UNIVERSITY OF AMSTERDAM EU Law Track
Jussi-Pekka Palko
Hyperlinking and Providing Public Wi-Fi Networks:
Balancing Fundamental Rights with Intellectual Property Protection
Master’s thesis
Supervisor Dr. Thomas Vandamme
Amsterdam 17.07.2017
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ABSTRACT
There are two fundamentally important aspects of the information society that have been subjected to recent developments in the EU legal order through judgments of the Court of Justice: hosting online hyperlinks and providing a public Wi-Fi network with free access. Firstly, hyperlinking, meaning placing a direct reference and thus an access point in the Internet to certain data or another website, has raised issues especially in regards of the right to property, since hyperlinking to copyrighted content could be subject to limitations on account of intellectual property protection, as seen in the recent GS Media case in the Court of Justice. This can affect for example the freedom of expression. Secondly, the repercussions arising from providing a public Wi-Fi access can be illustrated through Mc Fadden, where a business owner offered a Wi-Fi network without password protection to his customers. The Court assessed potential limitations to providing these networks in order to protect intellectual property, which can however also affect fundamental rights like the freedom to conduct a business.
The purpose of this thesis is to evaluate hyperlinking and Wi-Fi providing in the context of the case law of Court of Justice, and to review its impact on the relationship between the right to property on the one hand and the freedom of expression and the freedom to conduct a business on the other hand. Many of the cases ultimately come down to the test of proportionality in the form of striking a fair balance between conflicting fundamental rights by the Court of Justice or by national courts. In both GS Media and Mc Fadden that are the leading cases in hyperlinking and the liability of free Wi-Fi provision, respectively, the Court allowed the limitation of other fundamental rights at the expense of protecting copyrights. The effects of these cases can be felt in several areas, namely the freedom of the Internet, the freedom to conduct a business and the freedom to expression and to receive information, in addition to for example the resulting increase in the role of Internet intermediaries in copyright enforcement. However, the benefits for copyright holders do not appear to be massive, and certainly not enough to justify the limitations to other rights in the trade-off. This thesis will begin with an overview of the protection of fundamental rights and their operation in the EU legal order, followed by an analysis of the recent case law of the Court of Justice on hyperlinking and providing a public Wi-Fi and its implications. The culmination of this work will be the assessment of the idea of fair balancing of fundamental rights applied by the Court of Justice in the relevant case law.
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TABLE OF CONTENTS
I. Introduction ... 4
II. The Protection of Fundamental Rights ... 5
2.1. The Protection of Fundamental Rights in the European Union ... 5
2.2. The Right to Freedom of Expression ... 6
2.2.1. The Freedom of Expression in International Law ... 7
2.2.2. The Freedom of Expression in the EU ... 7
2.3. The Protection of Intellectual Property Rights ... 9
2.3.1. Intellectual Property Rights in the EU ... 10
2.4. The Freedom to Conduct a Business ... 10
2.5. The Interplay between Fundamental Rights in the Case Law of the Court of Justice ... 12
III. The Recent Developments in the Case Law of the Court of Justice ... 14
3.1. The Legislative Framework ... 15
3.2. Hosting Hyperlinks and a Communication to the Public ... 16
3.2.1. The Two Main Criteria ... 17
3.2.2. New Public ... 18
3.2.3. For-Profit and Not-For-Profit Communication ... 19
3.3. Liability for Providing Public Wi-Fi Services ... 21
3.3.1. Intermediaries and Information Society Services ... 22
3.3.2. Mere Conduit... 24
IV. Balancing the Fundamental Rights ... 26
4.1. Fair Balance ... 26
4.2. GS Media and Fundamental Rights ... 28
4.3. Mc Fadden and Fundamental Rights ... 30
V. Conclusions ... 32
Bibliography ... 33
Cases ... 36
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I. INTRODUCTION
There are two fundamentally important aspects of the information society that have been subjected to recent developments in the EU legal order through judgments of the Court of Justice: hosting online hyperlinks and providing a public Wi-Fi network with free access. Firstly, hyperlinking, meaning placing a direct reference and thus an access point in the Internet to certain data or another website, has raised issues especially in regards of the right to property, since hyperlinking to copyrighted content could be subject to limitations on account of intellectual property protection, as seen in the recent GS Media case in the Court of Justice. This can affect for example the freedom of expression. Secondly, the repercussions arising from providing public Wi-Fi access can be illustrated through Mc Fadden, where a business owner offered a Wi-Fi network without password protection to his customers. The Court assessed potential limitations to providing these networks in order to protect intellectual property, which can however also affect fundamental rights like the freedom to conduct a business.
These phenomena represent potential clashes between intellectual property protection and other fundamental rights. The interplay of different rights has become increasingly relevant in recent years, in particular considering the role that copyright and related rights play in the digital age, namely in the Internet environment. On the one hand, intellectual property right owners need legal protection for their works, and on the other, the fundamental rights of other individuals must also be preserved. Moreover, digital technology develops extremely fast and it is cumbersome for legislation to keep up with it, which presents new kinds of legal questions for courts and legislators. This is also why the Court of Justice of the EU has a prominent role in interpreting existing legislation, especially the concept of a communication to the public and intermediary liability when it comes to the subject matter of this thesis.
The purpose of this thesis is to evaluate hyperlinking and Wi-Fi providing in the context of the case law of Court of Justice, and to review its impact on the relationship between the right to property on the one hand and the freedom of expression and the freedom to conduct a business on the other hand. Furthermore, the impacts on the freedom of information is also discussed. To address these issues, the concept of fair balance between conflicting fundamental rights is a relevant and often the determining aspect when the CJEU rules on issues related to the subject matter of this thesis. Thus, this means that balancing is assessed in
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detail in the fourth chapter. The major issue in that regard is the effect of balancing in the relevant cases.
This thesis will begin with an overview of the protection of fundamental rights and their operation in the EU legal order, followed by an analysis of the recent case law of the Court of Justice on hyperlinking and providing a public Wi-Fi and its implications. The culmination of this work will be the assessment of the idea of fair balancing of fundamental rights applied by the Court of Justice in the relevant case law.
II. THE PROTECTION OF FUNDAMENTAL RIGHTS
There are several sources for fundamental rights in Europe, namely the national constitutions, international treaties and the EU Charter of Fundamental Rights. When fundamental rights are in question before the Court of Justice, the issue often turns to balancing two separate rights with each other1 – in the case of this thesis the right to property with the freedom of expression and the freedom to conduct a business. In this chapter, the aforementioned rights, including their interplay in the EU legal sphere, will be gone through.
