The rise and rise of online intermediaries in the governance of the Internet and beyond – connectivity intermediaries

Abstract

This article is the first of a trilogy that examines the growing role of online intermediaries within the governance of the Internet and beyond. The theoretical background for this is provided by two very different narratives of regulation of and through technology: Spar's regulatory cycle in response to new technological inventions and Foucault's account of the panopticon effect in modern regulation. The currency of these narratives is tested against the regulatory reality of the Internet, which is increasingly informed by cases and legislative measures taken against online intermediaries, such as ISPs, Google, eBay, Facebook or Wikipedia. This raises the question of why intermediaries should be such popular regulatory targets in the first place. Recent case law and legislative instances implicitly highlight the importance of intermediaries – as transactional and communicative chokepoints – within the regulatory agenda per se. If intermediaries can be controlled or used as regulatory vehicles, so can the regulatory space in question. This first paper examines the legal treatment of connectivity intermediaries, i.e. ISPs, to be followed by two papers focusing on search engines, on the one hand, and Web 2.0 providers and other hosts, on the other hand.

Keywords:

• Internet
• regulation
• governance
• intermediaries
• ISP liability
• surveillance
• Foucault
• net neutrality
• blocking

Notes

Barlow, John Perry. 1996. A declaration of the independence of cyberspace, https://projects.eff.org/~barlow/Declaration-Final.html.

I have previously touched upon this in Kohl, U. 2007. Jurisdiction and the Internet – regulatory competence over online activity, 157ff. Cambridge: Cambridge University Press.

Spar, Debora L. 2001. Ruling the waves – cycles of discovery, chaos, and wealth from the compass to the Internet. New York, Harcourt.

Foucault, Michel. 1977. Discipline and punish – the birth of the prison. London: Penguin.

Spar, Ruling the waves, 9.

Spar, Ruling the waves, 8.

Foucault, Discipline and punish, 202f.

Foucault, Discipline and punish, 204.

Foucault, Discipline and punish, 202.

Foucault, Discipline and punish, 221, see also on the same page: ‘discipline is the unitary technique by which the body is reduced as a “political” force at the least cost and maximized as a useful force.’

Directive 00/31/EC, implemented in the UK by the Electronic Commerce (EC Directive) Regulations 2002, SI 2002/2013. See also European Commission. 2003. First Report on the Application of Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on Certain Legal Aspects of Information Society Services, in Particular Electronic Commerce, in the Internal Market. Brussels: European Commission. COM(2003)702 final.

While the Directive takes a broad approach to ‘information society services’ and by implication to ‘service providers’, the effect of the immunities is circumscribed by (1) the functional requirements on the intermediaries (that is, the restrictions on the qualifying intermediaries); and (2) the restrictions on the remedies falling within the immunities.

47 USC §§ 230(e)(1) and (e)(2) respectively.

Or more specifically: Online Copyright Infringement Liability Limitation Act.

Art 15(2) and Art 12(3), 13(2), 14(3) respectively.

2002/58/EC.

DTI. 2006. Consultation document on electronic commerce directive: the liability of hyperlinkers, location tool services and content aggregators, 26. http://www.bis.gov.uk/files/file35905.pdf.

521 F3d 1157 (9th Cir 2008).

Fair Housing Council of San Fernando Valley v Roommates.com 521 F3d 1157, 1164 (9th Cir 2008).

Often, as, for example, in copyright infringement cases, the actions or prosecutions are more about standard setting and deterrence than the actual relief or sanction.

Swire, Peter P. 1998. Of elephants, mice, and privacy: international choice of law and the Internet. International Lawyer 32: 991, 1019ff. The role of intermediation itself often triggers growth, for example, due to the network effect (i.e. the phenomenon that the value of some facilities rises with the number of users, e.g. the more individuals use the telephone, Facebook, or eBay, the more useful they are).

As reflected in the preconditions for a legitimate invasion of a fundamental right; the measure must (1) have a legal basis, (2) satisfy a pressing social need and (3) be proportionate, i.e. suitable to achieve its intended aim, necessary and proportionate in light of the consequences on the right protected.

Some ISPs have argued that they will not remove material in the absence of a court order to that effect See, for example, Kirk, Jeremy. 2009. Irish ISP: e won't block the Pirate Bay. PC World, 24 February, http://www.pcworld.com/article/160114/irish_isp_we_wont_block_the_pirate_bay.html.

