EU consultation e-Commerce Directive; BREIN response regarding liability of intermediaries

Public consultation on the future of electronic commerce in the internal market and the implementation of the Directive on electronic commerce (2000/31/EC).
Introduction

This document dated 05.11.2010 is the
answer by the Dutch BREIN foundation, category INFOSOC LAW,
professionals of information society law, to issue 5 of the public
consultation on the future of electronic commerce. BREIN is the Dutch
foundation for content protection against structural infringement and
abuse representing rightholders and interested parties concerning music,
film, games, interactive software and digital books. BREIN is
established in the Netherlands and answers this consultation as category
INFOSOC LAW, professionals of information society law.

Issue 5: Interpretation of the provisions concerning the liability of intermediary information society service providers.

52. Overall, have you had any difficulties with the interpretation of
the provisions on the liability of the intermediary service providers?

If so, which? Yes. The liability exemptions are invoked inappropriately
to reject calls for assistance against copyright infringements, both by
legitimate ISPs i.e. the traditional [*] access providers and hosting
providers and in particular by illegal intermediaries whose
businessmodel systematically and structurally uses the availability of
unauthorized content on the internet and/or usenet. Relief for injured
rightholders has been available through courts only instead of through
cooperation models with traditional hosting and access providers. Over
the past five years an extensive body of case law was formed in which
the Dutch Courts have developed the relevant factors to determine
whether or not the liability exemptions apply. For example:

– Court of Appeal Amsterdam, 15 juni 2006, LJN: AX7579, 1157 / 04 (BREIN Zoekmp3)
– District Court of Utrecht 26 August 2009, 250077 HA ZA 08-1124 (BREIN Mininova)
– Court of Appeal Amsterdam, 16 March 2010, 200.007.866/01KG (BREIN Shareconnector)
– Preliminary injunction judge District Court of Amsterdam, 30 July
2009, 428212 KG ZA 09 1092 WT/RV (BREIN Neij, Kolmisoppi en Warg)
– District Court of Amsterdam, 22 October 2009, 436360 KG ZA 09-1809 WT/RV (BREIN – The Pirate Bay)
– Preliminary injunction judge District Court of The Hague, 2 juni 2010, KG ZA 10-639 (FTD – Eyeworks Film & TV Drama B.V.)

It is noteworthy that in many of these cases hosting providers and
access providers have been defending anonymous websites by arguing on
their behalf that their businessmodel of facilitating infringement or
structurally making use of the availability of unauthorized content
(e.g. by indexing links) was not unlawful. It was practice amongst
traditional hosting and still so amongst access providers in the
Netherlands to reject calls from injured rightholders for assistance
against infringements as widely as possible and to assist only in case
they are forced to do so by a court verdict.

[*] By traditional ISPs we mean access providers that connect
individual users to the internet and hosting providers that host and
connect websites to the internet. The EU Directive subject to this
consultation dates from a time that the internet architecture still was
top down and content sharing services were not yet considered.

53. Have you had any difficulties with the interpretation of the term
actual knowledge in Articles 13(1) (e) and 14 (1) (a) with respect to
the removal of problematic information? Are you aware of any situations
where the criterion has proved counter-productive for providers
voluntarily making efforts to detect illegal activities?

Yes. In the Netherlands it is practice amongst traditional hosting and
access providers to interpret this concept as narrowly as possible in
order to limit the instances in which they have to assist in curtailing
infringements. For example, while case law has determined that a
notification must be reliable, hosting and access providers nevertheless
have challenged the notion that notices from the joint civil
enforcement body for rightholders (i.e. BREIN, a foundation) are
reliable. In one preliminary proceeding against a hosting provider for
an anonymous bittorrent website structurally facilitating use of
evidently infringing content, the judge has ruled that BREIN is a
reliable party whose notices may not be dismissed as partial and
unreliable.

With respect to traditional hosting providers it is practice
that they do not make any effort to check or verify the identity of
their customers and as a result they are hosting anonymous websites
which have registered as a customer with false or insufficient identity
details and pay through anonymizing payment providers such as Paypal. An
incorrectly registered anonymous website whose businessmodel
structurally makes use of the availability of unauthorized content on
the internet in practice gets ample time after notification to the
hosting provider, to pack up its bags and seamlessly continue its
unlawful practices at another hosting provider again anonymous and
incorrectly registered.

Websites and services whose (combined)
businessmodel systematically and structurally makes use of the
availability of unauthorized content on the internet, have, as a result
of litigation holding them liable, begun to deliberately segregate their
activities in order to deny that they have any actual knowledge and as a
consequence deny such liability. An example is indexing sites or
services that identify the location of popular infringing content on
usenet. They argue they do not upload or supply content, as it hosted
and made available on usenet and they also argue no downloads are made
from their site as they do not use direct links and moreover that
downloading illegal content for private use is allowed under Dutch
legislation. Usenet providers in turn argue they are caching or in any
event nothing more than hosting and supplying only resellers that in
turn argue they do not host anything but only are selling subscriptions
for access to servers of the providers. The envisaged result of the
argument is that nobody would be liable for the large-scale infringement
that ensues from this set-up.

54. Have you had any difficulties with
the interpretation of the term expeditious in Articles 13(1)(e) and
14(1)(b) with respect to the removal of problematic information?

Yes.
Websites whose businessmodel structurally makes use of the availability
of unauthorized content tend to be anonymous and registered with their
hosting provider with false or insufficient identity details. Such
websites do not react to notices or reject them. In practice this conc
rns more than 99% of the cases. Nevertheless hosting providers tend to
contact such websites again asking them to respond to the notice. The
hosting providers do not suspend their service to the website in the
event they do not have correct identity details that enable that the
owner / operator of the site can be held liable. The result is that the
website gets ample time after notification to pack up its bags and
seamlessly continue its unlawful practices at another hosting provider
again anonymous and incorrectly registered.

