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 Update 44: November 1, 2006

Liability of Providers of Hyperlinks and Location Tools (PHLTs) in EU Member States

1. E-Commerce Directive, 2000

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 ("Directive on electronic commerce"), deals with the question of the liability of intermediary service providers, in particular hosting services. The Directive exonerates intermediary service providers from any liability where they have played a passive role in transmitting information from a third party. The Directive exempts web-hosting providers from liability for illegal content transmitted over their servers, if they are ignorant of the illegal nature of the content and immediately block access to such content should they become aware thereof.

The E-Commerce Directive does not specifically deal with the liability of providers of hyperlinks.  But according to Article 21 of the Directive, the Commission shall submit to the European Parliament, the Council and the Economic and Social Committee a report on the application of this Directive before 17 July 2003, and thereafter every two years. In examining the need for an adaptation of this Directive, the report shall in particular analyse the need for proposals concerning the liability of providers of hyperlinks and location tool services, "notice and take down" procedures and the attribution of liability following the taking down of content. 

 

2. First Report on the application of the E-Commerce-Directive, 2003

The first report on the application of the E-Commerce directive adressed the issue of liability for hyperlinks. The report states: 

In addition to the matters dealt with by Articles 12-14, some Member States 68 decided to provide for limitations on the liability of providers of hyperlinks and search engines.69 This was motivated by the wish to create incentives for investment and innovation and enhance the development of e-commerce by providing additional legal clarity for service providers. Whilst it was not considered necessary to cover hyperlinks and search engines in the Directive, the Commission has encouraged Member States to further develop legal security for internet intermediaries. It is encouraging that recent case-law in the Member States recognizes the importance of linking and search engines to the functioning of the internet. In general, this case-law appears to be in line with the Internal Market objective to ensure the provision of basic intermediary services, which promotes the development of the internet and e-commerce. Consequently, this case-law does not appear to give rise to any Internal Market concerns 70

In a few cases 71 national courts have already interpreted the Directive. However, in these cases, the national implementing measures of the Directive had not yet been adopted in the States concerned.

There is still very little practical experience on the application of Articles 12-14, but the feedback received so far from the Member States and interested parties has, in general, been positive. The approach taken in the Directive appears to have wide reaching support among stakeholders. In any case the Commission will, in accordance with Article 21, continue to monitor and rigorously analyse any new developments, including national legislation, case-law and administrative practices related to intermediary liability and will examine any future need to adapt the present framework in the light of these developments, for instance the need of additional limitations on liability for other activities such as the provision of hyperlinks and search engines.72

 

68 Spain, Austria and EEA-State Liechtenstein and Portugal in its draft law. 

69 Spain and Portugal have opted for the model of Article 14 both for search engines and hyperlinks, whereas Austria and Liechtenstein have opted for the model of Article 12 for search engines and of Article 14 for hyperlinks. 

70 For example in France TGI Paris, référé, 12 mai 2003, Lorie c/M. G.S. et SA Wanadoo Portails, in Germany in the case Verlagsgruppe Handeslblatt v. Paperboy, aus dem Bundesgerichtshof (BGH), Urteil vom 17. Juli 2003 – I ZR 259/00. 

71 Cases Deutsche Bahn v. XS4ALL, judgement by Gerechtshof te Amsterdam (Court of Appeals), 762/02 SKG, of 7.11.2002, and Deutsche Bahn v. Indymedia, judgement by Rechtbank Amsterdam (District Court), KG 02/1073, of 20.6.2002, in the Netherlands (judgements available at http://www.rechtspraak.nl); and Case Public Prosecutor v. Tele2 in the EEA-country Norway, judgement by Borgarting Lagmannsrett (Court of Appeals), 02-02539 M/01, of 27.6.2003. Tele2 was acquitted when the public prosecutor dropped charges against it.

72 The approach of the Member States who opted to legislate on the hyperlinks and search engines does not seem to give rise to a risk of fragmentation of the Internal Market. The Commission is, however, actively following work in Member States relating to liability issues such as the fundamental work carried out by "Le Forum des droits sur l'Internet" in France, which has published recommendations on hyperlinks called "Hyperliens: Statut Juridique", published 3.3.2003, and "Quelle responsabilité pour les créateurs d'hyperliens vers des contenus illicites, published 23.10.2003, both available at http://www.foruminternet.org/recommandations/.

