A free and open Internet in Europe? Case C-70/10 Scarlet Extended SA v SABM
Post by Prof. Lorna Woods
Photo: Xeni Jardin (xeni, CC via flickr)
Case C‑70/10 Scarlet Extended SA v. Société belge des auteurs, compositeurs et éditeurs SCRL (SABAM), judgment 24 November 2011 here.
In 2004, SABAM requested that Scarlet, a Belgian Internet service provider, filter the online activities of its users to avoid illegal downloads, affecting copyright holders, being carried out. Essentially the concern on the part of SABAM was to try to eradicate copyright infringement, specifically arising from file sharing and peer-to-peer networks, whilst Scarlet was concerned about data protection (and presumably the money it makes from its subscribers!). As well as the fact that IP addresses constitute personal data, Scarlet argued that the measures required by the court on SABAM’s application constituted a general obligation to monitor communications on its network, inasmuch as any system for blocking or filtering peer-to-peer traffic would necessarily require general surveillance of all the communications passing through its network. On appeal, the Belgian court referred a number of questions on the e-Commerce Directive (2000/31/EC), the e-Privacy Directive (2002/58/EC), the Information Society Directive (2001/29/EC), the Data Protection Directive (95/46/EC), as well as the Copyright Enforcement Directive (2004/48/EC).
The ECJ referred to its decision in Case C‑324/09 L’Oréal and Others to reaffirm that the effect of the Information Society Directive and the Copyright Enforcement Directive was that holders of IPR may take steps, such as requesting injunctions, to prevent infringement. The right to take action is not unlimited, as these directives themselves recognise. According to Recital 16, any implementing rules must, in particular, respect Article 15(1) of the e-Commerce Directive, which prohibits national authorities from adopting measures which would require an ISP to carry out general monitoring of the information that it transmits on its network. In L’Oréal, the ECJ ruled that that prohibition would apply to national measures which require an ISP actively to monitor all the data of each of its customers in order to prevent any future infringement of intellectual-property rights; furthermore, any such general monitoring would be disproportionate and also costly contrary to Article 3 of the Copyright Enforcement Directive.
While the ECJ seemed to rule out the monitoring on the basis of the e-Commerce Directive, it went on to consider the matter in the light of fundamental rights. It noted that Article 17(2) of the Charter protects IPR, but went on to underline that that provision does not state that such rights would be inviolable. Referring to Case C‑275/06 Promusicae, the ECJ determined that the fundamental right to property must be balanced against other fundamental rights. Somewhat surprisingly, the ECJ highlighted the rights to run a business as significant (Article 16) before turning to those insignificant civil and political rights comprising right to protection of their personal data and their freedom to receive or impart information and found in Articles 8 and 11 of the Charter respectively. Presumably this is not an implicit favouring of economic rights, but a recognition that it is Scarlet that is party to the case, rather than the unidentified group of subscribers whose privacy and expression rights might be violated. The ECJ concluded that the court order would require the ISP Scarlet to install a complicated, costly, permanent computer system at its own expense, thereby infringing Article 16 (As well as Directive 2004/48); that it would infringe data protection rules in Article 8 EUCFR (the Data Protection Directive was not directly considered); and, as there was a risk the monitoring system might not distinguish adequately between unlawful content and lawful content, there was a concomitant risk of blocking of lawful communications which would be a violation of freedom of expression.
The decision is significant as it runs contrary to the political view, which was to favour filtering as a mechanism to enforce copyright. Measures based on filtering technologies have been already proposed in Italy, Ireland and – of course – the UK (Digital Economy Act), and a number of judicial rulings have dealt with filtering requirements and other types of request for ISP action (see e.g. Newzbin 2). These will have to be reviewed in the light of the ECJ’s ruling. It is too soon to say that copyright holders may take no action against pirates. The ECJ has perhaps deliberately phrased its judgment so as not to rule on, for example, internet blocking or on the cutting off of persistent file-sharers’ Internet connections. Nonetheless, while there may be space for some obligations on ISPs which do not involve pre-emptive monitoring, it will certainly be more difficult for copyright holders to enforce their rights as a consequence of the judgment.
The decision also comes at a crucial point: the Commission is in the process of reviewing both the e-Commerce Directive (December 2011) and the Information Society Directive (Spring 2012). According to Chantal Hughes, the spokesperson for the EU Internal Market Commissioner Michel Barnier, the Commission ‘warmly welcome[s] the clarification made by the Court of Justice on the interdiction, envisaged in the e-commerce directive, to impose obligations for ISPs to monitor the Net.’ (source: EurActiv)
The Commission also stated that the ruling was in line with the Commission’s own interpretation, an interesting statement given that the Commission had been viewed as more inclined to interpret existing rules as favourable to filtering and that Barnier in particular is a champion of copyright protection. Other groups have more wholeheartedly welcomed the ruling as helping to guarantee a free and open Internet in Europe. Finally, the judgment might have more geographically wide reaching effects; it may have some influence in the debates in the USA, as a number of bills, such as Stop Online Piracy (SOPA) and Protect IP, have been put before Congress and hotly debated.