For a list of the top UK ISPs by subscriber size, see ISPreview, Top 10 UK ISPS, http://www.ispreview.co.uk/review/top10.php

Twentieth Century Fox Film Corp & Ors v British Telecommunications Plc [2011] EWHC 1981 (Ch), para 59.

Although, in principle, it is possible to have a civil judgement enforced in a foreign jurisdiction, the foreign state may not be willing to do so; in any event the defendant could move its operations to another country.

In the context of the immunities under the Electronic Commerce Directive, there may be issues whether the service falls within the definition of the Directive, e.g. ‘for remuneration’; see Article 2(a) defining ‘information society services’ by reference to the definition of ‘services’ in Art 1(2) of 98/34/EC, as amended by Directive 98/48/EC. See also Recitals 17 and 18 of the Electronic Commerce Directive.

Sony Music Entertainment (UK) Ltd, Sony Music Entertainment Inc, Polydor Ltd, UMG Recordings Inc and Virgin Records Ltd v EasyInternet Cafe Ltd [2003] EWHC 62 (Ch) where EasyInternet Cafe supplied customers with access to the Internet and, at a cost of £5, made them copies of any recordings downloaded by them. The court rejected the cafe's argument that the illegal copying was involuntary: by copying the customers' files without checking the content, the cafe turned a blind eye to their infringement. Also, because primary copyright infringement is a strict liability tort, there was no need to establish that the cafe knew that the source was copyrighted. But note, under s 97(1) of the Copyright, Designs and Patents Act 1988, a defendant is not liable to pay damages if he or she ‘did not know, and had no reason to believe, that copyright subsisted in the work to which the action relates…’

Godfrey v Demon Internet Ltd [1999] EWHC QB 244, where Demon Internet Ltd was the host of the material and not just providing connectivity; this case falls within the third part of this trilogy.

[2006] EWHC 407 (QB), [2007] 1 WLR 1243.

The judgment is not entirely clear on the respective roles of each of the intermediaries, or more specifically whether BT hosted the material or not: Bunt v Tilley [2006] EWHC 407, para 5-8 and 68.

Bunt v Tilley [2006] EWHC 407, para 56.

Bunt v Tilley [2006] EWHC 407, para 36, 37.

Bunt v Tilley [2006] EWHC 407, para 23. 25.

As in fact happened, see Bunt v Tilley [2006] EWHC 407, para 61, 66, 67. Note Godfrey v Demon Internet Ltd [2001] QB 201, where it was held that the ISP that hosted the news group exchanges, including the defamatory one, was liable after it received notice of the defamatory content and failed to remove it.

Bunt v Tilley [2006] EWHC 407, para 52-55.

Bunt v Tilley [2006] EWHC 407, para 72, 73. Hosts are considered in Part 3 of this trilogy.

Bunt v Tilley [2006] EWHC 407, para 56, see also 57.

Contrast to Godfrey v Demon Internet Ltd [2001] QB 201 applying s.1 of the Defamation Act 1996 (prior to the Directive).

The wrongdoers may either be the providers of the copyright infringing material or their users.

2001/29/EC.

2004/48/EC, which is applicable to intellectual property rights more generally.

[2011] FCAFC 23, affirmed Roadshow Films Pty Ltd v iiNet Ltd [2010] FCA 24, now pending before the Australian High Court. See also, Thom Holwerda, ‘Judge: Norwegian ISP does not have to block the Pirate Bay’ (7 November 2009) Osnews, http://www.osnews.com/story/22456.

In the UK, courts have drawn a line between intermediaries that merely facilitate infringements (outside ‘authorising’ which is necessary for secondary infringement) and those that procure the infringement. CBS Songs Ltd v Amstrad Consumer Electronics plc [1988] AC 1013. Also, under ss 22–26 of the Copyright, Designs and Patents Act 1988, secondary infringement is dependent on the state of mind of the alleged infringer: he or she must know, or have reason to believe, that he/she deals with an infringing copy of the work.

Roadshow Films Pty Ltd v iiNet Ltd (No 3) [2010] FCA 24, point 14 of the summary.

Roadshow Films Pty Ltd v iiNet Ltd (No 3) [2010] FCA 24, para 430 – 442.

