Fundamentals of IT Law and Online Platforms Liability

UNIVERSITÀ POLITECNICA DELLE MARCHE

Online Platforms Liability: Evolution and Current Landscape

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SI
CNICA
UN
E
DELL
RC
UNIVERSITÀ
POLITECNICA
DELLE MARCHE
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Facoltà di Economia "Giorgio Fuà"
Fundamentals of
IT LAW
Prof. Roberto Ruoppo
www.univpm.it2
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Online platforms liability
It is a crucial issue since through their activity and their
regulation it is possible to understand how the digital world
has changed and has developed
It is possible to record a switch from an economic
perspective to a human-rights oriented one
More attention is paid in current landscape to users' rights
and demand of protection3

Internet Service Providers Liability

Role of Internet Service Providers in Information Sharing

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Online platforms liability
· Internet service providers play a significative role in
sharing information
· Through their activity several violations can be
committed: defamation; intellectual property
infringements (see, e.g. social networks and intellectual
property)
. While the illicit's author is liable, can the internet service
provider be considered liable too?ERSITA PO
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Internet service providers
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Platforms Involved in Liability Issues

Which are the platforms involved in this theoretical issue:
· Web Search Engines (such as Google)
. Social networks (such as Facebook or Instagram)
. Third party content aggregators (such as Youtube)ARSITA PO
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Online platforms liability
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Legal Framework: EU Directive 31/2000

Where is it regulated?
. The legal framework of internet service providers liability is
represented by EU Directive on e-commerce, no. 31/2000
. The general rule is represented by Art. 15: member States
shall not impose to internet service providers a general duty
to monitor the information which they transmit or store
· Which is the reason of this rule?ERSITA PO
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Online platforms liability
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Rationale Behind Article 15 Exemption

. The general rule is represented by Art. 15: member States
shall not impose to internet service providers a general duty
to monitor the information which they transmit or store
. The reason of this rule: safeguard internet service providers
encouraging their activity by not imposing obligations that
can impair them (this was the same rationale for no
preventive authorization for Information Society Services as
well). The main purpose is to improve their economic
growthARSITA PO
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Online platforms liability
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Activities Regulated by EU Directive 31/2000

What are the activities regulated by EU Directive 31/2000
· Mere conduit (art. 12): 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, Member States shall ensure that the
service provider is not liable for the information transmitted
· Caching (art. 13): Member States shall ensure that the
service provider is not liable for the automatic, intermediate
and temporary storage of that information
· Hosting (art. 14): the service provider is not liable for the
information stored at the request of a recipient of the
service8

Exemption of Liability and Passive Character

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Online platforms liability
The exemption of liability (Art. 15) presupposes the
extraneousness in respect to the informations transmitted and
the passive character of the internet service provider
· What does the passive character of the internet service
provider mean? There is no awareness in relation to the
information shared through it; no control and no filter
. E.g. what are the requirements for the exemption of liability
of the hosting provider? i) the provider does not have actual
knowledge of illegal activity or information; ii) the provider,
upon obtaining such knowledge or awareness, acts
expeditiously to remove or to disable access to the
informationERSITA PO
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Online platforms liability
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Recital 42 of EU Directive 31/2000

In this regard a key role is played by the recital 42 of EU
Directive 31/2000, that expressly states that
«The exemptions from liability established in this Directive
cover only cases where the activity of the information society
service provider is limited to the technical process of operating
and giving access to a communication network over which
information made available by third parties is transmitted or
temporarily stored, for the sole purpose of making the
transmission more efficient; this activity is of a mere technical,
automatic and passive nature, which implies that the
information society service provider has neither knowledge of
nor control over the information which is transmitted or
stored»10

Reasons for Exemption of Liability Rule

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Online platforms liability
Why European institutions have introduced the exemption of
liability rule?11
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Online platforms liability
Why European institutions have introduced the exemption of
liability rule?
1) Technologies available at the beginning of 2000s did not give
any guarantee about the possibility for internet service
providers to exercise a form of control in relation to the
information uploaded by users:
Establishing their liability would have meant to introduce a
form of objective liability: objective liability represents a form
of involvement in the illicit without negligence or willful
misconduct12
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Online platforms liability
Why European institutions have introduced the exemption of
liability rule?
2) The aim was to encourage the activity of online platforms
and their economic development: in the balance between
economic purposes and users' safeguards a priority was given
to the first interest13

Court and Administrative Authority Powers

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Online platforms liability
For the activities of mere conduit, caching and hosting it is
established that it is not affected the possibility for a court or
administrative authority, in accordance with member States
legal systems, of requiring the service provider to terminate or
prevent an infringement
Member States may establish obligations for information
society service providers promptly to inform the competent
public authorities of alleged illegal activities undertaken or
information provided by recipients of their service or
obligations to communicate to the competent authorities
information enabling the identification of recipients of their
service with whom they have storage agreements14

Technological Changes and Control Capabilities

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Online platforms liability
Nowadays the situation has substantially changed, since
internet service providers have developed technologies and
instruments useful to ensure the exercise of a strict control on
information uploaded by users
After 20 years a significant development has been carried out
by digital players: e.g. algorithms and their employment for
Artificial Intelligence tools15

Emergence of the "Active Internet Service Provider"

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Online platforms liability
For this reason a new type of internet service provider has
emerged
The so called «active internet service provider»: a particular
kind of platform that has the power to effectively monitor the
activities made by users
Which are the technical tools through which carry out this kind
of control? Filter, selection, indexing, organization, evaluation,
promotion of contents, economic exploitation of data shared
through advertisement16

Platforms Involved in Active ISP Issues

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Internet service providers
liability
Which are the platforms involved in this theoretical issue:
· Web Search Engines (such as Google)
. Social networks (such as Facebook or Instagram)
. Third party content aggregators (such as Youtube)ERSITA PO
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Internet service providers
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Definition of Active Service Provider

The teoretical elaboration of the notion of «active» internet
service provider: it is a «case-law» creation
Active service provider can be defined as the internet service
provider whose activity goes beyond a technical, automatic
and passive service, managing in an active way data shared on
the online platform
Therefore it can be considered to concur in the illicit
commission: which is the behaviour that can be attributable
to the online platform?ERSITA PO
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Internet service providers
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Liability Linked to Omission and Lack of Control

In this case the disputed behaviour is an omission
Their liability is linked to the lack of control, lack of diligence19

Elements to Consider an Active Subject

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Internet service providers
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Which are the elements/indexes useful to consider the
internet service provider as an active subject?
•
i) Association of advertisement to contents uploaded by
users on the platform;
· ii) A contractual provision through which the provider
retains some rights on the contents uploaded on the
platform;
. iii) An alert service in order to claim the illicit content
uploaded;20

Conditions for Active Service Provider Liability

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Internet service providers
liability
· When we are dealing with an active service provider, when in
concrete it can be considered to be liable?
When it has not removed the access to the information
When it has knowledge of the illicit committed (even through
a notification rendered by the person whose rights have been
violated)
When the violation, and thus the illicit character of the
behaviour, is easily verifiable in light of the normal diligence
of the provider21

CJEU Statements: L'Oreal v. eBay Case

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Internet service providers
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The most important statements of the CJEU in this regard:
· CJEU, L'Oreal v. eBay, 12 July 2011
Relevant facts:
eBay offered L'Oreal products through their indexing and
addressing the consumer to others websites than L'Oreal ones;
Furthermore eBay offered the sale of free products such as
«tester» that could not be be put on the market pursuant to the
commercial rules of L'Oreal
Is it a passive or an active ISP?