2.1. The Protection of Fundamental Rights in the European Union
The protection of fundamental rights was recognised as a value in the EU legal system already in the 1960s by the Court of Justice in its case law, but only after the Lisbon Treaty the fundamental rights were properly included in the EU legislation.2 At the moment, there are two particularly relevant fundamental right instruments that have an impact in the EU sphere: the EU Charter of Fundamental Rights and the Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR). The Charter is a primary source of EU law, and it is a legally binding instrument to the EU institutions and the Member States when acting within the scope of EU law,3 and the ECHR is an international law document ratified by all
the EU Member States. Thus, there is certain complementarity in fundamental rights protection in the EU Member States due to the two instruments.
1 A. Rosas. Balancing Fundamental Rights in EU Law – Cambridge Yearbook of European Legal Studies 16
(2014), p. 347.
2 S. de Vries. EU and ECHR: Conflict or Harmony? – Utrecht Law Review 9(1) (2013), p. 78.
3 G. de Burca. After the EU Charter of Fundamental Rights: The Court of Justice as a Human Rights
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Furthermore, there are two courts, the Court of Justice of the EU (CJEU) and the European Court of Human Rights (ECtHR) that are able to decide fundamental rights issues.4 There has been a lot of debate related to the two separate legal orders in Europe, in particular on the conflicting approaches to fundamental rights issues by the CJEU and the ECtHR5 and on the
EU accession to the ECHR, which is also provided in Article 6(2) of Treaty on European Union. In matters concerning digital environment, the relevance of the ECtHR can be seen for example in its Delfi decision that concerned freedom of expression in relation to the Internet.6
In the context of issues related to this thesis, mainly the Court of Justice has been developing the relevant case law, since the cases are specifically related to EU law issues arising from the secondary legislation of the EU. However, this does not preclude the ECtHR’s cases from having an impact on fundamental rights adjudication in the CJEU, especially considering Article 53 of the Charter stating that the Charter shall not be interpreted as restricting or adversely affecting rights and freedoms recognised in other sources of fundamental rights, including the ECHR.7
2.2. The Right to Freedom of Expression
The right to freedom of expression is a right that is widely recognised in the world and it arises from numerous sources, especially from international law and national constitutions. In addition, the European Union has included it in the Charter of Fundamental Rights8 and some other pieces of legislation.9 In various legal documents the right generally includes the freedom to hold opinions and to receive and impart information without interference,10 but naturally the problems do not arise until the principle must be interpreted in the context of a legal issue.
4 See e.g. S. Morano-Foadi, L. Vickers. Fundamental Rights in the EU: A Matter for Two Courts. First Edition.
Bloomsbury Publishing 2015.
5 S. Douglas-Scott. The EU Charter of Fundamental Rights as a Binding Instrument: Five Years Old and
Growing (edited by S. de Vries. U. Bernitz. S. Weatherill). First Edition. Bloomsbury Publishing 2015, p. 52.
6 Delfi AS v. Estonia [GC], no. 64669/09 ECtHR (2015).
7 Art. 53 of the Charter of Fundamental Rights of the European Union, Official Journal of the European Union,
C326, 26.10.2012, pp. 391–407.
8 Art. 11 of the Charter of Fundamental Rights.
9 See e.g. Directive 2010/13/EU of the European Parliament and of the Council of 10 March 2010 on the
coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services. Official Journal of the European Union L95, 15.4.2010, pp. 1–24 ; See further, L. Woods. Article 11 - Freedom of Expression and Information – The EU Charter of Fundamental Rights: A Commentary (edited by S. Peers. T. Hervey. J. Kenner. A. Ward). First Edition. Bloomsbury Publishing 2014, pp. 318-319.
10 See e.g. art. 11 of the Charter of Fundamental Rights or art. 10 of the Convention for the Protection of Human
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2.2.1. The Freedom of Expression in International Law
The right to freedom of expression is not a novelty, it having its roots in the 18th century in the United States Constitution and the French Declaration of the Rights of Man and the Citizen.11 When it comes to international law, already the Universal Declaration of Human
Rights (UDHR), adopted in 1948, included this idea, stating in Article 19 that “Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers”.12 The UDHR established a firm basis for the principle in
international law context, declaring it truly universal “regardless of frontiers”, even though the UDHR served primarily as a declaration and not as a legally binding document at the time of adoption. It was only after this declaration that international treaties started to emerge. Subsequently, the right to freedom of expression was incorporated in Article 10 of the Convention for the Protection of Human Rights and Fundamental Freedoms that was adopted in 1950 by the Council of Europe. In Europe this document is especially relevant today, both because of the numerous member states of the Council of Europe and the establishment of the ECtHR13 whose decisions play a major part in the development of human rights in Europe. The Article on the freedom of expression in ECHR is quite similar to the one in the UDHR, but it also sets out that there are limitations to this right, especially in regards of property rights, stating that “This Article shall not prevent States from requiring the licensing of broadcasting, television or cinema enterprises”.14 As for other international treaties, the United Nations General Assembly adopted the International Covenant on Civil and Political Rights in 1966, and it includes a provision on the freedom of expression15 that does not
substantially differ from the ones in the UDHR and the ECHR.
2.2.2. The Freedom of Expression in the EU
Also importantly for this thesis, the right to freedom of expression is protected in the EU dimension through the Charter of Fundamental Rights. Article 11 of the Charter states that
11 M. Verpeaux. Freedom of Expression: In Constitutional and International Case Law. First Edition. Council of
Europe Publishing 2010, p. 12.
12 Art. 19 of the Universal Declaration of Human Rights (UDHR), adopted by the United Nations, 1948.
13 Art. 19 of the ECHR. 14 Art. 10(1) of the ECHR.
15 Art. 19(2) of the International Covenant on Civil and Political Rights, adopted by the General Assembly of the
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“Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers”.16 Also, unlike other documents that were mentioned, the Charter adds that “The freedom and pluralism of the media shall be respected”.17 The
Charter does not actually further define what the full scope of this freedom is, so in that respect the case law of the Court of Justice is at the forefront of setting out its limits. After the EU Charter became legally binding with the Treaty of Lisbon in 2009, the CJEU has increasingly started to cite it and use it in its argumentation.18 Thus, the role of the Court as a prominent fundamental rights actor cannot be easily understated.