 

  • 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 (Directive on electronic commerce); Brussels, 21.11.2003; COM(2003) 702 final

 

3. European Member States with specific legislation regarding providers of hyperlinks and location tools

  • Spain and Portugal have extended to PHLT's the protection granted to hosts by the E-Commerce-Directive

  • Hungary and Poland have extended to location tool providers the protection granted to hosts by the E-Commerce-Directive

  • Austria has extended to the providers of location tool services the protection granted to conduits by Directive 2000/31/EC, and it has also extended to hyperlink providers the protection granted to “hosts” by the Directive.

For more information see the "Linking Law" Section and the Legal-IST report on the Liability of Internet Service Providers. The report also discusses court cases in European Union Member States without specific legislation on the matter. You will find most of the cases also mentioned on my website (and many more), especially in the "Decisions from other European countries" section.  

Also see:

 

4. The LEGAL-IST Project

LEGAL-IST is an EC funded project aimed to support research in the IST Priority from a legal point of view by studying the legal implications of current research initiatives and providing suggestions for relevant implementation strategy. It also contributes to emerging policies for strengthening the EU regulatory framework through consensus-building among policy-makers. The LEGAL-IST project legal experts, in conjunction with the associated research projects’ representatives, have conducted legal issue studies on 9 different legal topics/research areas, one of them on the Liability of Internet Service Providers.

In September 2006, I have attended the LEGAL-IST Workshop "Crucial legal issues in IST-business" in Brussels, where a discussion about the liability of internet service providers took place.

a. Conclusions of the Study:

"GENERAL PROPOSAL
It would be necessary to review the liability of ISPs from the economic-legal point of view to reach a conclusion, in view of the current maturity of the Market and the vertical legislation of the Member States and of the European Economic Area States, on the need to make extensive or not to PHLTs the liability system provided for in articles 12 to 14 of Directive 2000/31/EC. Should it be concluded that such legislation is necessary, it should be implemented in a manner such that:

  • The special role that PHLTs play in the Information Society is taken into account, in order to promote the provision of their services subject to a reasonable liability system.

  • The effects that NTD procedures could have on freedom of expression and third party intellectual property rights unless mechanisms such as counter-notice and put-back procedures are considered.

...

About adwords:
Given the present lack of specification of the legal nature of the adwords service and the consequent legal uncertainty and distortion of the Internal market this may cause, it would be advisable to analyse this issue in the light of EC legislation and the laws of the Member States on Advertising, Industrial Property and Competition to decide whether or not it would be pertinent to harmonise legislation on the matter throughout the entire European Union..."

 

b. Own view

The EU still does not provide an adequate legal framework for the regulation of search engines and their functions. In my point of view such legislation is necessary to end the legal uncertainty.

The views expressed in this section are my own and do not  reflect the views of the Legal-IST Project. I would welcome comments of my readers of any kind (Do you agree with my statements? Do you also believe that additional EU legislation is required in this area? What would be a reasonable liability system for PHLTs in your point of view? etc.). I will post them on my website with the next update unless you don't want me to. Also feel free to visit the Legal-IST Website and participate in the discussion forum on several other topics not covered by my website, e.g. Software Agents or RFID.

 

The EU should grant search engines broad immunity from contributory liability for infringing activities by third parties, as long as the person, whose rights were violated has reasonable chances to go after the content or host provider. Therefore a two-fold approach should be discussed:

  • If the website in question is hosted in an EU member state or the content provider / domain owner resides in an EU member state, search engines should be immune from liability.

  • If the website in question is not hosted in an EU member state and the content provider / domain owner does not reside in an EU member state, the protection granted to hosts by the E-Commerce Directive should be extended and a Notice and Takedown Procedure should be introduced.

 

WHY???

 

1.  The importance of search engines and the need for a reasonable liability system has been recognized in other countries, e.g. the USA. Even without the DMCA Safe Harbor Provisions, search Engines in the USA are pretty much immune from contributory liability for linking to unlawful content.

