Filtering Policies and Gambling Regulation in Europe: The CJEU Applies Net Neutrality Principles

December 22nd, 2012 | Posted by Claude-Etienne Armingaud in Case Law | Europe | IT

After almost a decade of vigorous debate among interested parties, the Court of Justice of the European Union (CJEU) has finally issued a decision that moves toward unifying the European perspective on internet filtering. While the CJEU decision itself is specific to the gambling industry, the core principles of the decision may be extended to other fields.

Several recent decisions by the CJEU put into a strict perspective the validity of the position held by certain European member states with regard to gambling, namely state-sponsored monopolies [see for instance CJEU case C-42/07]. At the same time, the opening of the online gambling field to authorized operators in European countries, such as France, went hand-in-hand with the creation of administrative agencies. Those agencies, such as France’s Autorité de Régulation des Jeux en Ligne (ARJEL) possess, among other things, the prerogatives and powers to demand the take-down of crossborder gambling and gaming websites deemed illegal under national law and accessible by individuals connecting from the same country.

On the other hand, on the copyright and peer-to-peer front, collective rights management agencies have been
heavily involved in regulating the contents made available on the Internet. Indeed, for the past decade since the
appearance of Napster, right-holders have been trying relentlessly to limit the impact of online copyright infringement, by pursuing action against individual downloaders in the first place, and then against the website publishers making illegal content accessible.

On both fronts, though, the temptation for grasping control over Internet content can be seen lingering around. In the SABAM vs. Scarlet decision (CJEU case C-70/10), published on November 24, 2011, the CJEU applied a five-prong
approach on Internet control ordered by third parties on Internet Service Providers (ISPs) that may be extended to the gaming and gambling industry.

In SABAM, the Belgian collective rights management entity had requested ISPs to cut access to several websites that allowed the illegal download of copyrighted material.

Although the national laws of EU member states specify the requirements for obtaining an injunction against the operator of an online service deemed illegal, such as national law must be compliant with the mandatory limitations
set forth by European law, notably in the e-Commerce Directive 2000/31/EC. The e-Commerce Directive provides in Article 15.1 that “Member states shall not impose a general obligation on providers, when providing the services covered by Articles 12, 13, and 14, to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity.” This has been understood by many commentators as the founding European net neutrality principle.

As a consequence of this European net neutrality principle, national authorities may not adopt measures which would require an ISP to carry out general monitoring of the information that it transmits on its network.

In the SABAM decision, the Belgian courts requested that the CJEU clarify whether European law would permit an injunction that would require an ISP to implement a filtering system for all electronic communication transiting through its services where such filtering would:

  • Apply impartially to all of the ISP clients;
  • In a preventive manner, as opposed to a reactive manner where infringing content, once identified and notified by the right-holders, would be dealt with;
  • In a permanent manner, as opposed to a temporary measure; and
  • At the sole costs of the ISP.

Following its advocate-general, who had concluded in the preceding legal opinion that this scheme was obviously disproportionate with regard to the rights to be protected, the court held that the implemented measures have to be “fair and proportionate and must not be excessively costly.

Additionally, the court foresaw the practical consequences of such general filtering and blocking—the ISPs need to appreciate the legality of the online services, which would thus “require active observation of all electronic communications conducted on the network of the ISP concerned and, consequently, would encompass all information to be transmitted and all customers using that network.” In other words, instead of relying on an evidenced take-down request from the right-holders, such right-holders were requesting that the ISPs themselves perform all the necessary checks on all the material they make available to ensure no infringing content would be available. At the same time, such a measure would have been in complete contradiction with the founding principle of Article 15 of the e-commerce directive and the net neutrality principle.

Moreover, the court drew attention to the fact that to permit the ISP to be the judge of what internet content was to be deemed illegal would likely adversely affect freedom of expression by blocking, albeit in a collateral manner, legal
services and information. According to the court, the ISP bears a technical role in the individual’s access to the Internet.
Therefore, its involvement should be limited to such a technical role, except in cases where the obviousness of the illegality of the targeted content prevails.

Finally, to the great satisfaction of many privacy advocates, the court seized the opportunity to state incidentally that the IP addresses used for ISP subscribers’ identification purposes were personal data. Indeed, in spite of the strict regulation of personal data processing in Europe, many national laws of agencies, in order to implement fast proceedings against illegal online file-sharing, were quick to dismiss the need for compliance with data protection
law. This latest observation also calls for moderation in the processing of online data and information, be it by rightholders, collective rights management organizations, or administrative agencies all over Europe.

First publication: K&L Gates – Global Government Solution 2012 with E. Drouard

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