Like almost any right, the right to freedom of expression is not absolute, naturally in accordance with Article 52(1) of the EU Charter, so in certain instances its application is and must be limited. Practically this often means that a person cannot always say or write as they please. For example, some EU law instruments themselves limit the freedom of expression,19 but in the end it is often for the Court of Justice to decide if it should be limited in individual cases like under discussion in this thesis. It is important to note that Article 11 of the EU Charter does not only protect the act of expression but also the right to receive information that can play a part in cases, as discussed later. Moreover, for example Nash argues that there seem to be at least four separate forms of freedom of expression in the digital context, including expressing views and arguably the right to communicate.20
In connection to the freedom of expression, the idea of the freedom of the Internet should be mentioned, since the Internet is a central tool in exercising the freedom of expression in the modern society.21 In the context of this thesis, the freedom of the Internet concerns the extent
to which individuals’ actions in the Internet are limited. Even though it is not explicitly protected in the main fundamental rights sources, the freedom of the Internet might come into play in IP-related cases, as seen in the subsequent chapters.
16 Art. 11(1) of the Charter of Fundamental Rights. 17 Art. 11(2) of the Charter of Fundamental Rights. 18 G. de Burca (supra note 3), p. 169.
19 See supra note 9.
20 V. Nash. Analyzing Freedom of Expression Online: Theoretical, Empirical, and Normative Contributions –
The Oxford Handbook of Internet Studies (edited by W. Dutton). First Edition. Oxford University Press 2013, p. 445.
21 See further e.g. A. Savin, J. Trzaskowski. Research Handbook on EU Internet Law. First Edition. Edward
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2.3. The Protection of Intellectual Property Rights
This section will briefly go through the most relevant aspects of intellectual property rights related to the main issues under discussion in this thesis, namely the protection of copyright and related rights since they are the most likely form of IPRs to arise in this context. As with other rights, the EU Charter plays a central role in the protection of IPRs as a fundamental right to property, whereas specific IP rights are protected in numerous instruments of international law, EU law and national legislation.
Intellectual property as a form of property rights consists of immaterial, intangible goods.22
The property aspect manifests itself in the right of an IPR holder to use and exclude others from using the goods.23 Both moral24 and economic rights are characteristic to IP rights. Intellectual property rights as a proprietary concept is not further analysed in this thesis, since it is a completely different discussion concerning the nature of intellectual creations and the extent to which they are analogous to tangible property,25 and as for the history of the right to property as a fundamental right, that subject is too extensive to be reviewed here. Nevertheless, generally the right to intellectual property is recognised as a fundamental right or as a derivative of the wider concept of proprietary rights.
The ECHR does not contain a provision that expressly recognises IP rights but according to the ECtHR they are protected under the provision for general property rights of Article 1 of Protocol No. 1.26 Most importantly for the case law of the Court of Justice, the EU Charter protects property rights and states that “Everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions”,27 and sets out some limitations to this. Secondly, Article 17 of the Charter expressly adds that intellectual property rights shall be protected.28
22 A. Kur, T. Dreier. European Intellectual Property Law: Text, Cases and Materials. First Edition. Edward Elgar
Publishing 2013, p. 2.
23 Ibid.
24 These protect the creator’s right to claim authorship of the work and also the integrity of the work.
25 See e.g. J. Drexl. European and International Intellectual Property Law between Propertization and
Regulation: How a Fundamental-Rights Approach Can Mitigate the Tension – The University of the Pacific Law Review 47(2) (2016), p. 206.
26 J. Drexl (supra note 25), p. 208.
27 Art. 17(1) of the Charter of Fundamental Rights. 28 Art. 17(2) of the Charter of Fundamental Rights.
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2.3.1. Intellectual Property Rights in the EU
In the context of international law, there are several treaties on intellectual property rights that set out a framework for harmonising IP protection. Relevant are for example the Agreement on Trade-Related Aspects of Intellectual Property Rights29 of the World Trade Organization
and the WIPO Copyright Treaty30 adopted by the World Intellectual Property Organization. In addition to the EU Member States being parties to these treaties, the EU itself has approved for example the WIPO Copyright Treaty by a Council Decision.31
On the EU level, there is some harmonisation of intellectual property law, regardless of the generally territorial nature of IP which grants rights on individuals in particular Member States32. The Treaty on the Functioning of the European Union33 leaves property ownership rules strongly to the Member States, which also reflects the fact that the national IP regimes in the Member States are quite diverse. However, some harmonisation of IP protection has taken place in the EU through directives and regulations.34 The objectives of the harmonisation have concerned internal market but also economic and political aspects.35 Basically, the directives harmonise the national laws in the Member States, and the regulations supplement the states’ systems with an additional way of getting protection for different works. In the end, the EU does not have a fully harmonised system for intellectual property rights, so the national systems still play a relevant role in the protection of individuals’ rights. However, the Court of Justice still has its role in interpreting EU legislation, which also affects IP enforcement in the Member States.
2.4. The Freedom to Conduct a Business
Another intriguing right that has to be taken into account in this thesis is the freedom to conduct a business that is enshrined in Article 16 of the Charter of Fundamental Rights which
29 The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), adopted in Marrakesh,
Annex 1C, Agreement Establishing the World Trade Organization, 1869 UNTS 299, 33 ILM 1197 (1994).
30 WIPO Copyright Treaty, adopted in 1996, TRT/WCT/001.
31 2000/278/EC: Council Decision of 16 March 2000 on the approval, on behalf of the European Community, of
the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, OJ L89, 11.4.2000, pp. 6–7.
32 T. Cook. Territoriality and Jurisdiction in EU IP Law – Journal of Intellectual Property Rights 19 (2014), p.
293.
33 Art. 345 of the Treaty on the Functioning of the European Union (TFEU), Official Journal of the European
Union C326, 26.10.2012, pp. 47–390.
34 E. Rosati. Towards an EU-wide copyright? (Judicial) pride and (legislative) prejudice – Intellectual Property
Quarterly 1 (2013), pp. 47-48.
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merely states that it recognises this freedom in accordance with EU law and national laws and practices.36 The Court of Justice has recognised this freedom as a fundamental right in its judgments since the 1970s as a form of exercising economic activity,37 but the EU Charter is the first legally binding document explicitly recognising this right in the EU.38 As a
fundamental right, the freedom to conduct a business is a novelty, considering that even the ECHR does not mention it.39
The freedom to conduct a business applies to both natural and legal persons in the EU, and it protects economic initiative and competing freely in the market,40 even though the concept is not unambiguous. As for the definition of the concept, the Court stated in UPC Telekabel that the freedom to conduct a business includes “--inter alia, the right for any business to be able to freely use, within the limits of its liability for its own acts, the economic, technical and financial resources available to it”.41 Even though it is relatively new, the freedom to conduct a business has potentially a wide reach in regards of conflicting fundamental rights. For example, recently the Court of Justice gave its ruling in Achbita where the freedom to conduct a business played a role in an employer being able to restrict using a headscarf in a workplace.42 The conflicting right was the freedom of religion that was limited as a result. The freedom to conduct a business can intersect with intellectual property protection for instance if a legal person exercises its economic rights by offering a free Wi-Fi network that is subsequently used to infringe upon an IPR holder’s rights. In the case of the legal person facing liability for the infringement, there could potentially be a clash between the freedom to conduct a business and IP protection. This kind of an issue was considered in the Mc Fadden case43 that will be discussed in the subsequent chapters.
