Liability of Intermediary Service Providers in the EU Directive on Electronic Commerce

By Baistrocchi, Pablo Asbo | Santa Clara Computer & High Technology Law Journal, December 2002 | Go to article overview

Liability of Intermediary Service Providers in the EU Directive on Electronic Commerce


Baistrocchi, Pablo Asbo, Santa Clara Computer & High Technology Law Journal


I. INTRODUCTION

The growth of e-commerce has been extremely rapid in recent years. By the year 2000, its worth exceeded 17 billion euro, and it is expected to reach 340 billion euro by the end of 2003. (1) These numbers reflect the importance of this factor in the construction of the internal European market. In striving for the high level of harmonization necessary for the many issues related to this industry, it is important that there be due regard for the predictable downstream effects and a method of systematic prioritization.

This Article will deal with a key element in the development of e-commerce initiatives within the European Union: the liability of intermediary service providers [hereinafter ISPs]. The structure of the Article will begin with a discussion of the main aims of the EU Directive dealing with these important concepts; followed by an examination of the different levels of liability to which ISPs are exposed, the areas of liability that can be touched through ISP activities, and the diverse roles that ISPs play. Next, in describing the formulations surrounding the issue, the liability of ISPs within the activities covered by the Directive will be discussed. And finally, some recommendations to improve the Directive's effectiveness in the context of the Digital Millennium Copyright Act (2) [hereinafter DMCA] of the United States will be discussed, as the current EU Directive draws many of its provision from the DMCA.

II. AIMS OF THE DIRECTIVE ON E-COMMERCE

The motivation behind the EU Directive on electronic commerce is to develop information society services [hereinafter ISS], ensure legal certainty and consumer confidence through the coordination of national laws, and clarify legal concepts for the proper functioning of the internal market, in order to create a legal framework to ensure the free movement of ISS between Member States. (3) This specific "free movement of services" is part of a general principle of law in the European Economic Community [hereinafter Community], namely freedom of expression, as enshrined in Article 10(1) of the European Convention on Human Rights and Fundamental Freedoms. (4) This principle is subject only to restrictions expressed in paragraph 2 of that Article and in Article 56 (1) of the EC Treaty. (5)

Specifically, the Directive's aims regarding liability issues are to streamline the functioning of the internal market, enhance the development of cross-border services, and eliminate distortions of competition through the harmonization of national provisions concerning liability of ISPs acting as intermediaries. (6) The Directive also intends to be the appropriate foundation for the establishment, through voluntary agreements between all parties concerned and encouraged by Member States, of reliable procedures for removing and disabling access to illegal information. (7)

III. IMPORTANT CONCEPTS

Before getting into an analysis of the Directive's provisions regarding ISP liability, it is appropriate to define the concepts for the different terms that will be dealt with throughout the remainder of this Article.

First, the Directive defines "information society services" as "any service normally provided for remuneration, at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, and at the individual request of a recipient of a service." (8) Some of the activities included in the definition are the sale of goods on-line, the transmission of information via a communication network, the hosting of information provided by a recipient of the service, services which are transmitted point to point, e.g., video-on-demand and commercial communications by electronic mail, and services which are not remunerated by those who receive them, e.g., tools allowing for search, access, and retrieval of data. (9)

The following terms are defined in Article 2: a "service provider" is "any natural or legal person providing an information society service," and an established service provider is a service provider who effectively pursues an economic activity using a fixed establishment for an indefinite period. …

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