General Internet Filtering Not Allowable Under EU Law

by Ulrika Lomas, LawAndTax-News.com, Brussels

21 February 2012

The European Court of Justice (ECJ) has refused to approve the imposition of an injunction by a national court within the European Union (EU) which would have required an internet service provider (ISP) to install a general filtering system with a view to preventing the illegal downloading of musical and audio-visual files.

European Union (EU) law, the ECJ said, prohibits the imposition of a general monitoring obligation on an ISP, and requires a member state to strike a fair balance between, on the one hand, intellectual property rights (IPR), and, on the other, the freedom to conduct business, the right to protection of personal data and the freedom to receive or impart information.

The case before the ECJ arose from a dispute between Netlog NV, which runs an online social networking platform, and SABAM, a Belgian management company which is responsible for authorizing the use by third parties of the musical works of authors, composers and editors.

According to SABAM, Netlog’s social network also enables all users to make use, by means of their profile, of the musical and audio-visual works in SABAM’s repertoire, making those works available to the public in such a way that other users of that network can have access to them without SABAM’s consent and without Netlog paying it any fee.

In June 2009, SABAM had Netlog summoned before the Court of First Instance of Brussels, requesting that Netlog be ordered immediately to cease unlawfully making available musical or audio-visual works from SABAM’s repertoire and to pay a penalty of EUR1000 (USD1,315) for each day of delay in complying with that order.

In that regard, Netlog submitted that granting SABAM’s injunction would be tantamount to imposing on Netlog a general obligation to monitor, and the Court of First Instance asked for a preliminary ruling from the ECJ. It asks, in essence, whether EU law precludes a national court from issuing such an injunction against a hosting ISP, such as an owner of an online social network.

The ECJ pointed out that the implementation of the filtering system would require Netlog, as an ISP, to identify, within all of the files stored on its servers by all its service users, the files which are likely to contain works in respect of which IPR holders claim to hold rights. Next, the ISP would have to determine which of those files are being stored and made available to the public unlawfully, and, lastly, it would have to prevent files that it considers to be unlawful from being made available.

Accordingly, the filtering system would require Netlog to carry out general monitoring of the information stored on its servers, something which is prohibited by the E-Commerce Directive.

The ECJ also stressed that, in the context of measures adopted to protect copyright holders, national authorities and courts must strike a fair balance between the protection of copyright and the protection of the fundamental rights of individuals who are affected by such measures. However, not only would an injunction require the installation of a filtering system would involve monitoring all or most of the information stored by the ISP in the interests of the copyright holders, it would also have to have no limitation in time, be directed at all future infringements and be intended to protect not only existing works, but also works that have not yet been created at the time when the system is introduced.

Accordingly, it was felt that such an injunction would result in a serious infringement of Netlog’s freedom to conduct its business since it would require Netlog to install a complicated, costly, permanent computer system at its own expense, and may also infringe the fundamental rights of its service users - namely their right to protection of their personal data and their freedom to receive or impart information.

The ECJ has added previously that, while it is true that the protection of IPR is enshrined in the EU’s fundamental rights, there is nothing whatsoever to suggest that that right is inviolable and must, for that reason, be absolutely protected.

Consequently, the ECJ’s opinion was that, in adopting an injunction requiring the ISP to install such a filtering system, the national court would not be respecting the requirement that a fair balance be struck between IPR, on the one hand, and the freedom to conduct business, the right to protection of personal data and the freedom to receive or impart information, on the other.

It was pointed out that, while the ECJ does not decide such a dispute itself, it is for the national court to dispose of the case in accordance with the ECJ’s decision, which is similarly binding on other national courts before which a similar issue is raised.

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