36 Art. 16 of the Charter of Fundamental Rights.
37 M. Everson, R. Correia Gonçalves. Article 16 - Freedom to Conduct a Business – The EU Charter of
Fundamental Rights: A Commentary (edited by S. Peers. T. Hervey. J. Kenner. A. Ward). First Edition. Bloomsbury Publishing 2014, p. 440.
38 A. Usai. The Freedom to Conduct a Business in the EU, Its Limitations and Its Role in the European Legal
Order: A New Engine for Deeper and Stronger Economic, Social, and Political Integration – German Law Journal 14(9) (2013), p. 1868.
39 Ibid.
40 E. Gill-Pedro. Freedom to Conduct Business in EU Law: Freedom from Interference or Freedom from
Domination? – European Journal of Legal Studies 9(2) (2017), p. 104.
41 Case C-314/12 UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH and Wega
Filmproduktions-gesellschaft mbH. ECLI:EU:C:2014:192, para. 49.
42 Case C-157/15 Samira Achbita and Centrum voor gelijkheid van kansen en voor racismebestrijding v G4S
Secure Solutions NV. ECLI:EU:C:2017:203, para. 38.
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2.5. The Interplay between Fundamental Rights in the Case Law of the Court of Justice
It is not uncommon that the Court of Justice has to balance two or more fundamental rights in a case under its review, since naturally even fundamental rights are not absolute.44 Hence, the
Court is an important actor in the development of fundamental right jurisprudence, and that includes balancing several rights with IP rights, namely copyright in the digital context. This is particularly relevant, since it means that the interpretation of IP law can be guided by other fundamental rights.45 For example, in relation to the right to receive information under Article
11 of the EU Charter and the protection of intellectual property, in UPC Telekabel which was about blocking an Internet site to protect copyrights, the Court stroke a balance between copyright and the freedom of information of Internet users.46 In the recent years, the jurisprudence of the CJEU related to balancing copyright with the freedom of expression has mostly revolved around the liability of intermediaries that are usually Internet service providers,47 like in the aforementioned judgment. However, as will be seen in the next chapter, the Court has recently assessed the freedom of expression in cases related to natural or legal persons who provide hyperlinks to copyright-infringing material.
Also the freedom to conduct a business has played a part in the Court’s case law in the context of balancing fundamental rights. Quite recently in Scarlet Extended, which revolved around the plaintiff seeking an injunction for an Internet service provider to install a system identifying file-sharing software users,48 the Court ruled that the system would seriously limit the service provider’s freedom to conduct a business due to the system being cumbersome and costly to operate.49 Thus, the injunction in question would have not struck a fair balance between the protection of IPRs of copyright holders and the freedom to conduct a business of the Internet service providers.50 This case illustrates how the Court has to assess both values
and practically decide which one should be protected more at the expense of the other.
44 A. Rosas (supra note 1), p. 347. 45 J. Drexl (supra note 25), p. 217.
46 Case C-314/12 UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH and Wega
Filmproduktions-gesellschaft mbH, para. 47.
47 See e.g. E. Izyumenko. The Freedom of Expression Contours of Copyright in the Digital Era: A European
Perspective – The Journal of World Intellectual Property 19(3-4) (2016), p. 120.
48 J. Drexl (supra note 25), p. 215.
49 Case C-70/10 Scarlet Extended SA v Société belge des auteurs, compositeurs et éditeurs SCRL (SABAM).
ECLI:EU:C:2011:771, paras. 47-48.
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Then the question arises on how the Court of Justice should approach the balancing of these conflicting fundamental rights and achieve a fair balance, which appears to be quite an ambiguous concept with a strong connection to the principle of proportionality. Ultimately in the Court’s case law the question of fairness comes down to proportionality in EU law,51 so
often these two concepts can be used as synonyms. Proportionality is also enshrined in Article 52(1) of the EU Charter: “Subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others”.52 Thus, the Charter allows fundamental rights to be limited if proportionality is respected. Proportionality manifests in various forms in the EU legal sphere. For example, a test used in cases related to the internal market involves the assessment of necessity and suitability of a national measure,53 whereas proportionality stricto sensu practically entails an assessment if a measure is manifestly disproportionate, considering the balance between costs and benefits.54 However, in some cases that have strong fundamental right elements, the proportionality test is confined to a balancing exercise. For instance in UPC Telekabel55 the Court can be seen to focus on the “fair balance” of the fundamental rights and equating it with the proportionality principle.56
The Court reviews the particular circumstances of the case, which means that there is no single yardstick to determine what the fair balance is and also no hierarchy57 for the fundamental rights telling which right would override another. As an example of this, in Schmidberger the Court stated that “--the interests involved must be weighed having regard to all the circumstances of the case in order to determine whether a fair balance was struck between those interests”.58 Therefore, the predictability of the Court’s assessment of fair
balance is not exactly clear, since there is a certain amount of flexibility in the interplay of fundamental rights. In accordance to this, when it considered the legality of an EU measure,
51 C. Angelopoulos. Sketching the outline of a ghost: the fair balance between copyright and fundamental rights
in intermediary third party liability – The journal of policy, regulation and strategy for telecommunications, information and media 17(6) (2015), p. 77.
52 Art. 52(1) of the Charter of Fundamental Rights.
53 A. Portuese. Principle of Proportionality as Principle of Economic Efficiency – European Law Journal 19(5)
(2013), p. 619.
54 W. Sauter. Proportionality in EU Law: A Balancing Act? – Cambridge Yearbook of European Legal Studies
15 (2013), p. 447.
55 Case C-314/12 UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH and Wega
Filmproduktions-gesellschaft mbH, para. 46
56 C. Angelopoulos (supra note 51), p. 79 57 Ibid.
58 Case C-112/00 Eugen Schmidberger, Internationale Transporte und Planzüge v Republik Österreich.
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the Court stated in Sky Österreich that “Where several rights and fundamental freedoms protected by the European Union legal order are at issue, the assessment of the possible disproportionate nature of a provision of European Union law must be carried out with a view to reconciling the requirements of the protection of those different rights and freedoms and a fair balance between them”.59 In other words, it appears that in those circumstances both rights under review should be taken into account and preserved, as far as they can be.