Roadshow Films Pty Ltd v iiNet Ltd (No 3) [2010] FCA 24, para 441.

Roadshow Films Pty Ltd v iiNet Ltd [2011] FCAFC 23, para 257.

[2011] EWHC 1981.

Under s.97A of Copyright, Designs and Patents Act 1988 (concerning injunctions against services providers).

Twentieth Century Fox Film Corp v Newzbin Ltd [2010] EWHC 608.

As required by Art 8(3) of the Copyright Directive (2001). See Twentieth Century Fox Film Corp & Ors v British Telecommunications Plc [2011] EWHC 1981, para 108, 113.

s.97A of the Copyright, Designs and Patents Act 1988. This is not a requirement under Art 8 of the Copyright Directive (2001).

Twentieth Century Fox Film Corp & Ors v British Telecommunications Plc [2011] EWHC 1981, para 148, see also para 146 for the rationale of Art 8(3); distinguishing Columbia Film Industries Inc v Robinson [1987] 1 Ch 38, para 130ff.

Twentieth Century Fox Film Corp & Ors v British Telecommunications Plc [2011] EWHC 1981, para 149.

Twentieth Century Fox Film Corp & Ors v British Telecommunications Plc [2011] EWHC 1981, para 159f.

Art 8(3) of the Copyright Directive (2001) refers to ‘copyright and related right’; Justice Arnold reserved judgement as to whether similar blocking injunctions may also be obtained in defamation and privacy cases (para 191).

Twentieth Century Fox Film Corp & Ors v British Telecommunications Plc [2011] EWHC 1981, para 96. Orders requiring piracy sites to be blocked have also already been granted against ISPs in Denmark, Belgium, Italy, Sweden and Austria.

Out-law.com, ‘High Court rules The Pirate Bay operators and users guilty of copyright infringement’ (20 February 2012) Out-law.com, http://www.out-law.com/en/articles/2012/february/high-court-rules-the-pirate-bay-operators-and-users-guilty-of-copyright-infringement/.

For example, Kleinschmidt, Broder. 2010. An international comparison of ISPs liability for unlawful third party content. International Journal of Law and Information Technology 18: 332, 353.

Twentieth Century Fox Film Corp & Ors v British Telecommunications Plc [2011] EWHC 1981, para 192-198.

Case C-324/09 (ECJ, Grand Chamber, 12 July 2011), referral from L'Oreal SA & Ors v EBay International AG & Ors [2009] EWHC 1094.

L'Oreal SA & Ors v EBay International AG & Ors Case C-324/09 (ECJ, Grand Chamber, 12 July 2011), para 139, 140.

L'Oreal SA & Ors v EBay International AG & Ors Case C-324/09 (ECJ, Grand Chamber, 12 July 2011), para 144.

Twentieth Century Fox Film Corp & Ors v British Telecommunications Plc [2011] EWHC 1981, para 156, 162; L'Oreal SA & Ors v EBay International AG & Ors Case C-324/09 (ECJ, Grand Chamber, 12 July 2011), para 143.

Case C-70/10 (ECJ, Third Chamber, 20 November 2011) See also Out-law.com, ‘Search and ISP companies may be asked to help tackle copyright infringement, says minister’ (15 September 2011) Out-law.com http://www.out-law.com/en/articles/2011/september/search-and-isp-companies-may-be-asked-to-help-tackle-copyright-infringement-says-minister/.

Scarlet v SABAM Case C-70/10 (ECJ, Third Chamber, 20 November 2011), para 40; see also para 36 where the court said that such a general monitoring obligation would also be incompatible with Art 3 of the Enforcement Directive 2004/48 which states that the measure referred to by the Directive must be fair and proportionate and must not be excessively costly.

Scarlet v SABAM Case C-70/10 (ECJ, Third Chamber, 20 November 2011), para 46-48, relying on Art 16 of the Charter of Fundamental Rights of the European Union.

See Art 8 and 11 of the Charter of Fundamental Rights of the European Union, Scarlet v SABAM Case C-70/10 (ECJ, Third Chamber, 20 November 2011), para 50.

Scarlet v SABAM Case C-70/10 (ECJ, Third Chamber, 20 November 2011), para 22.

