ACTA: Choking Digital Economy By Increasing Liability Ris...

The Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market ('Directive on electronic commerce') - Official Journal L 178 , 17/07/2000 P. 0001 - 0016 - says:

[...]

Whereas:

[...]

(42) The exemptions from liability established in this Directive cover only cases where the activity of the information society service provider is limited to the technical process of operating and giving access to a communication network over which information made available by third parties is transmitted or temporarily stored, for the sole purpose of making the transmission more efficient; this activity is of a mere technical, automatic and passive nature, which implies that the information society service provider has neither knowledge of nor control over the information which is transmitted or stored.

(43) A service provider can benefit from the exemptions for "mere conduit" and for "caching" when he is in no way involved with the information transmitted; this requires among other things that he does not modify the information that he transmits; this requirement does not cover manipulations of a technical nature which take place in the course of the transmission as they do not alter the integrity of the information contained in the transmission.

(44) A service provider who deliberately collaborates with one of the recipients of his service in order to undertake illegal acts goes beyond the activities of "mere conduit" or "caching" and as a result cannot benefit from the liability exemptions established for these activities.

(45) The limitations of the liability of intermediary service providers established in this Directive do not affect the possibility of injunctions of different kinds; such injunctions can in particular consist of orders by courts or administrative authorities requiring the termination or prevention of any infringement, including the removal of illegal information or the disabling of access to it.

(46) In order to benefit from a limitation of liability, the provider of an information society service, consisting of the storage of information, upon obtaining actual knowledge or awareness of illegal activities has to act expeditiously to remove or to disable access to the information concerned; the removal or disabling of access has to be undertaken in the observance of the principle of freedom of expression and of procedures established for this purpose at national level; this Directive does not affect Member States' possibility of establishing specific requirements which must be fulfilled expeditiously prior to the removal or disabling of information.

(47) Member States are prevented from imposing a monitoring obligation on service providers only with respect to obligations of a general nature; this does not concern monitoring obligations in a specific case and, in particular, does not affect orders by national authorities in accordance with national legislation.

(48) This Directive does not affect the possibility for Member States of requiring service providers, who host information provided by recipients of their service, to apply duties of care, which can reasonably be expected from them and which are specified by national law, in order to detect and prevent certain types of illegal activities.

(49) Member States and the Commission are to encourage the drawing-up of codes of conduct; this is not to impair the voluntary nature of such codes and the possibility for interested parties of deciding freely whether to adhere to such codes.

[...]

Section 4: Liability of intermediary service providers

Article 12
"Mere conduit"

1. Where an information society service is provided that consists of the transmission in a communication network of information provided by a recipient of the service, or the provision of access to a communication network, Member States shall ensure that the service provider is not liable for the information transmitted, on condition that the provider:
(a) does not initiate the transmission;
(b) does not select the receiver of the transmission; and
(c) does not select or modify the information contained in the transmission.

2. The acts of transmission and of provision of access referred to in paragraph 1 include the automatic, intermediate and transient storage of the information transmitted in so far as this takes place for the sole purpose of carrying out the transmission in the communication network, and provided that the information is not stored for any period longer than is reasonably necessary for the transmission.

3. This Article shall not affect the possibility for a court or administrative authority, in accordance with Member States' legal systems, of requiring the service provider to terminate or prevent an infringement.

Article 13
"Caching"

1. Where an information society service is provided that consists of the transmission in a communication network of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the automatic, intermediate and temporary storage of that information, performed for the sole purpose of making more efficient the information's onward transmission to other recipients of the service upon their request, on condition that:
(a) the provider does not modify the information;
(b) the provider complies with conditions on access to the information;
(c) the provider complies with rules regarding the updating of the information, specified in a manner widely recognised and used by industry;
(d) the provider does not interfere with the lawful use of technology, widely recognised and used by industry, to obtain data on the use of the information; and
(e) the provider acts expeditiously to remove or to disable access to the information it has stored upon obtaining actual knowledge of the fact that the information at the initial source of the transmission has been removed from the network, or access to it has been disabled, or that a court or an administrative authority has ordered such removal or disablement.