 

  • 512 d DMCA Information Location Tools.— A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the provider referring or linking users to an online location containing infringing material or infringing activity, by using information location tools, including a directory, index, reference, pointer, or hypertext link, if the service provider—

    (1) (A) does not have actual knowledge that the material or activity is infringing;

    (B) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or

    (C) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material;
    (2) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and
    (3) upon notification of claimed infringement as described in subsection (c)(3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity, except that, for purposes of this paragraph, the information described in subsection (c)(3)(A)(iii) shall be identification of the reference or link, to material or activity claimed to be infringing, that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate that reference or link.

     

     

  • According to the court in the Perfect 10 v. Google case a search engine does not commit contributory or vicarious infringement by indexing and linking to infringing websites. As long as search engines refrain from actively encouraging users to visit infringing third-party websites, they are immune from all secondary infringement claims in the USA, even if they have knowledge of the direct infringement. As long as the extent of vicarious or contributory liability of search engines was very unclear, search engines have embraced the opportunity to take advantage of the safe harbour provisions set forth in section 512 d of the DMCA, in an attempt to avoid the uncertainty of liability outside them. But they no longer depend on the safe harbour provisions, if the Perfect 10 decision holds on appeal (see Update 41: Google, Perfect 10 appeal thumbnails case).Google and other search engines could simply stop removing sites from their search results, even after receiving a take down notice. I personally doubt that search engines will stop complying with the notices, because otherwise the demand for stricter regulation of search engine activity might arise.

    For more information on the Perfect 10 v. Google Case see: http://www.linksandlaw.com/news-update38-thumbnail-perfect-10-case.htm

 

  • Section 230 of the Communications Decency Act, which does not apply to intellectual property law, gives a blanket immunity to search engines for both providing and removing access to material. According to the Act "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider". Effectively, this section immunizes search engines from torts committed by the operators of the linked-to web sites.

 

US law acknowledges the importance of search engines for the functioning of the information-society. The EU should also take into the account the special role that search engines play on the internet and in order to promote their services subject them to a reasonable liability system. In my point of view that means: search engine liability only in cases where it is absolutely necessary to protect the rights of people, especially when they have no chance of getting the infringing content removed with reasonable effort.

 

2. DMCA takedown notices are susceptible to abuse and there is no efficient protection against the overzealous removal of content by search engines

  • The DMCA takedown notices are susceptible to abuse. According to a report by researchers who analyzed hundreds of takedown notices nearly one third of the takedown notices submitted to online service providers (under the Digital Millennium Copyright Act) are for claims that may not justify takedown. The study found an unfortunately high incidence of questionable uses. Examples cited by the report include use of the process to protect uncopyrightable material, stifle criticism and punish competitors. (See: Study examines DMCA Cease-and-Desist Letters)
     

  • Notice and take down provisions should be introduced, but should also - with regard to search engines - be limited to the above mentioned cases. This would reduce the risk of abuse. A company  e.g. would no longer be able to use the procedure to harm its competitors, as long as these reside within the EU.
     

  • The risk of abuse of the procedure is not so high with regard to host providers. Many of them have a contract with the alleged infringer and will have financial interests that will prevent them from overzealously removing content. In many circumstances the host provider will consider the interests of the alleged infringer and make a fair determination based on the facts presented. But there is no relationship between the search engine and the alleged infringer. How can protection against the overzealous removal of content by search engines be ensured in this case? Search engines have nothing to win by not complying with a notice. The operators of the linked-to-websites are not their customers. Search engines have no financial interest in keeping a web site in their index. At least a detailed set of counter-notification procedures should be introduced.

 

3. Equal or better protection by going after the content or host provider

  • In order to attack allegedly infringing web sites effectively, notifications have to be send to all major search engines. But even then the material in question is still available online. A notification sent to the service provider responsible for hosting such web sites would provide equal or better protection.

 

Search Engines and Adwords

Finally a very short look at "Search Engines and AdWords". In my opinion there should be no legal difference between hosting a web site and "hosting an advertisement". The EU should clarify that the protection granted to hosts also applies to search engine ad programs. 

 

 

 

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The Links & Law website is updated regularily, so  check back for updated information and resources about search engine and linking issues.

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 Latest News - Update 71

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