3 December 2010. http://trade.ec.europa.eu/doclib/docs/2010/december/tradoc_147079.pdf, signed by the UK on 26 January 2012.

Williams, Christopher. 2011. BT and Phorm: how an online privacy scandal unfolded. The Telegraph, 8 April. http://www.telegraph.co.uk/technology/news/8438461/BT-and-Phorm-how-an-online-privacy-scandal-unfolded.html.

Such disclosure orders are also available in other actions. For their use in online defamation, see Totalise plc v Motley Fool Ltd [2001] EWCA Civ 1897, where the disclosure order was against a website operator (i.e. host) rather than a connectivity intermediary.

Pursuant to German jurisprudence, the subscriber to an Internet account is liable (injunctive relief and costs to cover any warnings) for the copyright infringements of members of the household or other users of the account: Haftung des Anschlusshabers für volljährige Tochter, (LG Düsseldorf, 27 May 2009, 12 O 134/09); Haftung für Ehemann und Kinder (OLG Köln, 23 December 2009, Az 6 U 1001/09).

2004/48/EC. See Coudert, Fanny, and Werkers, Evi. 2010. In the aftermath of the Promusicae Case: how to strike the balance. International Journal of Law and Information Technology, 18: 50.

Productores de Música de España (Promusicae) v Telefónica de España SAU (Telefónica) Case C-275/06 [2008] ECR I-271, para 58 noting that Art 8(1) read in conjunction with Art 8(3)(e) does not require Member States to lay down an obligation to communicate personal data in the context of civil proceedings. The same permissive language is used in Art 27(4) of the Anti-Counterfeiting Trade Agreement (2011).

Productores de Música de España (Promusicae) v Telefónica de España SAU (Telefónica) Case C-275/06 [2008] ECR I-271, para 54f (in light of Art 15(1) of the Personal Data Directive 2002/58/EC, with special focus on Article 13(1) of Directive 95/46/EC); LSG-Gesellschaft zur Wahrnehmung von Leistungsschutzrechten GmbH v Tele2 Telecommunication GmbH Case C-55/07 [2009] ECR I-1227 (interpreting Art 8(3) of the Copyright Directive 2001/29/EC; noting that Member States must interpret the Directives in such a way as to allow a fair balance to be struck between the various fundamental rights involved, thereby rejecting that the tension between copyright protection and data protection must be resolved in favour of the latter).

Coudert, Fanny, and Werkers, Evi. 2010. In the aftermath of the Promusicae Case: how to strike the balance. International Journal of Law and Information Technology 18: 50, 51.

LSG-Gesellschaft zur Wahrnehmung von Leistungsschutzrechten GmbH v Tele2 Telekoomuncation GmbH Case C-55/07 [2009] ECR I-1227, para 43-45.

LSG-Gesellschaft zur Wahrnehmung von Leistungsschutzrechten GmbH v Tele2 Telekoomuncation GmbH Case C-55/07 [2009] ECR I-1227, para 33.

Norwich Pharmacal Co & Others v Customs and Excise Commissioners [1974] AC 133.

See also s.124B of the Communications Act 2003 (as inserted s.4 by the Digital Economy Act 2010) which specifically refers to the possibility of such requests.

[2011] EWPCC 6, discussed in Tumbridge, James. 2011. MediaCat scratches the Norwich Pharmacal order. European Intellectual Property Review 33, no. 10: 559.

Media CAT Limited v Adams and Ors [2011] EWPCC 6, para 99, 100, 106.

Section 3-10, inserting s.124A-12H into the Communications Act 2003 (enforcement actions – in the form of notification of infringement, with the possibility of suspending Internet access if illegal copying continues – may be taken by the ISP at the initiative of the rights holder against the subscriber to Internet access).

Haute Autorité pour la Diffusion des Œuvres et la Protection des Droits sur Internet. In fact, the creation of this authority was part of the Creation and Internet Law 2009.

This is a voluntary accord with the movie and music business. See Anderson, Nate. 2011. Major ISPs agree to “six strikes” copyright enforcement plan. ars technical (July) http://arstechnica.com/tech-policy/news/2011/07/major-isps-agree-to-six-strikes-copyright-enforcement-plan.ars.

See note 65.

According to industry insiders, this already occurs in the UK and is likely to become a critical issue during the Olympics.

An ISP may, for example, charge a content provider for making the site available at a faster speed.