In the context of this thesis, the relevant proportionality test used by the Court is not tied to any known formula and it is addressed as the fair balancing exercise. What exactly does fairness mean? The Court has not given an answer to this, and no consistent idea of the concept can be extracted from the cases. However, what fairness could entail, in my view, is that when conflicting fundamental rights are assessed, most importantly the benefits of the potential rulings are set in contrast with the disadvantages. Then for example if the result does not create apparent disadvantages but has some benefits, then ‘fairness’ could be achieved. However, a case by case analysis should always be made, as the Court does. Moreover, it could be argued that there needs to be proper justifications for deciding one way or the other when it comes to limiting different fundamental rights. If there are no justified reasons for limiting certain rights at the expense of others, there cannot be ‘fairness’ in my opinion. Still, this balancing act is not effectively bound to anything, which leaves a considerable amount of discretion to the Court of Justice. Harbo actually suggests that there is no consistent definition for what the principle of proportionality means,60 which seems to also apply to the concept of fairness. This reflects the question of coherence – what is to stop the Court from swinging from one stance to another in different cases? Furthermore, does balancing actually add something worthwhile to the assessment of fundamental rights cases?
III. THE RECENT DEVELOPMENTS IN THE CASE LAW OF THE COURT OF JUSTICE
The main focus of this chapter is the current approach of the Court of Justice towards the issues of online hyperlinking and providing public Wi-Fi networks. After going through the legislative framework, the convoluted concept of “a communication to the public” that plays a
59 Case C-283/11 Sky Österreich GmbH v Österreichischer Rundfunk. ECLI:EU:C:2013:28, para. 60.
60 T-I. Harbo. The Function of the Proportionality Principle in EU Law – European Law Journal 16(2) (2010), p.
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central role in the issues of hosting hyperlinks is the first examined subject matter. Secondly, intermediary liability relating to offering Wi-Fi services to the public is discussed.
3.1. The Legislative Framework
In accordance with the case law of the Court of Justice, the relevant issues in this thesis arise from two separate legislative instruments of the EU: the Directive on the harmonisation of certain aspects of copyright and related rights in the information society (InfoSoc Directive)61
and the Directive on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (E-Commerce Directive).62 Since these
instruments are directives, they have naturally required national implementation in the Member States. However, that does not preclude legal issues arising from the directives from being presented to the Court of Justice through preliminary references from national courts, which has led to the development of an EU approach to both hyperlinking and Wi-Fi providing. Furthermore, even if the directives grant discretion to the Member States in their implementation, the Member States still have to respect the rights and principles in accordance with Article 51(1) of the Charter of Fundamental Rights.
In connection to hyperlinking, the InfoSoc Directive is the main directive in the area of copyright legislation in the EU. Firstly, the objective of the directive was to implement the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty.63 Secondly, the directive was adopted in order to harmonise substantive copyright law in the Member States.64 This was justified in the recitals of the directive by the need to secure high protection for intellectual property rights that are recognised as an integral part of property,65 reflecting the increasing status of IP in the digital context. The exclusive rights under harmonisation in this directive are reproduction, communication and distribution of protected works.66
61 Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of
certain aspects of copyright and related rights in the information society, Official Journal of the European Union L167, 22.6.2001, pp. 10–19.
62 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. OJ L178, 17.7.2000, pp. 1–16.
63 Recital 15 of the Directive 2001/29/EC.
64 R. Arnold, E. Rosati. Are National Courts the Addressees of the InfoSoc Three-step Test? – Journal of
Intellectual Property Law & Practice 10(10) (2015), p. 741.
65 Recital 9 of the Directive 2001/29/EC.
66 E. Rosati. Copyright in the EU: in Search of (In)flexibilities – Journal of Intellectual Property Law & Practice
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The relevant directive in relation to providing Wi-Fi networks is the E-Commerce Directive that establishes a framework for “ensuring the free movement of information society services between the Member States”67 in order to improve, among other things, the functioning of the internal market and legal certainty.68 The directive harmonises various fields related to the
information society, such as certain information requirements for service providers and the “mere conduit” and “caching” concepts that are related to the liability of intermediary service providers,69 which has laid down the basis for the CJEU in its rulings that are subsequently
discussed.
3.2. Hosting Hyperlinks and a Communication to the Public
In the digital arena, IP infringements often present problems in two respects – the potential liability of the person who has uploaded the original work on an Internet server, and secondly the liability of the person who actually puts forward a hyperlink leading to the work on an Internet site.70 Whenever a person hosts or posts a hyperlink on a website, they potentially subject themselves to a review under the concept of a communication to the public. In order to analyse hyperlinking and related issues it is important to be able to establish if posting a hyperlink on a website can constitute a communication to the public in the EU law sense. First of all, the concept of communication to the public has been inspired by international law, namely the WIPO Copyright Treaty. Article 8 of the Treaty sets out that authors of works “--enjoy the exclusive right of authorizing any communication to the public of their works, by wire or wireless means--”.71 In the EU legal system, the legislated concept is quite similar but in the EU context the Court of Justice has scrutinised it and thus developed it to a great degree. Communication to the public is regulated in Article 3 of the InfoSoc Directive,72 leading to the harmonisation of national intellectual property legislation in the EU Member States. It lays down the obligation to the Member States to make sure that authors of protected works have the “exclusive right to authorise or prohibit any communication to the public of their works”.73 This piece of legislation has produced a lot of EU case law in its wake, and the
concept of communication to the public has evolved accordingly, as the Court of Justice has
67 Art. 1 of the Directive 2000/31/EC.
68 Recitals 5 and 7 of the Directive 2000/31/EC. 69 Arts. 5, 12 and 13 of the Directive 2000/31/EC.
70 J. Hörnle. Is linking communicating? – Computer Law & Security Review 30 (2014), p. 439. 71 Art. 8 of the WIPO Copyright Treaty.
72 Art. 3 of the Directive 2001/29/EC. 73 Art. 3 of the Directive 2001/29/EC.
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decided those copyright cases, namely on the issue if certain acts are deemed to fall under the sphere of Article 3(1) of the InfoSoc Directive. Overall, the Court of Justice has adopted a broad interpretation of the concept, since the EU legislative instruments refer to “any communication”.74 A lot of the earlier case law quite differed from the current issues, since it
mainly revolved around communicating various types of media through different outlets than the Internet, such as satellite broadcasting and having a television screen in a public place.75
As technology and forms of intellectual property infringements have advanced, Internet-related cases have taken an increasingly topical status in the legal context. Due to that fact, the main focus on this thesis is transmissions via the Internet.
