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Belgian ISPs fight for their lives

We investigate an unexpected landmark ruling which threatens the legal protections ISPs enjoy in Europe.19 Jul 2007

A text transcription follows.

This transcript is for anyone with a hearing impairment or who for any other reason cannot listen to the MP3 audio file.

The following is the text spoken by OUT-LAW journalist Matthew Magee.

Hello and welcome to Out-Law Radio, the weekly podcast that keeps you up to date on the all the twists and turns in the world of technology law. Every week we bring you the latest news and in depth features that help you to make sense of the ever changing laws that govern technology today.

My name is Matthew Magee and this week we investigate the implications of a controversial ruling from Belgium on ISPs and file sharing that could undermine the entire legal basis of the ISP business.

But first, the news.

  • French gambling monopoly undermined by web firm’s victory; and
  • EU Commissioner plans criminalisation of bomb info publishing.

An online gambling firm has won the right to operate in France, undermining the former state monopoly on gambling. France’s highest court, the Cour de Cassation, overturned a previous ruling which barred Malta’s Zeturf from operating in France. The Court said a monopoly would break EU competition rules. The Court ruled that the previous monopoly was not consistent with EU competition law. Article 49 of the EC Treaty guarantees free movement of services within the EU. One French legal expert said that the ruling will probably open up France’s betting market, but only in those areas where French monopolies already operate. “I think France will have to open sports betting to all EC companies, but only in the case where there was already a market with only one actor, such as horse racing betting,” French law expert Cedric Manara told online news service The Register.

Europe’s Commissioner for Justice plans to make it a criminal offence to publish bomb‑making instructions on the internet. Franco Frattini said that anti-terror plans he will publish in the autumn will include a criminalisation of the publishing of certain material. The new law would extend to internet service providers, he said, and would mean that any ISP which did not block sites containing instructions would face charges. Frattini told reporters recently of his plans.

Frattini: My package in autumn will be quite ambitious one. First of all I would propose the incrimination of dissemination of information of bomb-making and explosives. I think it is simply not possible to make people free to instruct other people on internet on how to make a bomb. That has nothing to do with the freedom of expression you can image and my proposal will be to criminalise actions and instructions to make a bomb.

That was this week’s OUT-LAW News.

A fundamental equilibrium was upset earlier this month in a Belgian Court room when a judge made a radical and surprising decision that could upset the balance of the entire internet access industry. The Belgian Court of First Instance stripped ISPs of a long-enjoyed and vital protection against liability for the traffic they carry, just as the post office cannot be held responsible for a hateful letter or a jiffy bag full of cyanide, so ISPs could not be responsible for the fact that subscribers used the service for illegal means, such as sharing music illegally. Until now.

For the first time in Europe a Court ordered that an ISP must take action against file sharers. It told ISP Scarlet, which used to be a wing of Italy’s Tiscali, that it must use filtering software to weed out file sharing activity.

The case was brought by Belgian artists’ and authors’ rights group SABAM. Thierry Dachelet explained why the group turned to the Courts.

Dachelet: SABAM wish to stress that a lot of internet users are massively downloading copyright works by way of peer to peer software without the authors, composers and publishers having authorised it or having been remunerated. It seriously wrongs the rights on us who are members of SABAM and the artists in general and while jeopardising a part of the cultural heritage. Through all these things we decide at SABAM to try to stop the illegal exchange of music of our SABAM repertoire but it means in fact of the world repertoire in Belgium.

Geert Somers is the head of the legal work group at the Belgian ISP Association. He said that the ISPA and Scarlet will argue that ISPs must be allowed to be just intermediaries, as permitted in the EU’s E-commerce Directive.

Somers: They are intermediaries. That is what we are arguing of, that is what ISPA is arguing for the de-censorship of the Belgian ISPs that in the first place, we are questioning whether they could ask a measure of this kind to an ISP. And that is not totally clear yet let’s say. In the first place when it comes to illegal downloading, music piracy is the user’s responsibility because the user needs to respect the law. Of course the user is not doing this and in practice it is difficult to get after the user. So that is why the right holders since many years are trying to direct themselves more towards the ISPs which is more, let’s say, an easier victim. But my main concern in this is that the music industry is actually shifting the responsibility for the prevention of piracy to the ISP sector.

The problem boils down to a basic clash between two European Union Directives. The E‑commerce Directive says that ISPs cannot be liable for content. The Copyright Directive says that ISPs must protect other people’s copyright.

