Ireland IP & Technology Law Blog

CJEU finds online social networking provider not required to install filtering system

The CJEU has held* that EU law precludes an injunction requiring an online social networking provider to install a system for filtering information stored on its servers by users, in order to prevent files from being made available to the public in breach of copyright.

The Belgian court asked the CJEU whether Directives 2000/31 (the E-Commerce Directive), 2001/29 (the InfoSoc Directive), and 2004/48 (the Enforcement Directive), were to be interpreted as precluding a national court from issuing an injunction against a hosting service provider requiring it to install a filtering system. It was not in dispute that the owner of an online social networking platform, such as Netlog, which stores information provided by users of that platform on it servers, was a hosting service provider within the meaning of Article 14 of the E-Commerce Directive.

In November 2011, in Scarlet Extended SA v Societe belge des auteurs, compositeurs et editeurs (SABAM) Case C-70/10, the CJEU held that EU law precludes the imposition of an injunction by a national court which requires an internet service provider to install a filtering system with a view to preventing illegal downloading of files (see our discussion of the ECJ’s judgment in Scarlet Extended SA here).

The CJEU followed its earlier findings in Scarlet Extended SA. Itnoted that the InfoSoc Directive and the Enforcement Directive provide that holders of intellectual property rights may apply for an injunction against operators of online social networking platforms (such as Netlog), who act as intermediaries. However article 15 of the E-Commerce Directive prohibits national authorities from adopting measures which would require a hosting service provider to carry out general monitoring of the information that it stores.

The proposed filtering system would require the hosting service provider to: identify the files on its servers likely to contain works in respect of which intellectual property holders could claim to hold rights; to determine which of those files were being stored and made available to the public unlawfully; and lastly, to prevent files that it considered to be unlawful from being made available. 

The CJEU found that the imposition of injunction would require the hosting service provider to actively monitor almost all the data relating to all of its service users, in order to prevent any future infringement of intellectual property rights. It followed that that injunction would require the hosting service provider to carry out general monitoring, which was prohibited by Article 15 of the E-Commerce Directive.

The injunction was therefore inconsistent with EU law, and would result in a serious infringement of the freedom of the hosting service provider to conduct its business. In those circumstances, the CJEU held that the injunction to install the contested filtering system could not be regarded as respecting the requirement that a fair balance be struck between the protection of the intellectual property right of copyright holders, and that of the freedom to conduct business enjoyed by hosting service providers.

The CJEU’s decision will be welcomed by online social networking providers as it shows that it is incompatible with EU law to require them to install filtering systems in order to prevent infringements of copyright.

*Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v Netlog NV, Case 360/10, 16 February 2012

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