The question of imposing legal liability on intermediaries for third party content is one that does not produce a uniform answer. Jurisdictions across the world have different criteria to gauge the degree or type of liability that the intermediary should be subjected to.[i] The focus of this article shall revolve around the status of intermediary liability in the European Union and how there is a need for the EU to incorporate a harmonized regime for intermediary liability by implementing the safe harbour provisions provided under the Electronic Commerce Directive across the Europe Union.
The emergence of e-commerce and digitalization has resulted in the Internet becoming both a market place for sale and exchange of ideas as well as a threat to intellectual property rights of individuals, copyright in particular.[ii] Keeping the above development in mind, the lawmakers at the European Union enacted the Electronic Commerce directive 2000/31/EC on 8th June 2000.
Electronic Commerce Directive (EC)
The EC Directive aims to create Information Society Services (ISS) and ensure certainty amongst national laws by providing clarity on certain legal concepts and aiding in the smooth functioning of the internal market of the European Union.[iii]
Under the EC Directive, service providers that are platforms for either transmitting information on behalf of the recipient of its service or providing access to a communications network cannot be held liable when they have not initiated the transmission, selected the receiver of the transmission or, selected or modified the information in the transmission. However, for a service provider to claim this exemption, the storage of information must not be longer than a reasonable time that is necessary for such transmission.[iv]
Service providers that cache any information for mere facilitation of access to such information to users shall not be liable regarding that information, however, certain conditions need to be satisfied.[v]
Further, service providers hosting information at the recipient’s request shall be exempt from liability with respect to that information if they do not have any ‘actual knowledge’ of any illegal activity and in case they have such knowledge, then on gaining such knowledge, they act in an expeditious manner for removing or disabling access to such information.[vi]
There is no definition of ‘actual knowledge’ provided in the Directive, however, the Electronic Commerce (EC Directive) Regulations 2002 (SI 2002/2013) provide guidance to list out certain criteria that a court may take into account in order to determine whether or not a service provider has ‘actual knowledge.’[vii]
Since its inception in the year 2000, the EC Directive has witnessed legal contradictions from new legislations imposing further obligations on intermediaries in fields such as privacy, communication, Intellectual Property Rights and child pornography. The legal uncertainty encompassing Internet liability has further provided scope for controversial court decisions.[viii] The EU chose to tag online intermediaries as neutral party exempt from liability, but national court decisions of member states have deviated from the finding.
Court Of Justice For The European Union (CJEU) Jurisprudence
As the internet is continuously developing and evolving, previously unsettled questions arise; therefore, it would not be possible to give a critical overview of the ongoing legal status of the liability of internet intermediaries without exploring the CJEU jurisprudence. The problem is further exacerbated, as the CJEU has to balance the conflicting interests of various stakeholders of the likes of free speech advocates, copyright holders and online service platforms.
The CJEU has stated that an abstinence of interference in terms of creation, alteration or filtering of content must be exhibited by the intermediary to avail exemption of liability under Articles 12 to 14 of the ECD. The CJEU has emphasized through the reading of Recital 42 of the EC Directive that the role of the intermediary must be strictly confined to a technical, automatic and passive nature.[ix]
To this extent, the CJEU in the case of L’Oreal v. eBay[x] acknowledged the active and passive intermediary differentiation. It held that if the platform is engaged in activities that entail assistance in terms of optimizing the reach of the content to other users of the platform and exercising an editorial role over the content etc., then it should be regarded as an active intermediary. Further, it held a passive intermediary to be a platform that would not be liable if its mode of operation is such that it does not play an active role that provides it with knowledge or control of the data stored. Lastly, it stated that the intermediary could not be exempted from liability if it is aware of facts or circumstances based on which an unlawful behavior could be identified.[xi]
But, the same court in 2017 held that “the making available and management of an online sharing platform must be considered to be an act of communication for the purpose of the Article 3(1) of Directive 2001/29,” thus holding intermediary liable for such management and leading to creation an anomaly from the general understanding of when an intermediary is to be held liable.[xii]
These contradictory opinions of the CJEU make the stand of EU on intermediary liability even more blur.
