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European Union: European Court of Justice Rules on Illegal Downloading of Songs by Internet Users

(Apr. 4, 2012) On February 16, 2012, the European Court of Justice (ECJ) rendered an important judgment on the illegal downloading of songs by Internet users. The ECJ held that online social network sites cannot be forced to adopt the use of measures such as filtering systems in order to prevent the sites' users from downloading songs illegally. (Press Release, No. 11/12, European Court of Justice, The Owner of an Online Social Network Cannot Be Obliged to Install a General Filtering System, Covering All Its Users, in Order to Prevent the Unlawful Use of Musical and Audio-Visual Work (Feb. 16, 2012).)

The facts of the case involve the initiation of a lawsuit before the ECJ by Sabam, a Belgian national music royalty-collection society, against Netlog, a social network site that is similar to Twitter and Facebook. The case arose in 2009, when Sabam sought an injunction before the Court of First Instance in Belgium to compel Netlog to take measures to prevent users from downloading songs illegally and to pay a daily €1,000 (about US$1,330) penalty in the case of non-compliance. In its defense, Netlog claimed that under the European Union Directive on Electronic Commerce, the imposition of such a requirement on Netlog is prohibited. (Id.) The EU Directive removes any barriers to cross-border online services and establishes rules for electronic communications and online contracts. (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 (Directive on Electronic Commerce), 2000 OFFICIAL JOURNAL OF THE EUROPEAN UNION (L178) 1.)

The Belgian Court asked for a preliminary ruling as to whether European Union law precludes a national court from issuing an injunction against an Internet service hosting provider that obliges the provider to install a filtering system at its own expense and for an unlimited period, which would apply indiscriminately to all its users. (Press Release, supra.)

In its ruling, the ECJ first confirmed that Netlog meets the requirements of a hosting service provider, that a filtering system would enable Netlog to identify all the files stored on its servers by the service users, and that such files may contain works that belong to copyright holders. Consequently, the ECJ reasoned, the hosting service provider, such as Netlog, would have to ascertain which of these stored files contain works that are available to the users unlawfully, and it would have to prevent the use of such files through filtering systems. (Id.)

The ECJ noted that national authorities, in protecting the rights of copyright holders, must balance the rights of the holders and the fundamental rights of users who are likely to be impacted by such protective measures. The users' rights include the right to their personal data and the right to receive and impart information. The ECJ affirmed that the Directive on Electronic Commerce prohibits the “general monitoring of the information stored on its servers.” (Id.)The ECJ held:

in adopting an injunction requiring the hosting service provider to install such a filtering system, the national court would not be respecting the requirement that a fair balance be struck between the right to intellectual property, on the one hand, and the freedom to conduct business, the right to protection of personal data and the freedom to receive or impart information, on the other. (Id.)