Struan Robertson is an IT lawyer with Pinsent Masons, the firm behind OUT-LAW. He explains the problem.

Robertson: The E‑commerce Directive was passed first. It said that intermediaries that were acting as mere conduits were protected but the Copyright Directive came along next and it said that copyright owners should be able to get court orders against intermediaries like ISPs if the services are used for piracy. There was always this possibility that circumstances would come up where the E-commerce Directive and Copyright Directive would clash. The two laws were meant to complement each other but the clash was always possible and it has really always been for a Court to decide how exactly we should balance the protections that exist in the E-commerce Directive with the powers that are given to copyright owners under the Copyright Directive.

Somers believes that the laws that come from the E‑commerce Directive should be more powerful than those coming from the Copyright Directive.

Somers: The E-commerce Directive needs to be seen as prevailing over the Copyright Directive so as a matter of fact I think the relationship between the various directives, the E-commerce Directive, the Copyright Directive and the IPR Enforcement Directive will have to be further examined by the court in appeals. As a matter of fact also the implementing legislation in Belgium is at the moment not entirely clear and I strongly believe the judge did not examine this relationship sufficiently.

Clearly the decision is one of a low court, and further appeals could overturn it. If it holds, though, could it apply to other ISPs in Belgium? Could it eventually spread throughout Europe? The simple answer is that nobody yet knows.

But even within Belgium some are playing down how widely the ruling will apply. Jean Margot, a spokesman for major Belgian telecoms firm Belgacom, told us that the decision may not even apply to it.

He said that we must not compare Belgium’s legal system to that in England or elsewhere, that it is not a precedent based system. Every case can come up with different results, he said, and a new case from a new judge could come up with a different result on ISP liability.

Somers gives perhaps a more nuanced view, saying that precedents are not strong in Belgium but can be influential.

Somers: Yes, okay we do not have like the rule nevertheless of course we also use case law in Court to show what Courts decide in our cases. And if the judge believes that in that case the circumstances are similar or the same he will probably come to the same decision.

Rights group SABAM says that it will press its Court advantage and will demand that the other ISPs fall into line. Dachelet again.

Dachelet: A couple of days ago we addressed the main Belgian access providers, Belgacom and Telenet, to draw their attention to the legal decision that has been taken in the case opposing SABAM to Tiscali which has become Scarlet and before starting any legal proceedings with a view to imposing the decision to all other Belgian access providers on paying of penalty will wish to check whether the latter are ready to negotiate an agreement or not. And well at the moment we have to await answers.

So could this spread more widely? Could UK ISPs be affected by the decision? The UK ISP Association thinks that providers here are safe for the moment.

A spokesman told us that the way that UK law implements the E-commerce Directive means that ISPs are just intermediaries. He said that there is a possibility that a new reading of the laws could emerge – after all the Belgium decision was a ruling on existing law not the creation of a new one – but he says that filters, or what he calls censorship, must be government business and not put in the hands of a corporation.

Drawing comparisons with the restrictions ISPs place on child abuse material where a government agency is involved in guiding them in what they should and should not block, he says that it is up to the government to decide what should be blocked and that what he calls corporate censorship should not be allowed.

In the Belgian case the court said that Scarlet must use software called Audible Magic, which a dourt expert said could identify material on peer to peer systems which infringed copyright. It gave the company six months in which to implement the order, imposing a penalty of €2,500 for every day of delay beyond that date. The ISPs have reservations about the ability of Audible Magic to operate on the necessary scale. The Belgian ISPA says that the Court’s own expert, who recommended the software, also had some doubts about scalability.

The ISPA also says that it should not be forced to pay the bill for protecting the assets of other private companies. Somers again.

Somers: I believe that ISP should not be bearing the costs thereof because they after all were also talking about private interests and there is a lot of right holders out there of economic and other interests so if everyone is going to ask similar measures to be borne of which the costs have to be borne by ISPs I do not think we can continue the internet the way we are doing it. There is a lot of internet users but a lot of internet users that do not do any illegal behaviour at all. So by imposing any costs on the ISP which will then be transferred to users you are making all users pay for a measure that is only in the interest of private parties with which they do not have anything to do.

SABAM has already written to Belgium’s major ISPs seeking compliance with the new ruling. As uncertainty and ripples of fear spread through Europe’s ISP community about how infectious the Court’s decision will be, the music and ISP industries will watch Scarlet’s appeal case with the concentration of businesses that know that their future could be on the line.

That’s all we have time for this week, thanks for listening.

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Make sure you tune in next week; for now, goodbye.