UK: ISPs Beware: Current Liability Regime For On-Line Illegal File Sharing Called Into Question

Last Updated: 3 July 2008
Article by Rebecca Anderson

The on-going debate between the entertainment industries and Internet Service Providers ("ISPs") centring round the extent to which ISPs should be liable for illegal activities occurring over their networks has recently intensified following the release of a strategy paper entitled "Creative Britain: New Talents for the New Economy"1 (the "Strategy Paper") by the Department of Culture, Media and Sport. The Government is encouraging stakeholders to come to a `voluntary' agreement on a workable plan to take action against illegal file sharing. The Strategy Paper sets out a timescale within which content owners and ISPs must have reached an agreement, failing which the Government has made it clear that it "will not hesitate to legislate in this area if required"2.

Illegal downloads – why is there such a concern?

Rights holders have long argued that ISPs should bear some level of responsibility for putting in place technical and operational measures to prevent their subscribers from illegally downloading files from the Internet and from infringing those rights holders' copyright.

To put the gravity of their concerns into perspective, figures available for 2006 indicate that 20 billion music files were illegally downloaded worldwide that year and the music industry estimates that for every single legally downloaded, there are 20 singles illegally downloaded3. The British music industry argues that it is due to this downloading, as well as other factors, that it is experiencing a dramatic decline in revenue. Whilst it is difficult to quantify how much revenue the British market is losing, experts estimate that it is somewhere in the region of £460 million4. In the UK, the creative industries have grown twice as fast as the rest of the economy in recent years and they now account for over 7 per cent of the UK's GDP. Interestingly, the OECD found that the creative industries accounted for a greater share of GDP in the UK than it did in Canada, the USA, Australia or France5.

Little wonder then that the British Government considers that the spread of online piracy could severely undermine the commercial viability of the entertainment industries and dilute the value of copyright law. It is keen to protect the film and music industries and to work hard to maintain the favourable market and economic conditions necessary to stimulate innovation.6

The Government takes action

The Government's Strategy Paper encourages ISPs and rights holders to 'voluntarily' reach agreement on some form of anti piracy system by April 2009. Whilst the Government is hopeful that the parties will be able to reach such an agreement, it recognises that there is a possibility that the parties may fail to do so. Consequently, it is spending 2008 consulting on regulatory arrangements that it could swiftly implement as legislation in April 2009 if no agreement is forthcoming.7 As the Strategy Paper provides little guidance on the possible measures and systems that ISPs and rights holders could adopt in order to curb illegal file sharing, the Government will, presumably, be relying on both parties to agree a reasonable and adequate anti-piracy system which meets the Government's objectives set out in the Strategy Paper.

Introducing an anti piracy regime is just one way in which the Government plans to make the UK a powerhouse in the creative industries. The Strategy Paper sets out twenty-six commitments to ensure that the UK's creative industries are better supported and protected, including commitments to boost penalties for copyright infringement8, fund expert police training to deal with intellectual property crimes, launch various educational and enforcement campaigns9, and promote a better understanding of the value and importance of intellectual property10.

Plans announced in France to provide the blueprint for the UK?

In publishing its Strategy Paper, UK politicians have followed the lead of the French Government which is looking to implement legislation that requires ISPs to monitor their networks for illegal traffic. A Memorandum of Understanding has been signed by key stakeholders including music producers, audiovisual producers, ISPs and public authorities who each pledge to contribute towards fighting online piracy. The plan, which was unveiled by President Sarkozy in November last year, provides for the creation of an independent government body which will operate firstly a system of warnings against an illegal file sharer, followed by the suspension, and then finally termination, of Internet subscriptions used for illegal file sharing - in essence, a "three-strikes-and-you-are-out" policy against persistent/repeat offenders. The independent government body will enforce this system using information provided by ISPs on subscribers who seemingly transfer a high volume of files over the Internet.11

Lord Treisman, who was initially responsible for championing the Strategy Paper, has revealed that the UK Government has been working with the French Government on the legislation that they propose introducing shortly. He believes that both the French and the British Governments will continue to work alongside each other with a view to sharing evidence and analyses. He has, however, commented that the UK Government may not necessarily adopt exactly the same anti-piracy model as that of the French12.

What are the potential difficulties with the British Government's attempt to turn ISPs into the policemen of the Internet?

A. Contrary to the philosophy of the Internet

  • The essence of the Government's strategy, which could force ISPs to monitor the activities of its subscribers, seems to erode the very philosophy of the Internet, namely, the ubiquitous availability and movement of information. The effect of introducing this strategy could result in ISPs limiting lawful content passing over their networks for fear of breaching any legislation introduced by the Government.

B. Contrary to current legislation

  • As the law currently stands, ISPs bear no liability for illegal file sharing as the content is not actually hosted on their servers, it is merely transmitted across their networks. As a result and for the purposes of the E-Commerce (EC Directive) Regulations 200213, ISPs are considered to be "mere conduits" of information and, as such, escape liability for damages or criminal or civil action, provided that they do not become involved in initiating a transmission, selecting the recipient of a transmission or modifying the information contained in the transmission.

