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Internet liability rules change after YouTube case?

The Internet liability regime for hosting providers have been subject of different interpretations by courts in Italy and a new interesting position came up with the decision of the Court of Turin (Italy) involving YouTube and Google which overturned its initial decision of a few months ago introducing new principles of Internet liability for online operators.

I had reported in this article about the recent victory of YouTube in an interim proceeding before the Court of Turin where it was found not liable for the videos published on its video sharing platform by its users in breach of Delta TV Programs’ intellectual property exploitation rights.

Now the Court of Turin reached quite different conclusions as part of the Appeal to such decision.  The Court deeply reviewed the Internet liability exemption regime for hosting providers set forth by the EU E-Commerce Directive 2000/31.  And in particular, the main principle prescribed by the E-Commerce Directive according to which hosting providers are not obliged to monitor the contents published by their users and are liable for them unless once they become aware of them they promptly act in order to remove them.  But the E-Commerce Directive was issued in 2003 and there is no doubt that much has changed surrounding the Internet during the last 10 years.

Internet liability regime according to the Court of Turin

The position taken by the Court of Turin is that the EU Directive prescribed an Internet liability regime applicable only to hosting providers that are “passive” i.e. merely make available to their users a web space for their contents.  On the contrary, entities like YouTube that index the available information, organize them and show them to their users based on their tastes also showing advertisements from which they gain profits fall under the category of the so called “new generation” of hosting providers that would be subject to a more stringent liability regime.

On the basis of this reasoning the Court held that YouTube was not obliged to monitor contents published by its users, unless the rights’ holder had reported the breach of its copyrights providing the URLs of the challenged videos requiring their removal and the prohibition of their future publication of the same videos on the site.  And the core of the decision is indeed on whether the Court could order YouTube to prevent the future publication of the challenged videos.  

Such service is currently offered by YouTube through a tool named Content ID, but only upon request of the rights’ holder who takes on the relevant responsabilities and costs.  The Court of Turin on the contrary held that YouTube is obliged – following a challenging notice from a rights’ holder – to autonomously put in place such tool at its own costs obtaining the so called reference file from the challenged videos available on its platform not only taking down the existing URLs of the challenged videos, but also impeding the future publication of the same videos by its users with different URLs.

Consequences on Internet liability of the decision

This solution would validate a notice and take down procedure applicable to both current and future challenged contents that is even more effective that the one introduced through recent regulations on copyright breaches occurring on the Internet covered in this article.  At the same time, according to the Court, such approach would be in line also with the decision of  the European Court of Justice in the recent SABAM case where the Court banned any type of direct monitoring aimed  at preventing “any future infringement of intellectual-property rights” since this would have required an “active monitoring” on the users and exchanged information.  The view of the Court seems to be that since YouTube can rely on the Content ID tool no active monitoring was required and the order could be issued.

Therefore it is unclear whether the consequence of such decision is that hosting providers need to put in place a highly sophisticated system such as the one adopted by YouTube or they would better not to do it since in such case courts might deem the requested activity to be excessively burdensome.

Internet liability according to the Court of Milan on Yahoo!

It is interesting that such decision was issued just a few days after the decision on the merits of the Court of Milan involving Yahoo! that I had previously covered in this article with reference to the interim proceeding where the Court took a different position on the Internet liability regime for hosting providers.  In such case Yahoo! had been requested to take down the links on its search engine to the websites allowing the streaming, downloading or the P2P of the movie “About Elly” in breach of the copyright exploitation rights held by PFA Films on the same.  The Court held that Yahoo! is not obliged to deactivate or implement filters and that the removal of the access to the challenged contents could occur only following an order from public authorities as prescribed by Italian law implementing the E-Commerce Directive.

The Internet liability regime for hosting providers is a fascinating topic and as usual feel free to contact me, Giulio Coraggio to discuss.  Also, if you want to receive my newsletter, please join my LinkedIn Group or my Facebook page. And follow me on TwitterGoogle+ and become one of my friends on LinkedIn.

Image courtesy of Flickr by Esther Vargas

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Giulio Coraggio

I am the location head of the Italian Intellectual Property & Technology department and the global co-head of the IoT and Gaming and Gambling groups at the world-leading law firm DLA Piper. IoT and artificial intelligence influencer and FinTech and blockchain expert, finding solutions to what's next for our client's success.

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