Interconnecting content on the Internet lawfully – CJEU and hyperlinking of copyrighted material

On April 9, an important CJEU case reached the Advocate General Opinion stage. The case involves Sanoma, publishers of the Playboy magazine, who have commissioned nude photographs of a certain Ms Dekker. GS Media is the publisher of a blog which carried a link to a file containing the photos hosted on the Australian file depository system Filefactory.com. Filefactory removed the photos on demand from Sonoma but GS Media refused to remove the link on their website.

The plaintiffs brought an action, claiming that the publication of the links constituted copyright infringement. The Supreme Court of the Netherlands referred several questions to the Court of Justice.

‘1      (a)            If anyone other than the copyright holder refers by means of a hyperlink on a website controlled by him to a website which is managed by a third party and is accessible to the general internet public, on which the work has been made available without the consent of the right holder, does that constitute a “communication to the public” within the meaning of Article 3(1) of Directive 2001/29?

(b)      Does it make any difference if the work has also not previously been communicated, with the rightholder’s consent, to the public in some other way?

(c)      Is it important whether the “hyperlinker” is or ought to be aware of the lack of consent by the rightholder for the placement of the work on the third party’s website mentioned in 1(a) above and, as the case may be, of the fact that the work has also not previously been communicated, with the rightholder’s consent, to the public in some other way?

2      (a)   If the answer to question 1(a) is in the negative: in that case, is there, or could there be deemed to be, a communication to the public if the website to which the hyperlink refers, and thus the work, is indeed findable for the general internet public, but not easily so, with the result that the publication of the hyperlink greatly facilitates the finding of the work?

(b)      In answering question 2(a), is it important whether the “hyperlinker” is or ought to be aware of the fact that the website to which the hyperlink refers is not easily findable by the general internet public?

These, essentially, boil down to a question of whether posting a link to a website amounts to a communication to the public in terms of Article 3(1) of the Copyright Directive.

These questions have already been addressed in two previous CJEU cases, decided in 2014.

In Svensson and Others (C‑466/12, EU:C:2014:76) the Court ruled that “the provision on a website of clickable links to works freely available on another website does not constitute an ‘act of communication to the public’, as referred to in that provision.” This was because the work had not been communicated to a new public nor had technical means that differ from the original ones been employed. Importantly, the Court  concluded that Member States are not at a discretion to give Article 3(1) a wider interpretation than it already has.

Likewise, in BestWater International (C‑348/13, EU:C:2014:2315), the Court said that “framing” of one website (YouTube) inside of another does not constitute communication to the public in terms of Article 3(1). In this case, the initial communication had not been authorized but the Court did not give further clarification as to how that fact might change the decision.  Like in Svensson, the Court concluded that no new public had been granted access to the work and no new technical means had been used.

Neither case had really clarified the situation concerning linking to a potentially unlawful source nor whether the hyperlinker’s awareness of the illegality played a role. The AG is acutely aware of this in paragraph 43.

The present case thus gives the Court an opportunity to determine whether the authorisation by the copyright holder of the making available of the protected work on the other website (‘initial’ communication) is essential to a finding that there is no communication to the public within the meaning of Article 3(1) of Directive 2001/29.

In the view of the AG, in order to be considered a “communication to the public” as per Article 3(1), the intervention of the hyperlinker must be “vital or indispensable”. In comparison to Premier League case, where no football matches would have been shown had the public house proprietors not taken the steps they took, the hyperlinkers here merely facilitate access to what is, essentially, already there. In the view of the Advocate General, the intervention of GS Media is not indispensable for getting hold of the photographs which are already stored, legally or not, on Filefactory’s servers. For that reason, no “act of communication” had taken place, as required by Article 3(1).

The second part of Advocate General’s analysis concerns the analysis of the “public” to which the work had been communicated. Following the “new public” line of reasoning, the AG concludes that, since no initial authorisation happened here, the “new public” criterion is of no relevance. Although the website’s audience is wide, the photographs have already been made available on other websites. The importance of that becomes apparent in paragraphs 73 and 74:

  1. In any event, it is clear from the judgment in Svensson and Others(C‑466/12, EU:C:2014:76, paragraph 31) that if a hyperlink makes it possible for users of the site on which it appears to ‘circumvent restrictions’ (43) put in place on third-party websites to limit access to protected works, (44) the hyperlink in question constitutes an indispensable intervention without which those users could not enjoy the works. Accordingly, that intervention makes the works in question available to visitors to the website in question, in this case visitors to the GeenStijl website, and therefore constitutes an act of communication to a public which must be authorised by the copyright holder pursuant to Article 3(1) of Directive 2001/29.