Kendrick, James. 2009. T-Mobile Germany blocks iPhone Skype over 3G and WiFi. Gigaom, 6 April. http://gigaom.com/mobile/t-mobile-germany-blocks-iphone-skype-over-3g-too/.

600 F 3d 642 (DC Cir 2010).

The US Court of Appeal for the District of Columbia held that the FCC lacked the authority to force ISPs to keep their networks open to all forms of content. Here the FCC had tried to stop Comcast from interfering with the use of P2P networking applications by its subscribers in the name of protecting scarce network capacity. US Federal Communications Commission, Broadband Policy Statement (5 August 2005) FCC 05-151, http://www.publicknowledge.org/pdf/FCC-05-151A1.pdf.

FCC. 2011. Preserving the open Internet – final rule. 23 September. http://www.gpo.gov/fdsys/pkg/FR-2011-09-23/pdf/2011-24259.pdf.

The Guardian. 23 June 2011. Net neutrality enshrined in Dutch Law. http://www.guardian.co.uk/technology/2011/jun/23/netherlands-enshrines-net-neutrality-law. On the UK position, see Greer, Duncan. 2010. UK government abandons net neutrality. 17 November. Wired.co.uk, http://www.wired.co.uk/news/archive/2010-11/17/uk-government-abandons-net-neutrality.

Article 8(4)(g) of the Framework Directive 2002/21/EC, as amended by Directive 2009/140/EC.

Article 20(1)(b) and 21(3)(c) and (d) of the Universal Service Directive 2002/22/EC, as amended by Directive 2009/136/EC.

Art 22(3) of the Universal Service Directive 2002/22/EC, as amended by Directive 2009/136/EC.

BBC, 2011. BT Content Connect service face ‘two-tier net’ claims. 4 January. http://www.bbc.co.uk/news/technology-12112389 . See also, BEREC (9 March 2012). BEREC preliminary findings on traffic management practices in Europe show that blocking of VoIP and P2P traffic is common, other practices vary widely. http://www.erg.eu.int/doc/2012/TMI_press_release.pdf.

Out-Law.com, ‘Net neutrality not possible without ISP transparency, says EU telecoms regulators’ (6 October 2011) Out-Law.com http://www.out-law.com/en/articles/2011/october/net-neutrality-not-possible-without-isp-transparency-says-eu-telecoms-regulators/.

An unfair competition claim in these circumstances may be based on Art 102 of the Treaty on the Functioning of the European Union (abuse of a dominant market position).

Haftung des Access-Providers (OLG Frankfurt am Main, 22 January 2008, 6 W 10/08).

ROLEX v eBay (BGH, 19 April 2007, Az I ZR 35/04), further discussed in Part 3 of this series.

Haftung des Access-Providers (LG Düsseldorf, 13 December 2007, 12 O 550/07).

Matters that are likely to fall within the issue of proportionality, based on Art 10(2) of the European Convention of Human Rights, see also discussion in Twentieth Century Fox Film Corp & Ors v British Telecommunications Plc [2011] EWHC 1981, para 199-201.

It is specifically excluded in the Electronic Commerce (EC Directive) Regulations 2002.

O'Neill, Sean. 2011. Government ban on Internet firms that do not block child sex sites. The Times, 10 March. http://technology.timesonline.co.uk/tol/news/tech_and_web/the_web/article7055882.ece.

For the IWF's role in the blocking context, see http://www.iwf.org.uk/services/blocking.

Richardson, Tim. 2006. Cleanfeed working overtime, says BT. The Register, 7 February. http://www.theregister.co.uk/2006/02/07/bt_cleanfeed_iwf/. For a description of the Cleanfeed system see also, Kleinschmidt, Broder. 2010. An international comparison of ISP's liabilities for unlawful third party content International Journal of Law and Information Technology 18: 332, 337.

Home Office, Prevent Strategy (June 2011) Cm 8092, para 10.108.

European Commission, Impact Assessment, Accompanying document to the Proposal for a Council Framework Decision amending Decision 2002/474/JHA on combating terrorism (Brussels, SEC(2007) 1424/2) 29.

Out-law.com. 2012. New code of conduct should require ISPs to take down radical extremist content, MPs say. Out-law.com, 7 February. http://www.out-law.com/en/articles/2012/february/new-code-of-conduct-should-require-isps-to-take-down-radical-extremist-content-mps-say/.

