ECJ: No general monitoring responsibility for social networks

Online social networks cannot be forced to install a general filtering system to preventively monitor whether its users exchange unauthorised copies of copyright protected work. This would be a disproportionate measure that limits freedom of enterprise of the platform and infringes the privacy of its users, according to Europe's highest court on Thursday.

With this preliminary ruling, the Luxembourg-based Court of Justice of the European Union (ECJ) issued a very important clarification of EU law on the responsibility of hosting providers. The national case involves two Belgian parties: music royalty collecting society SABAM and online social network Netlog.

SABAM asked a Belgian court in 2009 to order Netlog to stop its users illegal downloading activities by monitoring their traffic and blocking users that were crossing the line. The Belgian judges sought advice from the Luxembourg court on the following question: 

Does European law allow a national court to order a hosting service provider to introduce, for all its customers, in abstracto and as a preventive measure, at its own cost and for an unlimited period, a system for filtering most of the information which is stored on its servers in order to identify on its servers electronic files containing musical, cinematographic or audio-visual work in respect of which SABAM claims to hold rights, and subsequently to block the exchange of such files?

In short, the ECJ answered this question with a clear “No” and deemed such court orders disproportionate. The ECJ issues a few important statements in this case: 

• An online social network cannot be obliged to install a general filtering system, covering all its users, in order to prevent the unlawful use of musical and audio-visual work. Such an injunction would result in a serious infringement of [the social network’s] freedom to conduct its business since it would require [them] to install a complicated, costly, permanent computer system at its own expense. 
• Forcing companies to install a filter to identify, analyze and process users' (personal) information might infringe their users privacy and could result in the blocking of lawful content.

The responsibility of internet-based services to act against online piracy and illegal user generated content is subject of intense debate. In a separate case last year, the ECJ dismissed a bid by SABAM to get Scarlet, an access provider, to monitor and stop its users from illegal downloads of songs.  The ECJ has now consistently held that a general monitoring obligation is incompatible with the e-commerce directive and that the interests at stake – namely intellectual property rights and freedom of enterprise, freedom of information and personal data protection should be balanced.

Source: European Court of Justice in Case C-360/10, Belgische Vereniging van Auteurs, Componisten en Uitgevers (SABAM) v Netlog NV. 16 February 2012.  Reference: Reuters