  2. On the other hand, it is clear from paragraph 31 of the judgment in Svensson and Others(C‑466/12, EU:C:2014:76) that it is not sufficient that the hyperlink facilitates or simplifies users’ access to the work in question. […]

In analysing other circumstances which may be relevant, the AG  says that “[…]as a general rule, internet users are not aware and do not have the means to check whether the initial communication to the public of a protected work freely accessible on the internet was effected with or without the copyright holder’s consent.”

The final conclusion is mostly in agreement with the Svensson line of cases. The conclusion is that posting a link to unauthorized content is not communication to the public, that it is irrelevant whether posters were aware that authorization had not been given and that hyperlinking which “simplifies” access rather than find new audience is not communication to the public.

In our own opinion, this approach leaves some important questions unanswered. The AG indicated that the link poster’s awareness of the illegality of the content linked does not play a role since either the conditions in Article 3(1) are fulfilled or they are not, in which case awareness cannot play a role (paragraph 63). This may be so but such an interpretation does not distinguish between two types of situations in which hyperlinking can be damaging. The first is the situation in this case where the primary infringement is taking place on a server not connected with the hyperlinker and where the hyperlinker is referring to something that is very likely already in distribution in some form or another. The hyperlinker here is, if not entirely neutral, certainly not primarily a promoter of the infringement.

The second type of situation is entirely different and refers to websites the sole purpose of which is to distribute illegal copies of audio-video files otherwise in some form of commercial distribution. In this scenario, an operator of a forum or blog is posting links to file deposit sites, such as the one in question here with full knowledge and awareness that these files are distributed in violation of copyright law. Most of these files may, indeed, also be linked from other forums. Applying the Svensson line of cases, a conclusion could be reached that a) since there is (largely) no new audience and no new technical means and, since this is just a simplification of (an illegal) distribution already happening, there is no making available; b) the complete lack of good faith on the hyperlinker’s part is not relevant and c) if the right holder desires to commence legal action for infringement or obtain an injunction, they may do so against the primary infringer which is, presumably, the person or persons posting on the file depository which, in its turn, is subject to general ISP liability protection.

It appears that the suggestion in paragraph 73 quoted above, which refers to Svensson paragraph 31, does not resolve the tensions here. The Svensson paragroah 31 says:

‘where a clickable link makes it possible for users of the site on which that link appears to circumvent restrictions put in place by the site on which the protected work appears in order to restrict public access to that work to the latter site’s subscribers only, and the link accordingly constitutes an intervention without which those users would not be able to access the works transmitted, all those users must be deemed to be a new public, which was not taken into account by the copyright holders when they authorised the initial communication, and accordingly the holders’ authorisation is required for such a communication to the public’. (emphasis added)

What is promoted here is “indispensable” hyperlinking as opposed to “facilitating” hyperlinking. The former is an act of communication to the public, the latter is not. The problem arises from the insisting on the existence of copy restrictions. If such restrictions (as per Article 6 of the Copyrigth Directive) had been put in place, the hyperlinking is a communication to the public. If not, it will fall under the non-essential “facilitating” kind.

Such a conclusion cannot possibly be right for at least two reasons.

First, why would the right holder only be granted protection where they have availed themselves of the possibilities Article 6 offers? In that scenario, a right holder who distributed through, say, iTunes, would be protected, whereas the one who broadcasted on TV or streamed very likely would not.

Second, copyright violations on the Internet are usually facilitated through multiple fora which all link to the same files on the same depository sites (often multiple ones). No distribution would here be possible at all, if it was not for these hyperlinks since depository files do not themselves offer search facilities. In the same manner, the reason why PirateBay and similar sites are the usual targets of copyright infringement lawsuits is precisely because the essential element of illegal file distribution is their facilitator function.  In other words, the facilitator function is often the essential element in the copyright violation chain irrespective of whether there is a “circumvention restriction” or not.

All the previous cases are essentially about the extent to which content on the Internet can be interconnected. The AG’s conclusion in this case preservers the functionality and importance of hyperlinking as an important tool through which modern Internet functions but it fails to address a host of other cases where hyperlinking has no other purpose than to distribute illegal files. It remains to be seen to what extent the Court accepts his opnion.

Do network-wide ad-blocks really violate Net Neutrality? – An EU perspective

Ad blocking has been on the rise for a number of years. The 2015 Ad Blocking Report claims that ad blocking is estimated to cost publishers $22 billion in 2015, the year in which it has grown 41% compared to the previous year. At the same time, ad blocking penetration stood at 15% in the USA and 25% in Germany. And it keeps growing.

While ad blocking as a problem has so far concentrated on the users and their deployment of blocking software on the perriphery, several sources (see e.g. FT article) have recently reported that EU mobile operators intend to introduce network-wide advertisement blocking. One of the first credible threats came in February 2016 from the mobile operator Three. They rely on a technology produced by an Israeli company called Shine.

