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Digital Economy Act in limbo- 21/03/2011
The High Court has granted permission for a judicial review of the Digital Economy Act (the Act). The Act, which would impose duties on the largest internet service providers (ISPs) aimed at combating infringement of copyright material on the internet, is being challenged on the grounds that it is disproportionate, incompatible with various aspects of EU law and breaches human rights.
The provisions
The Act as it currently stands requires ISPs to notify subscribers if their IP address has been reported by copyright owners as infringing their rights. If the copyright is infringed on more than 3 occasions in a 12 month period, the ISP will provide the owner (on request) with anonymous infringement lists. This will allow the owner to apply to the court for an order disclosing the infringer's identity, with a view to commencing proceedings.
Perhaps most controversially, the Act may potentially make those subscribers who offer internet access to others (such as hotels offering Wi-Fi access) responsible for their customers' infringements. The Act also gives the Government the power to introduce requirements that ISPs take measures such as blocking access to infringing sites and limiting subscribers' connections.
For further information on the Act, please see our e-bulletin dated 13 October 2010.
The challenge
BT and Talk Talk, two of the UK's largest ISPs, have received permission to challenge the Act on the basis that its provisions arguably:
- Should have been notified to the European Commission before enactment but were not, and are therefore unenforceable. The EU Technical Standards Directive provides that draft technical regulations / rules on services relating to Information Society services such as broadband internet must be scrutinised by the Commission to ensure they do not constitute over-regulation or form undue barriers to trade within the EU.
- Are incompatible with the E-Commerce Directive, which limits the liability of ISPs for information they transmit as a mere conduit for others to access an electronic communications network. The argument is that the initial and technical obligations, together with the cost sharing provisions and the maximum £250,000 penalty provisions, actually impose a liability on ISPs for information transmitted over which they have no control or knowledge.
- Are incompatible with the Directive on Privacy and Electronic Communications. The obligation for ISPs to provide copyright infringement lists to copyright owners requires ISPs to process and make available personal data and infringes subscribers' rights to confidentiality.
- Are a disproportionate restriction on the ISPs' right to free movement of services into the UK and breach subscribers' rights to privacy and freedom of expression.
Conclusion
The expedited hearing should take place this week. In the meantime, seemingly undeterred, the government has set out draft secondary legislation proposing that the costs of progressing the reports and maintaining the lists will be borne 75% by ISPs and 25% by copyright owners. The Culture Secretary Jeremy Hunt has also recently asked Ofcom to consider the viability of the "site blocking" provisions.
The court's decision will be of interest to the industry and consumers alike. Should the court uphold the Act in its current form, ISPs and subscribers who offer internet services to others may face a heavy burden. Businesses such as hotels, holiday parks and conference centres, as well as universities, libraries and other entities providing Wi-Fi services, will need to actively take measures to minimise their liability under the Act.