3.2.1. The Two Main Criteria
When it comes to communication to public, this concept has two cumulative criteria defined by the Court of Justice in ITV Broadcasting Ltd. There has to be a “communication” of a work76 and the communication of that work to a “public”.77 Naturally, these concepts have to be assessed individually in the given legal context but for the interpretation of a “communication” the Court has adopted a broad view, stating that it means “--any transmission of the protected works, irrespective of the technical means or process used”.78 This way the IP right owners are ensured wide protection for their works. For example, in Svensson where the Court assessed clickable online hyperlinks to unauthorised content, it concluded that the links in question “--must be considered to be ‘making available’ and, therefore, an ‘act of communication’--".79 In its case law, the Court has stated that making a work available to public so that the public can access it constitutes an “act of communication”.80 So evidently it does not take too much for an act to fulfil the first criterion,
as long as the material can be accessed.
As for the second criterion, the Court considers ‘public’ to imply that there is an indeterminable but “a fairly large number”81 of potential recipients. In Svensson, the online
74 P. Torremans. Holyoak and Torremans Intellectual Property Law. Oxford University Press 2016, p. 271. 75 A. Kur, T. Dreier (supra note 22), p. 298.
76 Case C‑607/11 ITV Broadcasting Ltd and Others v TV Catch Up Ltd. ECLI:EU:C:2013:147, para. 21.
77 Ibid., para. 31.
78 Joined Cases C‑403/08 Football Association Premier League Ltd and Others v QC Leisure and Others and
C‑429/08 Karen Murphy v Media Protection Services Ltd. ECLI:EU:C:2011:631, para. 193.
79 Case C‑466/12 Nils Svensson and Others v Retriever Sverige AB. ECLI:EU:C:2014:76, para. 20.
80 Case C‑306/05 SGAE v Rafael Hoteles. ECLI:EU:C:2006:764, para. 43.
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links were deemed to be aimed at the public, and this issue was clear cut – the website manager directed the links to all the users of the website, which constitutes “an indeterminate and fairly large number of recipients”.82 From a critical point of view, when hyperlinks are concerned, it would seem extremely unlikely that in similar types of cases such as Svensson this criterion was left unfulfilled.
3.2.2. New Public
However, in some instances the test applied by the Court becomes more intricate with the requirement of ‘new public’, at which a protected work was potentially aimed. In Airfield, it was defined as “--a public which was not taken into account by the authors of the protected works within the framework of an authorisation given to another person”.83 The effects of the concept are most clearly seen in Svensson where the hyperlinks in question led to an Internet press article originally released by Göteborgs-Posten, and the article was freely accessible to all Internet users.84 The Court decided that there is no communication to a new public through the clickable links, since the initial communication by Göteborgs-Posten was targeted to all potential visitors to the website and thus all Internet users could already access it.85 Hence, the communication did not occur to a new public, since Göteborgs-Posten should be deemed to have taken that public into account. However, the situation would have been completely different if for example the link in question somehow circumvented restrictions protecting the work, in which case the users of the link would be considered as a new public.86 Still, according to the Court, if a protected work is uploaded without any restrictions online for everyone, there should not be liability for an individual who provides a link to that content. Through this case it can be seen that the availability of the content that is linked to plays a central role, since it can ultimately determine if a communication falls under the concept in Article 3(1) of the InfoSoc Directive. In fact, in some recent hyperlink cases the new public concept has been the decisive factor.87
82 Case C‑466/12 Nils Svensson and Others v Retriever Sverige, para. 22.
83 Joined Cases C-431/09 Airfield NV and Canal Digitaal BV v Belgische Vereniging van Auteurs, Componisten
en Uitgevers CVBA (Sabam) and C-432/09 Airfield NV v Agicoa Belgium BVBA. ECLI:EU:C:2011:648, para.
72.
84 Case C‑466/12 Nils Svensson and Others v Retriever Sverige, para. 8. 85 Ibid., paras. 25-27.
86 Ibid., para. 31.
87 See Case C‑466/12 Nils Svensson and Others v Retriever Sverige and Case C-348/13 BestWater International
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In the end, the Svensson judgment emphasises the responsibility of the original publisher of the work. The approach of the Court bears resemblance to the implied licence doctrine utilised by some national judges, meaning that even if something is not factually authorised by an owner of a protected work, it is not necessarily unlawful if the owner has led third parties to believe that there is an implicit approval.88 If the Court had decided otherwise in Svensson, the repercussions to online linking would have been disastrous – potentially any link to copyrighted material would always require a permission from the content owner. This could be especially detrimental for freedom of expression on the Internet. However, the Court did not explicitly express these potential aspects.
This leads to an intriguing area that the Court left quite unexplored in Svensson – what exactly is the definition of “freely accessible” when a protected work is in question, and where should the line be drawn in regards of what is and what is not freely accessible? Also, there are some cases that delve into various types of content that can be targets of hyperlinks, and the result of a case can change according to the type,89 but these aspects fall outside the scope of this thesis.
3.2.3. For-Profit and Not-For-Profit Communication
Based on the case law gone through, posting a hyperlink online can potentially result in copyright liability. Nevertheless, there is some continuation to this line of the Court’s case law, and it appears to be a development that takes the analysis of linking issues in another direction. For the purposes of this thesis, an essential part of the most recent case law is related to profit-making when it comes to determining liability as different entities post hyperlinks on websites. The leading case at the moment is GS Media v. Sanoma90 that unsurprisingly concerns providing hyperlinks to unauthorised material. GeenStijl is a news website in the Netherlands, operated by GS Media, which provided a hyperlink in its news article leading to leaked photos on an Australian file hosting website FileFactory.91 Sanoma
had the rights to those photos, and after FileFactory had removed the photos at Sanoma’s request, GS Media published another news article with a hyperlink to the photos that were of Making Available and Communication to the Public in the European Union – Journal of Intellectual Property Rights 20 (2015), p. 64.
88 E. Arezzo. Hyperlinks and Making Available Right in the European Union – What Future for the Internet
After Svensson? – International Review of Intellectual Property and Competition Law 45(5) (2014), p. 541.