This situation persists even
with the voluntary Notice & Take Down code of conduct in place. We
strongly feel there should be an obligation for hosting and access
providers to verify the identity of their customers. This would enable
rights holders to hold the responsible persons liable. The conditions
under which an ISP is obliged to provide these details to an injured
party are narrowly defined by Dutch lower courts and the Dutch Supreme
Court. As a consequence, the obligation to verify the identity of its
customers can be safely imposed on ISPs without the risk of abuse of
such obligation.

– Supreme Court, 25 November 2005, LJN: AU4019,
C04/234HR (Lycos/Pessers)
– Preliminary Injunction judge District
Court of The Hague, 5 January 2007, LJN: AZ5678 276747 / KG ZA 06-14
(BREIN/KPN)
– Court of Appeal Amsterdam, 3 juli 2008, LJN: BD6223
106.007.074/01KG (BREIN-Leaseweb)
– Preliminary Injunction judge
District Court of s-Hertogenbosch, 8 July 2008, 174537  KG ZA 08-261
(BREIN-Euroaccess)
– Court of Justice of the European Union, 29
January 2008, Case C-275/06 (Promusicae/Telefonica)

Furthermore we
strongly feel that this obligation must be accompanied by the obligation
to immediately suspend services to a customer which has registered with
false or insufficient identity details.

55. Are you aware of any notice
and take-down procedures, as mentioned in Article 14.1(b) of the
Directive, being defined by national law?

National law in the
Netherlands does not define a Notice and Take Down procedure. A
voluntary Notice & Take Down code of conduct has been adopted in the
Netherlands. This code of conduct serves as a skeleton guideline on
which actual NTD policies can be framed.

56. What practical experience
do you have regarding the procedures for notice and take-down? Have they
worked correctly? If not, why not, in your view?

A voluntary Notice
& Take Down code of conduct has been adopted in the Netherlands.
This code of conduct has not had any relevance with respect to
traditional access providers and their subscribers. With respect to
traditional hosting providers the code of conduct has served to create
awareness amongst hosting providers that they are required to respond to
notices about unlawful websites and unlawful information on websites.
Issues still exist with respect to what constitutes actual knowledge and
expeditious and with the anonymous operation of the websites and their
false or insufficient registration with their hosting providers.  Please
also see the answers to questions 53 and 54 here above for further
details. BREIN does not enter into Notice & Take Down arrangements
with websites that structurally make use of the availability of
unauthorized content as these should exert preventive supervision
themselves.

BREIN does not enter into arrangements for preventive
supervision (filtering) with such websites when their owners/operators
are anonymous and, as a consequence, cannot be held liable for their
actions or lack thereof.  Of course filtering postings on the level of a
website, which can be done manually as well as automatically, is
different from filtering traffic on network level and does not raise
privacy issues.

We point out that, quite incongruously, in their Notice
& Take Down policies intermediaries tend to require proof of
copyright, power of attorney and other details while the same
intermediaries have no or false or insufficient details about their own
customers who have been engaging in unlawful activities.

57. Do
practices other than notice and take down appear to be more effective?
(notice and stay down, notice and notice)

We believe notice and take
down must include stay down in order to be effective. This certainly
should be so for identical posts or files and if possible also for
similar posts or files, unless there is a clear indication that such
posts or files concern authorized content. As indicated by a Dutch
court, an inverse procedure to notice and take down could be adopted: a
notice & restore.

Most assuredly notice and take down without stay
down is totally ineffective for websites which are structurally making
use of the availability of unauthorized content on the internet. A
website that has been made inaccessible should stay inaccessible. The
problem has been that such websites have moved abroad, often for hosting
providers that are willing to obscure the physical location of their
servers even further, e.g. through IP tunneling, or otherwise beyond the
EU. This problem can be solved to a large extent by access providers
blocking access for their subscribers to such a foreign website.

Notice
and notice in the case of unlawful websites has had the effect of
providing ample time for the website to pack up their bags and relocate
seamlessly to another provider.

Please also see answers to questions 53,
54 and 56.

58. Are you aware of cases where national authorities or
legal bodies have imposed general monitoring or filtering
obligations?

In the Netherlands the District Court of Utrecht has ruled
in 2009 that the peer-to-peer (BitTorrent) index site Mininova.org had
to take measures preventing its listing of links that evidently
referred to unauthorized content such as commercially produced films, tv
series, games and music. Although the court ruled that Mininova was not
directly infringing copyright -unless in those instances that its
administrators/moderators (re)posted links themselves- the court ruled
that Mininova was structurally facilitating and encouraging large-scale
infringement. The Court considered that Mininova should prevent the
posting of links to evidently infringing content and remove such links
that were already posted. Although BREIN provided Mininova with a list
of around 9000 titles of current commercial entertainment content,
Mininova ultimately decided to remove all links posted by users, i.e.
around 1.3 million links of which they acknowledged around 90% referred
to infringing content, and to continue with less than 10.000 authorized
links only. Mininova used to be more popular than The Pirate Bay. The
number of unique monthly visitors decreased from around 40 million
worldwide to around 650.000 today. Their Alexa ranking decreased from 50
to 2575. This development illustrates that websites with business
models that structurally make use of the availability tend to lose their
appeal once they filter access to illegal entertainment
content.

– District Court of Utrecht 26 August 2009, 250077 HA ZA
08-1124 (BREIN Mininova)