No General Obligation To Monitor
The EC Directive under Article 15 states that Member States “shall not impose a general obligation on providers to monitor information which they transmit or store.” However, the Directive’s Recital 47 imposes monitoring obligations on intermediaries in specific cases. Further, Article 15 prohibits States from imposing a general obligation on intermediaries to actively seek information or circumstances suggesting illegal activity. The CJEU in Scarlet v. SABAM was faced with the request of imposing a requirement on platforms to block content that is alleged to have been infringing copyright. The court while rejecting the said appeal stated that such a mechanism is contrary to Article 15 of the EC Directive as it would amount to filtering and monitoring of information flowing through its service.[xiii] Correspondingly, in SABAM v. Netlog the CJEU held that the execution of a filtering system by an online intermediary for all its users, as a preventive measure, at its own expense and for an inestimable period is not required.[xiv]
The exemption is granted only to the intermediaries covered under Articles 12 to 14 that perform the functions of a mere conduit, caching and hosting platform.
Article 15 lays down the prerequisites that the intermediary must oblige for the applicability of the liability exemption provided in Article 14. Prerequisites such as promptly informing the competent public authorities of alleged illegal activities or providing the authorities the information, at their request to identify the alleged person involved are present.[xv] This provision fulfills the dual needs of providing ample space for the intermediary to function in the realm of free speech while simultaneously ensuring certain checks and balances exist.
Compatibility With The Charter Of Fundamental Rights Of The European Union (EU Charter)
The EU Charter[xvi] is pertinent in the analysis of intermediary liability vis-à-vis free speech and copyright claims. Recital 45 of the EC Directive states, “The Directive respects the rights guaranteed by the Charter and shall impose liability on intermediaries only to extent of it being compatible with the right to freedom of speech and expression.”
Despite these safeguards, active intermediaries, in an effort to avoid liability, shall resort to the usage of technical measures such as ad-filters, or automatic blocking of certain tagged words etc.[xvii] Further, the requirement of taking down content after gaining knowledge of the same in a timely manner results in the legality of the post being determined by the online intermediary, commonly known as private censorship.[xviii] Further, the immense amount of data being shared every day also impedes the intermediary from being able to adhere to due process while screening and removing content through technical and automatic means.
The lack of a homogenous interpretation of the directive in a manner that shall balance the rights of free speech advocates, the intermediary and the group opposing the content published, are the root cause of the problem, as it exists currently. The blame is equally vested both in the contradicting national legislations enacted by state parties and the subsequent interpretation of the same by the judicial system of Europe. This contradiction exists even at the supra national courts such as the European Court of Human Rights as was witnessed by the court’s verdict in Delfi v Estonia. The court opened the door for contradictory legal regime on intermediary liability when it delivered the dissenting judgment, which recognized both the damage a liability regime would have on free speech as well as the need to hold intermediaries responsible.
The European Court of Human Rights in the case of Delfi v. Estonia[xix] (dissenting judgment by Judge Sajo) pointed to the potential consequences of introducing a norm of liability for user-generated content without actual knowledge of what it consists. Some intermediaries may find that the most feasible method to avoid liability, when directed to execute preventive measures, is to limit or remove the ability of users to share content. The dissent categorically stated, “Freedom of expression cannot be a matter of a hobby,” a view that legal scholars have concurred with.[xx] The European Commission admits that there is an impact on the freedom of expression owing to the obligation, found in Article 13, for expeditious removal of content.[xxi] The ECtHR acknowledged the repercussions the verdict of Delfi would have on the right to free speech online, it therefore reversed its stand of holding intermediaries liable, when a similar case presented itself before the court in the form of Magyar Tartalomszolgáltatók Egyesülete v. Hungary.[xxii]
The contradictory legal status on intermediary liability developed within the EU by member states is ill suited to the objective of the Union in harmonizing the law on intermediary liability. The fault lies in the failure to incorporate a legal framework capable of ensuring that the national legislations are in synchronization with the EC Directive. The problem is amplified by the absence of well-established and systematic national theories on the issue of online liability. Further, third party liability remains an under-analyzed field of law with lack of workable solutions for intermediary copyright infringement. Consequently, judges are left to rely on their own understanding of justice in the adjudication of online copyright infringement claims. This results in doctrinal tension, legal and jurisprudential uncertainty and contradictory domestic judicial interpretations.
