Matt Lonsdale is a JD candidate at Dalhousie University
In June of 2010, the UK’s Digital Economy Act came into force. The Act “includes provisions relating to the UK’s communications infrastructure, public service broadcasting, copyright licensing and online infringement of copyright, and security and safety online and in video games”. The Act was controversial from the start, particularly the provisions that intended to deal with the problem of online copyright infringement by imposing new obligations on Internet service providers (ISPs).
Under the Act, ISPs can be required to send cease-and-desist letters to customers accused of engaging in infringing activities, supply lists (stripped of identifying information) of repeat infringers to rights holders and limit or temporarily suspend the Internet access of subscribers. While it found support with organizations such as the Federation Against Software Theft, critics argued that the Act favoured copyright holders at the expense of customer’s privacy. They claimed it was pushed through Parliament quickly and with little discussion, pointing out that only 6% of all Members of Parliament participated in its debate. Charles Dunstone, chairman of the TalkTalk Group, one of the UK’s largest ISPs, charged that the Act was “unfair, unwarranted and won't work”. In July TalkTalk, along with fellow Internet service provider BT, requested a judicial review of the Act. Their application was approved recently this month. The review should be held before the UK High Court of Justice in February 2011.
The Act is being challenged on four grounds.
Was the European Commission given an opportunity to examine the Act?
European Parliament Directive 98/34/EC (the “Technical Standards Directive”) requires member states to notify the European Commission of any new rules which would apply to “Information Society Services”. The purpose of the notification is to give the Commission and other EU member states the chance to assess whether the rules would create barriers to trade. BT and TalkTalk argue that they offer Information Society Services, that the Act consists of rules on such services and that the required notification should have taken place while the Act was in draft form and still capable of amendment.
Does the Act comply with European Union e-commerce legislation?
The ISPs argue that the cost of compliance with the Act and the fines that may be imposed for non-compliance have the effect, if not the form, of imposing financial liability on them for the infringing acts of their users and that they are protected from this liability by European Parliament Directive 2000/31/EC (the “E-Commerce Directive”). They also claim that the provisions of the Act which allow for the restriction or termination of a subscriber's Internet access without a court order violate the Directive. This is not the first time provisions such as these have been examined in the EU context, and similar efforts outside of the EU have been discussed in previous IP Osgoode posts here and here.
Does the Act comply with European Union data protection and privacy legislation?
The Act places obligations on ISP’s to retain and process Internet traffic data. European Parliament Directive 2002/58/EC (the “Privacy and Electronic Communications Directive”) holds that such data can only be processed in specific circumstances. BT and TalkTalk claim that the uses of traffic data envisioned by the Act do not fit into any of these circumstances. They further claim that an obligation to retain data other than what is collected in the “standard course of business activity” violates European Parliament Directive 2002/58/EC (The “Data Retention Directive”).
Is the Act “proportional”?
While the court initially approved the first three grounds, they withheld judgement on whether they wanted to allow the challenge to the law’s proportionality. This last ground has now been accepted and will be considered during the review. In broad terms, the ISPs allege that the Act provides limited benefits, and that these do not justify the restrictions it places on privacy and the right to free expression. They find sources for these rights in a host of EU and UK regulations, case law and legislation.
Copyright holders have suggested that the concern for customer’s privacy is a cover up for the ISPs’ real goal in challenging the legislation: the protection of their own financial interests. The Motion Picture Association’s Chris Marcich stated that “[T]he pursuit of this claim by BT/TalkTalk appears to be an attempt to avoid or delay playing their rightful part in tackling online piracy, and instead to continue maximising profit by continuing to make money from broadband traffic generated in part by the downloading of illegal content taken from rights holders without permission."