  • In addition, under the Regulation of Investigatory Powers Act, the UK's ISPs are not permitted to inspect the contents of the packets of information being transmitted across the Internet without proper authority and only when such action is necessary and proportionate in the context of the issue being investigated. These powers are primarily used by the police to intercept and copy email and other traffic in terrorism investigations. It is doubtful, therefore, whether snooping on subscribers' internet traffic to protect the commercial interests of the entertainment industries would be allowed under, or fall within the ambit of, the current legislation.

  • If the Government is forced to adopt new legislation in April 2009 in the absence of any voluntary agreement, it will not only need to amend a plethora of current UK and Community legislation but its plans could also fall foul of fundamental human rights laws that entitle people to a certain degree of privacy in their communications.

C. Technical difficulties

  • Technical experts consider that the proposals will be very difficult to implement and enforce. The UK's Internet Service Providers' Association claims that ISPs cannot monitor or record the type of information passing over their network due to the sheer volume of traffic. It is, therefore, questionable how effective any measures introduced will be.

  • One proposal is for subscribers with high data usage to be highlighted by ISPs as potential file sharers. However, from a technical perspective, it might be difficult to distinguish between those individuals involved in illicit activities and those legitimate users of the Internet who, for example, consume high volumes of bandwidth as a result of downloading broadband TV content from services such as the BBC's iPlayer.

  • Illegal file sharers are likely to develop more sophisticated ways of distributing and sharing copyrighted material to escape being caught, for example, through using unsecured Wi-Fi hotspots or encrypting emails passing over ISPs' networks to prevent them from monitoring their content.

D. Collapse of smaller ISPs

  • ISPs could be forced to spend millions of pounds developing technology and installing new equipment to implement any technical measures agreed between ISPs and rights holders or required by legislation. In the absence of any form of financial support from either the music and film industries or the Government, it is possible that many of the UK's smaller ISPs will go insolvent in complying with such requirements.


Although most stakeholders consider that, to a greater or lesser extent, ISPs should be responsible for discouraging illegal activities carried on over the Internet, arguably the cost and responsibility of actually investing in, developing and implementing technical measures which seek to fight online piracy should not be borne solely by the ISPs themselves. Instead, the cost and responsibility of doing so should be shared across the industry as whole, particularly as ISPs, in their (current) role as intermediaries, have no control over the content of the material that third parties pass over their networks.

It would be sensible for the Government to better understand from a technical perspective, how workable and effective any proposed solutions to fight on-line piracy are before introducing any legislation. In particular, the Government could oversee a cost-benefit analysis comprising an assessment of how much it would cost ISPs to develop and implement effective technical measures to curb illegal file sharing, for comparison with the predicted benefit of enhanced revenues for the rights holders themselves.

The British Government at least has the benefit of being able to draw upon the experience of the French prior to deciding how to implement any legislation of its own.

April 2009 could be an important milestone for both the UK's entertainment sector and ISPs.

Useful URLs


1. The Strategy Paper was released by the Department for Culture, Media and Sport on 22 February 2008

2 Commitment 15 of the Strategy Paper, page 51

3 Figures taken from the Irish Times, article "Eircom taken to Court over illegal music downloads", dated 10 March 2008

4 Strategy Paper, Page 51, Paragraph 5.11. Figures taken from independent research carried out for the British Video Association: IPSOS Piracy Study 2006

5 Joint Press release 017/08, DCMS/BERR/DIUS, 22 February 2008

6 Strategy Paper, Forward, page 4

7 The 2006 Gowers Report on Intellectual Property in the UK first recommended that some form of Government regulation should be drafted if ISPs and content owners are not able to voluntarily agree on a system to curtail illicit downloads (Recommendation 39 of the Gowers Report on Intellectual Property 2006, page 103)

8 The fine that magistrates can currently impose on "pirates" is currently limited to £5,000

9 "Fake Free London" is one such campaign which hopes to make London free from counterfeit products by the time of the 2012 Olympic Games. The UK Intellectual Property Office will be piloting a project across key authorities, including all Olympic Boroughs. Findings from the pilot could provide a model for a much wider roll-out across London and in other cities

10 Including, by pumping plenty of money into special schools focusing on arts and music, developing five new "centres of excellence" in various arts; making sure there are at least 5,000 apprentice positions in the creative industries by 2013; and ensuring that all children will get access to 5 hours of "culture" (i.e. art, music, theatre, dance lessons) a week

11 It appears that the approach adopted by the French Government in relation to assigning liability to intermediaries has been extended by the French Courts to online auctioneers. For example, Hermes and LVMH have both, within the past month or so, successfully brought actions against eBay in France for permitting counterfeit products to be sold on its Internet auction site. eBay was fined €20,000 and €40,000, respectively, by the French Courts. The verdict in these cases is likely to result in a flood of similar cases being brought against eBay and similar online auction sites by other manufacturers in the luxury goods market and could seriously threaten their business models

12 "Government piles file sharing pressure on UK ISPs", an article from the, dated 8 January 2008 by Chris Williams

13 Sections 17-19 of the E-Commerce (EC Directive) Regulations 2002

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.