyright rules fit for digital age!». Supporters insist that the new provision will guarantee rights for users, fair remuneration for creators and clarity of rules for platforms. On the other hand, the opposition, stronger than ever before, wants to prevent the imminent change of the internet as we know it.

The highest expectations, placed on the trilogue, concerned the much debated articles 11 and 13, and these have reported to be the outcomes:

  • With regard to the publishers rights, the new version of article 11 sets forth a general need to get a license for the online use of publishers’ press publications, with the only exception for the use of «individual words or very short extracts». According to the Commission, mere hyperlinks and snippets are, therefore, not included in the reform. However, how short should be a “very short extracts” is still to be understood.
  • With regard to the use of protected content by online content sharing services provider, online platforms should obtain a preemptively authorization from the right holders, concluding licensing agreements (where online platform is defined as «a provider of an information society service whose main or one of the main purposes is to store and give the public access to a large amount of works or other subject-matter uploaded by its users which it organizes and promotes for profit-making purposes»). Indeed, an exception has been created for small online platforms, which will not be subject to the abovementioned obligation if they: have been available to the public for less than three years; have an annual turnover below 10 million of euro; and have less than 5 million of visitors.

In the other cases, if no authorization is granted, sharing services providers shall be liable for unauthorized acts of communication unless they demonstrate not only to have made the best efforts to obtain the authorization, but also, in accordance with high industry standards of professional diligence, to have made the best efforts to ensure the unavailability of specific works, as well as to have acted expeditiously to remove the content, after receipt of a notice from the right holders.

We will see if the agreement will survive until the finishing line or if the vote of the European Parliament, scheduled for March-April, will block the text once again, as, unfortunately, already happened.