89 See e.g. Case C‑279/13 C More Entertainment AB v Linus Sandberg. ECLI:EU:C:2015:199, paras. 26-27.
90 Case C-160/15 GS Media BV v Sanoma Media Netherlands BV and Others. ECLI:EU:C:2016:644.
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now hosted on another website.92 There was also a third similar news article, despite Sanoma’s demands to remove the links, which eventually led Sanoma and others to bring action.93 Now the question arises if the conduct engaged in by GS Media can be considered as a communication to the public in accordance with the Article 3(1) of the InfoSoc Directive – a question that also was under the review of the Court of Justice.
From the perspective of previous case law, the Court’s approach to hyperlinking was quite lenient, since copyright liability was not that likely to arise.94 But as for similarities to
Svensson, this case differs from it in the sense that in GS Media the copyrighted content was actually freely accessible but it was not legally published by the intellectual property right owner. The Court cited previous case law and proceeded to introduce two new elements of a communication to the public concept in the assessment of hyperlink cases: knowledge of the illegality of the content at issue and secondly profit-making objectives.
The Court seems to take the position of individuals into account when it comes to not-for-profit linking, stating that it may be difficult “--to ascertain whether website to which those links are expected to lead, provides access to works which are protected and, if necessary, whether the copyright holders of those works have consented to their posting on the Internet”.95 This is why the Court drew a line based on profit-making purposes. Hyperlinking to illegally published material fulfils the criteria of a communication to the public if it occurs for profit, since the link provider is expected to carry out “--necessary checks to ensure that the work concerned is not illegally published on the website to which those hyperlinks lead”.96 Thus, it is presumed that a for-profit link provider knows if the content is legally
available or not. Also, this is why the Court in its preliminary ruling answered that the conduct by GS Media constitutes a communication to the public.97
In my view, both legal certainty and freedom of expression would indeed be at risk if individuals were always expected to know if the content they are linking to is legally published. Also importantly, the Court recognised the importance of the Internet for the
92 Ibid., paras. 12 and 14. 93 Ibid., paras. 15 and 17.
94 P. Mezei. Enter the matrix: the effects of CJEU case law on linking and streaming technologies – Journal of
Intellectual Property Law & Practice 11(10) (2016), p. 786.
95 Case C-160/15 GS Media BV v Sanoma Media Netherlands BV and Others, para. 46.
96 Ibid., para. 51. 97 Ibid., para. 54.
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freedom of expression and information,98 but still individuals are not completely safe from liability, because when a person provides a link to a work and they knew or should have known that the work in question is published without authorisation, this act constitutes a communication to the public.99 When it comes to various entities, from now on practically all
commercial companies operating on the Internet have to be extremely careful with hyperlinking. These issues are further discussed in the next chapter.
3.3. Liability for Providing Public Wi-Fi Services
This section deals with the hypothetical situation of a legal or natural person offering a public Wi-Fi service that is accessible to anyone, and the liability arising from this when the Wi-Fi connection is used infringe upon a third party’s intellectual property rights, such as committing a communication to the public through a hyperlink to protected content. Naturally, it would make sense for the right owner to always take action against the party who committed the IP infringement, but in this instance, that could be quite cumbersome and potentially impossible. That is why a mere business owner or an individual as an intermediary may face this indirect liability. Furthermore, injunctions applied by IP right holders against third party infringers are a relevant aspect, which means that a major part of the main problem comes down to tort law. These injunctions are increasingly targeted towards Internet service providers, since often they are in the best position to bring an infringement to an end.100 The majority of the recent case law stemming from the Court of Justice has revolved around the liability of Internet service providers. However, the scope of this thesis is limited to individual Wi-Fi providers, and the liability of actual Internet service providers is not reviewed.
First of all, the E-Commerce Directive sets up a safe harbour for liability for intermediary service providers, including the acts of mere conduit, caching and hosting, subject to certain criteria.101 Even though the directive has led to the harmonisation of the substantive laws of
the Member States, for a long period there have been discrepancies arising from differing approaches of the Member States, since the directive harmonised only the exoneration from liability and not the question when a person is actually liable.102 It appears that the question of
98 Ibid., para. 45. 99 Ibid., para. 49.
100 T-E. Synodinou. Intermediaries’ liability for online copyright infringement in the EU: Evolutions and
confusions – Computer Law & Security Review 31 (2015), p. 59.
101 Arts. 12, 13 and 14 of the Directive 2000/31/EC. 102 T-E. Synodinou (supra note 100), p. 57.
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liability is strictly left for the national courts. Thus, it has been argued that there is a need for legislative reform by the EU legislator in order to tackle issues arising from intermediary liability.103
Another piece in this puzzle is the Enforcement Directive that requires that the Member States ensure the possibility of issuing injunctions against infringers of intellectual property rights.104 The directive states that injunctions can be applied against “--intermediaries whose services are used by a third party to infringe an intellectual property right, without prejudice to Article 8(3) of Directive 2001/29/EC”105 which ensures the same right to apply for injunctions against intermediaries infringing copyrights or related rights.106
3.3.1. Intermediaries and Information Society Services
The Court of Justice has answered some of the questions stemming from these legislative instruments in its preliminary rulings. The first question arising in this context is the definition of an intermediary to which there is no unambiguous answer in the legislation107 or the Court’s case law. However, in Tele2 the Court was essentially asked if an Internet service provider that does not offer other services or have any control over the provided services can be considered to be an intermediary in the context of Article 8(3) of the InfoSoc Directive,108 to which the Court answered in the affirmative.109 Thus, for a service provider to be regarded as an intermediary, it is enough that the provider supplies the connection or a part of the network that is subsequently used to infringe third party rights,110 which means that liability is not necessarily limited to Internet service providers.111
Secondly, the meaning of “information society services” under the E-Commerce Directive, which defines the scope of application of the Directive and hence liability for intermediaries, is defined in the Technical Standards and Regulations Directive as “--any service normally
103 See e.g. C. Angelopoulos. Beyond the Safe Harbours: Harmonising Substantive Intermediary Liability for
Copyright Infringement in Europe – Intellectual Property Quarterly 3 (2013), pp. 253-274.
104 Arts. 9 and 11 of the Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004
on the enforcement of intellectual property rights. OJ L195, 2.6.2004.
105 Art. 11 of the Directive 2004/48/EC. 106 Art. 8(3) of the Directive 2001/29/EC.
107 M. Leistner. Structural aspects of secondary (provider) liability in Europe – Journal of Intellectual Property
Law & Practice 9(1) (2014), p. 76.
108 Case C-557/07 LSG-Gesellschaft zur Wahrnehmung von Leistungsschutzrechten GmbH v Tele2
Telecommunication GmbH. ECLI:EU:C:2009:107, para. 30.
