Online social network could not be obliged to install filtering system
This reference for a preliminary ruling concerned the interpretation of inter alia the Directive on electronic commerce (Directive 2000/31), the Copyright Directive (Directive 2001/29), IPRED (Directive 2004/48on the enforcement of intellectual property rights’), the Data Protection Directive (Directive 95/46”) and the Directive on privacy and electronic communications (Directive 2002).
The reference had been made in proceedings SABAM, a management company which represented authors, composers and publishers of musical works, and Netlog, the owner of an online social networking platform, concerning Netlog’s obligation to introduce a system for filtering information stored on its platform in order to prevent files being made available which infringed copyright.
Netlog ran an online social networking platform where every person who registers acquired a personal space known as a “profile” which the user could complete himself and which became available globally. The most important function of that platform, which was used by tens of millions of individuals on a daily basis, was to build virtual communities through which those individuals could communicate with each other and thereby develop friendships. On their profile, users could, inter alia, keep a diary, indicate their hobbies and interests, showed who their friends were, display personal photos or publish video clips.
However, SABAM claimed that Netlog’s social network also offered all users the opportunity to make use , by means of their profile, of the musical and audio-visual works in SABAM’s repertoire, making those works available to the public in such a way that other users of that network could had access to them without SABAM’s consent and without Netlog paying it any fee.
During February 2009, SABAM approached Netlog with a view to concluding an agreement regarding the payment of a fee by Netlog for the use of the SABAM repertoire.
By letter of 2 June 2009, SABAM gave notice to Netlog that it should gave an undertaking to cease and desist from making available to the public musical and audio-visual works from SABAM’s repertoire without the necessary authorisation.
By its question, the referring court asked, in essence, whether Directives 2000/31, 2001/29, 2004/48, 95/46 and 2002/58, read together and construed in the light of the requirements stemming from the protection of the applicable fundamental rights, were to be interpreted as precluding a national court from issuing an injunction against a hosting service provider which required it to install a system for filtering:
– information which was stored on its servers by its service users;
– which applied indiscriminately to all of those users;
– as a preventative measure;
– exclusively at its expense; and
– for an unlimited period,
which was capable of identifying electronic files containing musical, cinematographic or audio-visual work in respect of which the applicant for the injunction claims to hold intellectual property rights, with a view to preventing those works from being made available to the public in breach of copyright.
The Court held that the injunction imposed on the hosting service provider requiring it to install the contested filtering system would oblige it 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, something which was prohibited by Art. 15(1) of Directive 2000/31 (see, by analogy, see Case C-70/10 Scarlet Extended (2011)).
The Court pointed out that in order to assess whether that injunction was consistent with EU law, account must also be taken of the requirements that stem from the protection of the applicable fundamental rights.
The Court found that the protection of the right to intellectual property was indeed enshrined in Art. 17(2) of the Charter of Fundamental Rights of the European Union. There was, however, nothing whatsoever in the wording of that provision or in the Court’s case-law to suggest that that right was inviolable and must for that reason be absolutely protected.
The Court held that in circumstances such as those in the main proceedings, national authorities and courts must, in particular, strike a fair balance between the protection of the intellectual property right enjoyed by copyright holders and that of the freedom to conduct a business enjoyed by operators such as hosting service providers pursuant to Art. 16 of the Charter.
The injunction requiring the installation of the contested filtering system involved monitoring all or most of the information stored by the hosting service provider concerned, in the interests of those rightholders. Moreover, that monitoring had no limitation in time, was directed at all future infringements and was intended to protect not only existing works, but also works that had not yet been created at the time when the system was introduced.
The Court held that such an injunction would result in a serious infringement of the freedom of the hosting service provider to conduct its business since it would require that hosting service provider to install a complicated, costly, permanent computer system at its own expense, which would also be contrary to the conditions laid down in Art. 3(1) of Directive 2004/48, which required that measures to ensure the respect of intellectual-property rights should not be unnecessarily complicated or costly.
The Court found that in those circumstances, an injunction to install the contested filtering system was to be regarded as not respecting the requirement that a fair balance be struck between, on the one hand, the protection of the intellectual-property right enjoyed by copyright holders, and, on the other hand, that of the freedom to conduct business enjoyed by operators such as hosting service providers.
Moreover, the effects of that injunction would not be limited to the hosting service provider, as the contested filtering system might also infringed the fundamental rights of that hosting service provider’s service users, namely their right to protection of their personal data and their freedom to receive or impart information, which were rights safeguarded by Arts 8 and 11 of the Charter respectively.
Consequently, according to the Court, in adopting the injunction requiring the hosting service provider to install the contested filtering system, the national court concerned would not be respecteding the requirement that a fair balance be struck between the right to intellectual property, on the one hand, and the freedom to conduct business, the right to protection of personal data and the freedom to receive or impart information, on the other.
The Court concluded that Directives 2000/31, 2001/29 and 2004/48, read together and construed in the light of the requirements stemming from the protection of the applicable fundamental rights, must be interpreted as precluding an injunction made against a hosting service provider which required it to install the contested filtering system.