2. This Article shall not affect the possibility for a court or administrative authority, in accordance with Member States' legal systems, of requiring the service provider to terminate or prevent an infringement.

Article 14
Hosting

1. Where an information society service is provided that consists of the storage of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that:
(a) the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or
(b) the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information.

2. Paragraph 1 shall not apply when the recipient of the service is acting under the authority or the control of the provider.

3. This Article shall not affect the possibility for a court or administrative authority, in accordance with Member States' legal systems, of requiring the service provider to terminate or prevent an infringement, nor does it affect the possibility for Member States of establishing procedures governing the removal or disabling of access to information.

Article 15
No general obligation to monitor

1. Member States shall not impose a general obligation on providers, when providing the services covered by Articles 12, 13 and 14, to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity.

2. Member States may establish obligations for information society service providers promptly to inform the competent public authorities of alleged illegal activities undertaken or information provided by recipients of their service or obligations to communicate to the competent authorities, at their request, information enabling the identification of recipients of their service with whom they have storage agreements.

[...]

Although there are no details available as to the details of any envisaged ACTA text on third-party liability for copyright infringement, it seems to be quite clear that such kind of ACTA language would not work on the basis of the present Directive 2000/31/EC. The Directive gives a clear and closed catalogue of duties for a non-liable intermediary. Despite the fact that also the Directive states that Member States and the Commission are to encourage the drawing-up of codes of conduct, a limitation is imposed by requiring that this is not to impair the voluntary nature of such codes and the possibility for interested parties of deciding freely whether to adhere to such codes. ACTA might likely bring a wealth of mandatory codes to be observed by intermediaries in order to keep a 'safe harbour' status.

To a large extent, the future economic well-being of Europe lies in a flourishing digital economy beyond mere exploitation of Copyright. If a certain class of Copyright exploiters doesn't like the Internet because of the inherent difficulties in enforcing limits on content circulation, a political approach to save one's original business model might be to increase Internet-related liability risks as much as possible. Exactly this is about to happen in the Internet chapter of ACTA if Mr Geist's assumptions are correct.

Normally it is very hard to depart from the EU Acquis communautaire, e.g. proposing an amendment to the Directive, because of a broad majority or even unanimity amongst EU Member States is needed. Even the European Parliament would have to be involved, under the Lisbon Treaty with more weight. It might be seen as less likely that the bodies involved might be ready to adopt any amendment to this Directive for strengthening the power of copyright holders if such move would have to be discussed for itself.

The political trick might be to send the matter to a plurilateral conference preparing an entire package of measures, creating an immense pressure to accept the final result at home because of the most likely alternative otherwise might be to concede failure of the entire ACTA process.

This is most worrying because of its potential for proliferation. Take, for example, the HADOPI-like three-strikes provisions recently adopted in France. In Germany, it might well be too hot an iron for the new German centre-right government to openly support a similar three-strikes-law in Germany. However, the stakeholders interested in establishing such kind of a three-strikes-law are witty enough to know how to push such regulation through: The crucial point is to shift the debate to the bodies on EU level dealing with the current Telecoms package. If on EU level HADOPI-like provisions are mandated or facilitated, it surely will be much easier to get them also in Germany.

There appears to be some kind of forum shopping for vested interests, but this time not in view of electing a specific Court probably inclined to grant a certain motion but in view of electing a legislative entity probably inclined to accept certain specific proposals.

If ACTA really does away with broad intermediary privileges as currently enshrined in the EU Directive, this might well be a Chernobyl event for the destruction of acceptance of IP in broader circles of the general public throughout Europe. More than twenty years ago the publicity of the Chernobyl disaster gave the Greenery in many European countries a final kick in their fight against the exploitation of nuclear energy. A war against Internet intermediaries, in particular service providers, might do the same job for anti-IP circles in the Pirate Parties all over Europe.

The Internet chapter should be taken out of ACTA.

[UPDATE 2009-11-03] See also this report in PC World.