Blocking ads on mobile networks seems to be a result of increasing frustration of mobile operators who see ad networks enjoy increasing profits without the need to invest in the infrastructure. Mobile internet ad spending is set to stand at about $100 billion in 2016 with a projected increase in the years to come and network operators seem to want a share of that cake. Platforms which rely on ads, such as Google, on the other hand, argue that blocking makes no sense since content production which they engage in also requires investment and relies heavily on income generated by advertising.

Do network-wide ad-blocks violate the principle of net neutrality?

First, net neutrality is a complex set of problems that tends to get oversimplified and politicized. In reality, few understand it properly and even fewer have a grasp of the relationship that law has to technology. To put it in very simple terms, net neutrality is a principle which commands Internet Service Providers to treat all traffic equally, irrespective of the type, content, platform, application, etc. It can be understood as a principle that describes how Internet operates at present (it possesesnon-discriminatory properties) but it can also be understood as a regulatory principle (legislation is needed to protect net neutrality). Often the two come together in a (rather political) claim that, since the Internet is “neutral”, legislation is needed to addressed real or perceived threats to that neutrality. Importantly, the regulation of interconnection and peering is, by definition, not covered by net neutrality. In other words, net neutrality only controls what is happening on the “last mile“, between an ISP and the user. It says nothing about how ISPs regulate their own interconnection to other providers. Such relationships are only subject to contract law and competition law.

There are, at present, two opposing camps in relation to how net neutrality ought to be regulated. One is claiming that net neutrality is necessary to preserve the free and open Internet such as we know it while the other is saying that introducing legislation to protect net neutrality hampers investment and is a solution in search of a problem. This author tends to agree with the latter view.

The US and the EU have different views on net neutrality. While the US introduced a relatively strong form of net neutraluty in 2014, the EU opted for the weak one in its 2015 telecoms reform (effective from 30 April 2016). The EU version allows for fast lanes, as long as there is no discrimination in the main internet pipe.

How would EU rules react to the ad blocking problem? The key provision is Article 3(3) in the new Regulation:

Providers of internet access services shall treat all traffic equally, when providing internet access services, without discrimination, restriction or interference, and irrespective of the sender and receiver, the content accessed or distributed, the applications or services used or provided, or the terminal equipment used.

The first subparagraph shall not prevent providers of internet access services from implementing reasonable traffic management measures. In order to be deemed to be reasonable, such measures shall be transparent, non-discriminatory and proportionate, and shall not be based on commercial considerations but on objectively different technical quality of service requirements of specific categories of traffic. Such measures shall not monitor the specific content and shall not be maintained for longer than necessary.

Providers of internet access services shall not engage in traffic management measures going beyond those set out in the second subparagraph, and in particular shall not block, slow down, alter, restrict, interfere with, degrade or discriminate between specific content, applications or services, or specific categories thereof, except as necessary, and only for as long as necessary, in order to:

  1. comply with Union legislative acts, or national legislation that complies with Union law, to which the provider of internet access services is subject, or with measures that comply with Union law giving effect to such Union legislative acts or national legislation, including with orders by courts or public authorities vested with relevant powers;

  2. preserve the integrity and security of the network, of services provided via that network, and of the terminal equipment of end-users;

  3. prevent impending network congestion and mitigate the effects of exceptional or temporary network congestion, provided that equivalent categories of traffic are treated equally.

This provision makes it obvious that “discrimination, restriction or interference” is not allowed but also that “reasonable traffic management rules” is. Such traffic management must be “transparent, non-discriminatory and proportionate” and cannot be based on “commercial considerations”.

There is mounting evidence that mobile ads do gobble data and slow traffic (see here and here). Ender Analysis released a report in March 2016, claiming that between 18% and 79% of traffic is attributed to mobile ads. All that is required, in other words, is for the operator to show that ad traffic is causing disturbances in network traffic. This would almost certainly be allowed to stand even if the ultimate motive is commercial, i.e. if the real drive is an increase share of mobile ad revenues.

The key to understanding this problem is in the nature of the ads in question. Mobile ads are demanding on traffic and integrated with the content. They bring data congestion, security and privacy risks. As such, they would fit perfectly within letter b) (integrity and security of network). The Ender report further says “On the basis of this investigation, an estimate that says advertising accounts for half of all data used by publisher pages on iPhones does not look unreasonable. Publisher mobile pages are bloated, and advertising is an enormous part of that.”

It is entirely possible that network-wide ad blocking may have implications that arise out of contract law, advertising law or unfair competition law.  In the view of this author (although there are also opposing views) blocking ads on a network basis is not a net neutrality issue and is easily justified by reasons of traffic management.  A preliminary answer will be provided by Body of European Regulators for Electronic Communications (BEREC), who is supposed to published their draft net neutrality guidelines at some point in June 2016. The final answer will almost certainly have to wait for a Court of Justice reference.