The Court of Justice of the European Union finds that ISPs cannot be forced to monitor their users in a decision of 24 November 2011.
The advent of peer-to-peer file sharing has led to tension between the content and technology industries. Content industries, negatively affected by copyright infringement, have, through legal actions, attempted to force intermediaries, such as ISPs and hosts, to take active steps to prevent such infringement. In Ireland, these attempts famously culminated in a series of cases between record labels and ISPs. This litigation left matters somewhat up-in-the-air: The Irish High Court in one such case accepted the voluntary adoption, by one of Ireland's leading ISPs, Eircom, of a policy of terminating the internet access of suspected file sharers, but also found, in a separate case, that another ISP, UPC, could not be forced to adopt such an approach. These cases precipitated a consultation by the Department of Jobs, Enterprise and Innovation on the subject.
The Court of Justice of the European Union has tackled this issue head on, ruling that an ISP cannot be obliged to operate a general monitoring and filtering system.
While this decision directly addressed the liability of ISPs, the Court's findings would also appear to apply to other online intermediaries, such as cloud storage providers or sites driven by user generated content.
This case began in Belgium, where, in 2004, a collective rights agency, SABAM, brought proceedings against Scarlet, an ISP. SABAM sought an order directing Scarlet to install and operate, at its own expense, a filtering technology which would effectively prohibit P2P file sharing by Scarlet's users. The Court of Justice of the EU which considered this issue had to decide whether such an order was compatible with EU law.
The approach the Court took to answering this question is quite interesting. It treated what many might regard as a commercial dispute as a matter of human rights law.
The Court reiterated that, under various EU directives, a rights holder can obtain an injunction against an intermediary if third parties are using that intermediary's services to infringe copyright. The Court stressed, however, that as a result of the E-Commerce Directive it is not possible to impose a general obligation on providers to monitor the information they transmit or to actively seek out facts or circumstances indicating unlawful activity.
Turning its attention to the proposed filtering system, the Court noted that copyright was, for the purposes of EU law, a human right. However, it stressed that this right needed to be balanced against other human rights, including the freedom of technology companies to conduct business, the privacy rights of internet users and the right of internet users to freely access information. It noted that the proposed filtering system would disproportionately impinge upon these rights and, as such, breach EU law.
In the short term, this judgment is significant as it makes clear that ISPs and other intermediaries cannot be forced to actively police their networks or services. It is, however, important not to overstate the Court's findings. It may still be possible to implement a three strikes type framework, in compliance with European law, if the monitoring is done by a third party (such as the rights holders themselves) and if a system can be designed to fully balance the different rights at play.
Over the long term, this judgment is noteworthy as it shows that the European Courts regard disputes between IP holders and technology firms as amounting to clashes of human rights, not simply disputes about the interpretation of statutory provisions. To date, internet cases in Europe, in contrast to the US, have tended to the unemotive, focusing on the technical letter of the law, rather than on sweeping principles of human rights. This may be about to change.
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