New Obligations for Internet Intermediaries in the Digital Single Market — Safe Harbors in Turmoil?

Abstract

The E-Commerce Directive (hereafter “ECD”) has been crucial for the flourishing of the information society. The directive introduced horizontally across all sectors a framework of conditional liability enabling the development and functioning of online services in various forms. Internet intermediaries, performing mere conduit, caching or hosting functions are shielded from liability for the illegal conduct of third parties provided that the intermediary is in no way involved with the information transmitted, or, in the case of hosting services, does not have knowledge or awareness of the illegal activities taking place. Upon obtaining such knowledge or awareness, the service is required to expeditiously act to stop the illegal conduct. Portrayed as the gatekeepers of information online, intermediaries have been targeted by the European Digital Single Market in various contexts. The general theme is the following: the digital environment provides numerous opportunities, but these are tightly linked to regulatory challenges and as gatekeepers of information, online platforms should embrace more responsibility as far as the availability of illegal content on their services is concerned. As a result, a line of policy and legislative actions seek to nuance the existing liability regime for Internet intermediaries. The emerging framework deeply differs from the conditional liability regime within the ECD. Even though the safe harbour pursuant to Article 14 of the ECD is said to remain intact, the landscape is nowadays supplemented by a new Directive on copyright in the Digital Single Market (hereafter “DSM directive”), an amendment to the Audio-visual Media Services Directive (hereafter “amended AVMSD”) and a guidance on the interpretation of the Unfair Commercial Practices Directive (hereafter “UCPD Guidance”). These pieces of legislation generate further layers of obligations on online intermediaries such as monitoring obligations, duties of diligence, reporting and flagging, requests to cooperate with rightholders, requirements to conclude licensing agreements, obligation to adopt appropriate measures to prevent unlawful content and calls for them to design platforms in a way that prevents consumers from being misled. Moreover, this new emerging framework is strongly characterised by problem-driven approach to regulation depending on the kind of content at stake. Theoretically, the new regime for intermediaries would have to function in a complementary manner with the current ECD conditional liability framework. However, the emphasis on the adoption of automatic filtering systems and a clear encouragement to invest in such technologies results in a dangerous clash with Articles 14 and 15 of the ECD. More precisely, using filtering systems blurs the line between active and passive hosting providers, a distinction subject to detailed analysis by the CJEU in a number of cases. The jurisprudence of the court has gradually associated the requirement of knowledge and awareness of copyright infringing content with the active role of an intermediary. Such a role goes beyond the mere provision of services neutrally and the technical automatic processing of data provided by users. In other words, proactive measures suggest that intermediaries would retain control over what is uploaded on their services by third parties. Such an approach would transform hosting providers from passive into active ones, eventually depriving them from the benefit of the safe harbour exemption from liability. The inconsistency holds true even though it has been mentioned by the Commission that such measures, when taken as part of the application of the terms of services of the online platform, would not render these service providers active ones, in particular when they process large volumes of material through automatic means. Furthermore, Article 15 of the ECD expressly prohibits Member States from imposing on intermediaries monitoring obligations of a general nature which is also seriously compromised with the new obligation upon intermediaries. The coherence and consistency of this new liability framework is thus highly questionable. The article argues that intermediaries are no longer subject to a conditional liability, but instead fall within the ambit of an organisational liability regime, whereby liability depends on the structure adopted by the undertaking in relation to the diverse types of content. The following addresses three categories of illegal content which have become the subject of legislative attention at an EU level as part of the DSM, namely copyright infringing, harmful (hate speech and content harmful to children) and misleading content.