On 6 May 2015, the European Commission released its Digital Single Market Strategy for Europe, setting out priorities for the development of the digital economy (see our client alert summarising the proposals here).

One of the proposals relates to online intermediaries and their role in tackling illegal content on the internet. This could ultimately lead to a removal of the 'hosting defence' and saddle internet service providers (ISPs) and other intermediaries (such as social media platforms) with more onerous responsibilities. But could this frustrate the key aims of the Commission's strategy?

The Hosting Defence and its Effect

Under Article 14 of the e-Commerce Directive1, ISPs are not currently liable for content stored by them provided (i) they do not have actual knowledge of illegal activity or information (and are not aware of facts of circumstances from which the illegal activity or information is apparent), and (ii) they act expeditiously to remove the information once they have actual knowledge. In practice, this means that intermediaries often remove content immediately upon receiving notice of a complaint, even if they are not convinced that the complaint is well-founded. To leave the content online risks losing the benefit of the hosting defence in the event that a claim is valid (as the intermediary will be deemed to have actual knowledge of illegal content). As a result, content that is actually legal may be removed without cause.

In recognition of the issue, the Commission announced the following in its strategy document:

"...the Commission will analyse the need for new measures to tackle illegal content on the Internet, with due regard to their impact on the fundamental right to freedom of expression and information, such as rigorous procedures for removing illegal content while avoiding the take down of legal content, and whether to require intermediaries to exercise greater responsibility and due diligence in the way they manage their networks and systems – a duty of care."

The impact that the current system has on free speech and the freedom to run a business online is obvious. Perfectly legal content may be being removed on the basis of spurious or unsupported claims. But is the imposition of further responsibilities for ISPs and other intermediaries really the answer?

A Duty of Care?

Although most ISPs would probably acknowledge that the current notice and takedown system could do with some clarification and improvement, removing the hosting defence altogether and replacing it with a duty of care could suppress the digital economy.

The Commission has not yet been explicit about what a new duty of care on intermediaries might look like, although it is clear that it would involve "greater responsibility and due diligence in the way they manage their networks and systems". Presumably, intermediaries would be required to introduce improved systems for monitoring, assessing and removing illegal content.

When the current E-Commerce Directive was introduced, a general obligation to monitor was rejected2. It was considered unrealistic to expect intermediaries to monitor the vast amounts of content being posted online and the requirement to do so would pose a considerable barrier for new entrants into the market. 15 years on, the amount of online content has increased exponentially, and so such arguments carry even more weight today. 300 hours of video are uploaded to YouTube every minute3, and Facebook users post more than 4.75 billion content items in total per day4. It is very likely impossible for humans to monitor the levels of content involved, and so intermediaries would need to employ automated monitoring technologies. These are costly and may not always be reliable.

In addition to the practical issues associated with the imposition of a duty of care, there are juridical considerations. By requiring intermediaries to take a greater role in assessing the legality of content, they would be taking on the role of a court: a role that they are neither qualified nor resourced to fulfil.

Also, if the true extent of the duty of care is not comprehensively set out in legislation, there is bound to be some uncertainty around its scope. Over time, a body of case law may develop to assist intermediaries in the interpretation of the duty, but this is still unlikely to provide them with the certainty they require to plan their businesses. Further, pursuant to Article 52 of the EU Charter, any restriction on fundamental rights must have "a legal framework which is sufficiently clear to enable both natural and legal persons to regulate their conduct". The doubts over when content might be removed or allowed to remain means this provision is likely to be breached.


Inevitably, as there are so many competing rights in play, it is going to be difficult for the Commission to find a solution that suits everyone. At first blush, requiring intermediaries to accept greater responsibility for unauthorised content sounds like it will be beneficial for IP rightsowners and defenders of privacy rights. It may well lead to increased proactive monitoring and so reduce the amount of illegal content generally. However, rightsowners will be reluctant to lose the ability to have their content removed quickly on notice, and so may well support the status quo. Advocates of free speech and rights to information will be pushing for change in order to reduce the risk of lawful content being removed. Businesses who exploit content online are likely to take the same stance. Intermediaries will strenuously oppose any measures that require them to take on greater responsibilities in terms of monitoring and assessing content.

The Commission will certainly have a tough match on its hands. While it must listen to all stakeholders shouting from the sidelines, it will be vital to heed concerns about overburdening intermediaries. Extra responsibilities could make their businesses less viable and dissuade new entrants to the market, which will ultimately stifle the online marketplace. As the Commission's whole strategy seeks to do the exact opposite, it could end up scoring an own goal.

The Commission's proposals on this issue are due to be made in 2015, so expect consultation on this issue to open soon. The proposals will affect all those who are involved in exploiting content online, including ISPs, IP owners, social media platforms and other online publishers. If you want to make sure your voice is heard, Reed Smith would be happy to assist with responses to the consultation.


1. Directive 2000/31/EC

2. Article 15(1) expressly states that "Member States shall not impose a general obligation on providers, when providing the services covered by Articles 12, 13 and 14, to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity".

3. https://www.youtube.com/yt/press/en-GB/statistics.html

4. "A Focus on Efficiency: A White Paper from Facebook, Ericsson and Qualcomm, September 2013. We have been unable to locate more recent statistics.

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