The silver lining presented in the situation is the opportunity for the Commission to step in with a cross-border, unifying copyright protection and intermediary liability regime. The commission in its 2015 Communication on e-commerce and other online services held that a revision of the Directive would not be necessary at the current stage.[xxiii] However, it is suggested that a more drastic action is needed Instead of deferring from further action, the EU should tackle the pending business it initiated, to pave way for a harmonized regime on intermediary liability.
[i]KarinePerset, “The Economic and Social Role of Internet Intermediaries” (2010) <http://www.oecd.org/internet/ieconomy/44949023.pdf> accessed 17 May 2018.
[ii] Lemley MA, “Rationalising Internet Safe Harbours”, Journal on Telecommunication and High Technology Law (2007).
[iii] Pablo Baistrocchi, “Liability of Intermediary Service Providers in the EU Directive on Electronic Commerce”, 19 Santa Clara High Tech. L.J. 111 (2002).
[iv] Article 12 of Directive 2000/31/EC of The European Parliament and of the Council.
[v] Article 13 of Directive 2000/31/EC of The European Parliament and of the Council.
[vi] Article 14 of Directive 2000/31/EC of The European Parliament and of the Council.
[vii] Article 14 of Directive 2000/31/EC of The European Parliament and of the Council.
[viii] Jef Ausloos and Aleksandra Kuczerawy, “From Notice-and-Takedown to Notice-and-De-list: Implementing the Google Spain Ruling”, 14 COLO. TECH. L.J (2016).
[ix] Case C-484/14, Tobias Mc Fadden v Sony Music Entertainment Germany GmbH (CJEU 15 September 2016).
[x] Case C-324/09, L’Oréal SA and others v eBay International AG and others (CJEU 12 July 2011).
[xi] PA Craddock, “Legal Implication of Internet Filtering”, (LLM Dissertation, King’s College London 2010).
[xii] Case C-610/15, Stiching Brein v Ziggo BV, XS4ALL Interner BV (CJEU 14 June 2017).
[xiii] Case C-70/10, Scarlet v SABAM (CJEU 24 November 2011).
[xiv] Case C-360/10, SABAM v Netlog (CJEU 16 February 2012).
[xv] Pablo Baistrocchi, Liability of intermediary service providers in the EU directive on Electronic Commerce, Santa Clara High Technology Law Journal Vol 19 (2002).
[xvi] Charter of Fundamental Rights of the European Union, (2012/C 326/02).
[xvii] Governance of Online Intermediaries: Observations From a Series of National Case Studies, Berkman Center for Internet & Society, Research Publication N. 2015-5 (2015).
[xviii] Jonathan Peters and Brett Johnson, “Conceptualizing Private Governance in a Networked Society” 18 NC JL & Tech 15, 68 (2016).
[xix] Delfi AS v Estonia App no 40287/98 (ECtHR, 16 June 2015).
[xx] Ronald Mann and Seth Belzley, “The Promise of Internet Liability” 47 William & Mary Law Review 239, 265 (2005).
[xxi] Directive 2004/48/EC of the European Parliament and of the Council on the enforcement of Intellectual Property Rights (2004).
[xxii] MAGYAR TARTALOMSZOLGÁLTATÓK EGYESÜLETE AND INDEX.HU ZRT V HUNGARY App no 22947/13 (ECtHR, 2 February 2016).
[xxiii] Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, A digital single market strategy for Europe, COM (2015) 192 final.