See s.5 and 6 of the Electronic Commerce Directive (Terrorism Act 2006) Regulations 2007.

Out-law.com. 2012. New code of conduct should require ISPs to take down radical extremist content, MPs say. Out-law.com, 7 February. http://www.out-law.com/en/articles/2012/february/new-code-of-conduct-should-require-isps-to-take-down-radical-extremist-content-mps-say/.

2006/24/EC; implemented in the UK by The Data Retention (EC Directive) Regulations 2009. In Ireland v Council and Parliament Case C-301/06 (ECJ, Grand Chamber, 10 February 2009) the ECJ upheld the validity of the Directive against the ‘technical’ challenge by Ireland according to which the predominant purpose of the Directive was to facilitate the investigation, detection, and prosecution of serious crime, rather than the approximation of national laws to benefit the functioning of the internal market (Art 114 TFEU) that had provided the basis for its adoption. See also, Feiler, Lukas. 2010. The legality of the Data Retention Directive in light of the fundamental rights to privacy and data protection. European Journal of Law and Technology, 1, no. 3.

2002/58/EC.

Article 11 of the Data Retention Directive (2006).

In the UK, the detention period is for 12 months: s.5 of the Data Retention (EC Directive) Regulations 2009. Even more wide ranging data retention laws are being proposed in the US by the mis-labelled ‘Protecting Children from Internet Pornographers Bill’ which was approved in July 2011 by the House of Representatives Committee.

Section 4(c) and Part 3 of the Schedule of the Data Retention (EC Directive) Regulations 2009.

See also Recital 9, see also Recital 25 and Art 4.

EU Commission, Consultation on reform of Data Retention Directive: emerging themes and next steps (Brussels, 15 December 2011, 18620/11), http://register.consilium.europa.eu/pdf/en/11/st18/st18620.en11.pdf, para 11. See also, European Commission. 2011. Report from the Commission to the Council and the European Parliament – Evaluation Report on the Data Retention Directive (Directive 2006/24/EC). Brussels: European Commission. 18 April 2011, COM(2011) 225 final.

For additional purposes see s.2 of The Regulation of Investigatory Powers (Communications Data) Order 2010 No. 480.

But see also s.25(5) any such order must be approved by a resolution of each House of Parliament.

Bonnier Audio v Perfect Communication Sweden Case C-461/10 (Advocate General, 17 November 2011).

Home Office. 2011. Review of counter-terrorism and security powers – review of finding and recommendations, January. Cm 8004, http://www.official-documents.gov.uk/document/cm80/8004/8004.pdf, 25f.

Brown, Ian. 2011. Communications data retention in an evolving Internet. International Journal of Law and Information Technology 19, no. 2: 95, 97ff; see also Feiler, ‘The legality’, part 7.3.4.

Gesetz zur Neuregelung der Telekommunikationsüberwachung (BVerfG, 11 March 2008, 1 BvR 256/08) http://www.bundesverfassungsgericht.de/entscheidungen/rs20080311_1bvr025608.html, para 148, 149, 155; note Art 10(1) of the German Constitution: ‘The privacy of correspondence, posts and telecommunications shall be inviolable.’; discussed in Hornung, Gerrit, and Schnabel, Christoph. 2009. Data protection in Germany II: recent decisions on online searching of computers, automatic plate recognition and data retention. Computer Law & Security Review 25: 115, and Feiler, ‘The legality’, part 3.

Hornung and Schnable, ‘Data protection’, 121.

The Regulation of Investigatory Powers (Maintenance of Interception Facilities) Order 2002 (SI 2002/1931).

Mobbs, Paul. 2002. Interception and surveillance – the RIP Act and its implications for individuals and service providers. GreenNet CRIR Toolkit Briefing 13, http://www.fraw.org.uk/mei/archive/gn-irt/irtb-13.pdf.

Nevertheless, regional police are likely to play a growing part in surveillance operations: Out-law.com. 2011. Regional police to join forces to conduct surveillance. Out-law.com, 26 July. http://www.out-law.com/page-12113.

The most obvious method of limiting the effect of surveillance is encryption., but whether this would be sufficient to escape the all encompassing monitoring by Echelon is unknown.