109 Ibid., para. 46. 110 Ibid., paras. 43-46.
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provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services”.112 Generally in the Court’s case law, the range of information society
services that fall into the scope of the E-Commerce Directive is defined broadly.113 As an example in Google France, the Court of Justice ruled that an online advertising service falls into the category of information society services.114 The next necessary question is if this definition can be applied to public Wi-Fi services that are actually provided for free, taking into account the part of the definition concerning remuneration. In relation to the remuneration question, in Papasavvas the Court assessed a situation where online information services were provided without direct remuneration from the recipients of those services, whereas the service provider got remunerated from advertisements on the website.115 The Court stated, by referring to Recital 18 of the E-Commerce Directive, that information society services extend to services “--which are not remunerated by those who receive them, such as those offering on-line information or commercial communications”116 provided that they represent economic activity.117 Therefore, remuneration arising from offered services does not have to be direct but the income can be generated from elsewhere. To reflect this reasoning, the Court recently provided continuation to the same issue in Mc Fadden118 which is currently the leading case in the area of Wi-Fi providers’ liability.
Mr. Mc Fadden ran a sound system business in Germany, and in order to attract more customers, he provided a public Wi-Fi connection that was free for everybody and not password-protected.119 This Wi-Fi network was used to make available on the Internet a musical work, rights for which were owned by Sony Music, which amounted to an infringement of Sony’s IP rights.120 Subsequently in the national court, a question arose if Mc
Fadden should be held liable for the anonymous copyright infringement on account of not
112 Art. 1(b) of the Directive (EU) 2015/1535 of the European Parliament and of the Council of 9 September
2015 laying down a procedure for the provision of information in the field of technical regulations and of rules on Information Society services. OJ L241, 17.9.2015, pp. 1–15.
113 M. Leistner (supra note 107), p. 77.
114 Joined Cases C-236/08 Google France SARL and Google Inc. v Louis Vuitton Malletier SA, C-237/08 Google
France SARL v Viaticum SA and Luteciel SARL and C-238/08 Google France SARL v Centre national de recherche en relations humaines SARL and Others. ECLI:EU:C:2010:159, para. 110.
115 Case C-291/13 Sotiris Papasavvas v O Fileleftheros Dimosia Etaireia Ltd and Others.
ECLI:EU:C:2014:2209, para. 26.
116 Recital 18 of the Directive 2000/31/EC.
117 Case C-291/13 Sotiris Papasavvas v O Fileleftheros Dimosia Etaireia Ltd and Others, para. 28.
118 Case C-484/14 Tobias Mc Fadden v Sony Music Entertainment Germany GmbH.
119 Ibid., paras. 22-23. 120 Ibid., paras. 25-26.
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securing the network that was used.121 As regards the aspect of Mc Fadden’s free Wi-Fi service falling into the scope of the E-Commerce Directive, the Court recalled its previous case law and legislation and referred to the aforementioned definition on what constitutes an information society service, stating that there is a requirement that the services are normally provided for remuneration.122 In other words, there needs to be economic activity. Consequently, Mc Fadden’s service was deemed to fulfil the criteria even though there was no direct remuneration for it, since the free Wi-Fi was provided to advertise goods and services – it served an economic purpose.123 It appears that for a Wi-Fi service to fall into the scope of the E-Commerce Directive, the bar is not set too high, since as long as the service provider has monetary goals, it can be argued that the network provided is qualified as a part of the business in question.
3.3.2. Mere Conduit
After determining that a provided service by an intermediary constitutes an information society service, the issue turns to the potential liability of the business owner. The most relevant of the safe harbours protecting intermediaries from liability set out in the E-Commerce Directive for the purposes of this thesis is the concept of mere conduit under Article 12, stating that “Where an information society service is provided that consists of the transmission in a communication network of information provided by a recipient of the service, or the provision of access to a communication network, Member States shall ensure that the service provider is not liable for the information transmitted--".124 However, the Article lays down three cumulative conditions that need to be met: the provider “--(a) does not initiate the transmission; (b) does not select the receiver of the transmission; and (c) does not select or modify the information contained in the transmission”.125 In other words, the intermediary cannot play a part in the act of transmission – his role is purely passive. If the service provider fulfils the three conditions, he cannot be subjected to civil liability or
121 Ibid., para. 32. 122 Ibid., paras. 36-41. 123 Ibid., paras. 42-43.
124 Art. 12(1) of the Directive 2000/31/EC. 125 Ibid.
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criminal prosecution.126 Still, national courts or administrative authorities can require the provider to terminate or prevent an infringement.127
The case law on mere conduit was scarce until the Court of Justice ruled on providing a public Wi-Fi for free in Mc Fadden. The Court confirmed that the mere conduit concept is limited to “mere technical, automatic and passive nature” in accordance with Recital 42 of the E-Commerce Directive.128 Furthermore, there are no other conditions, like a contractual
relationship between the recipient and the provider of a service, that need to be satisfied.129
The Court said that even though Mc Fadden provided a communication network that was used to infringe upon the rights of third parties, compensation cannot be claimed from the provider, but this does not preclude claiming injunctive relief against the continuation of the infringement in accordance with Article 12(3).130
Lastly in Mc Fadden, the Court assessed the aspect of fundamental rights and balancing them with each other, in particular the conflict between the protection of intellectual property rights and the freedom to conduct a business.131 In that context, the Court examined potential injunctions to prevent recurring IP right infringements and struck down the possibility of examining all communications passing through the network since Article 15(1) of the E-Commerce Directive excludes this obligation,132 and terminating the connection would impede the service provider’s freedom to conduct a business.133 What the Court did endorse,
is that securing the Internet connection with a password would be able to protect the fundamental right to protection of intellectual property.134 The reasoning behind this was that password-protection “--may dissuade the users of that connection from infringing copyright or related rights, provided that those users are required to reveal their identity in order to obtain the required password and may not therefore act anonymously--”.135 However, this was left for the national court to ascertain. Mc Fadden appears to be an extremely important decision in the area of interpretation of the E-Commerce Directive, especially in regards of
126 C. Angelopoulos. European Intermediary Liability in Copyright: A Tort-Based Analysis. PhD thesis –
University of Amsterdam 2016, p. 49.
127 Art. 12(3) of the Directive 2000/31/EC.
128 Case C-484/14 Tobias Mc Fadden v Sony Music Entertainment Germany GmbH, para. 48.
129 Ibid., para. 50. 130 Ibid., para. 79. 131 Ibid., paras. 81-82. 132 Ibid., para. 87. 133 Ibid., paras. 88-89. 134 Ibid., para. 99. 135 Ibid., para. 96.
