Upholds all contest provisions except the one requiring ISPs to pay 25% of the costs for the notification appeals process. Admits the Act could have a “chilling” effect on public Wi-Fi connections, but expects that Ofcom will devise a policy that “works fairly and reasonably.” As for individuals who share their Internet connections, copyright holders will still have to prove that they “authorized” the infringement.
The UK’s Digital Economy Act received a big boost yesterday with Mr Justice Kenneth Parker of the High Court dismissing four of the five challenges they made to some of the Act’s more controversial provisions.
“The DEA proceeds on the premise, first, that a significant number of infringers do not at the moment fully appreciate that what they are doing seriously infringes the legal and moral rights of others and that, although individual behavior of this kind may seem trivial and excusable, the general effect may well be very damaging to the creative industries, a notorious example of what is sometimes called the tyranny of small decisions that have ruinous economic consequences,” writes Justice Parker in his ruling.
The ISPs first asked for a Judicial Review of the DEA last July, which the High Court then agreed to late late last year. It began and ended last month, and Parker’s decision came much sooner than anyone had expected.
The five grounds of challenge include:
1.The provisions constitute a technical regulation and/or a rule on services within the meaning of the Technical Standards Directive. The provisions, it is said, should have been notified to the EU Commission in draft, but were not. The provisions are accordingly unenforceable.
2.They are incompatible with certain provisions of the Electronic Commerce Directive.
3.They are incompatible with certain provisions of the Privacy and Electronic Communications Directive.
4. They are disproportionate in their impact on ISPs, consumers, business subscribers and public intermediaries.
5. They infringe the Authorization Directive of the European Parliament.
Only the concern of a “disproportionate impact on ISPs” was upheld in part. The Department for Business, Innovation and Skills split the the costs for enforcing the Digital Economy Act between rights holders and ISPs at a ratio of 75:25 respectively. Parker ruled that ISPs will now no longer have to pay the costs associated with the appeals process of infringement allegations since they are not “administrative costs” as defined by Article 12 of the DEA. They will, however still have to pay 25% of the “administrative costs” for maintaining the mass notification regime.
Justice Parker also brushes aside concerns that DEA detection methods are largely ineffective anyways, finding that it would still inflict “fear” in the hearts of infringers.
“Furthermore, insofar as the contested provisions improve the efficiency and effectiveness of copyright protection (see above), the risks attached to persistent infringing are raised: even if the selfish, determined infringer were minded to seek to evade detection, he might not be sure that technical means existed or were being developed to thwart him, and he might fear that, if he was detected, the new arrangements would be more likely to expose him to painful enforcement measures,” he adds.
Justice Parker admits the difficulty in predicting what the effects of the DEA will be, but says its provisions will nonetheless “have [a] positive effect.”
Probably the most poignant observation he makes is that the DEA could have a “chilling” effect on open Wi-Fi connections.
Critics point out that operators like libraries and Internet cafes could receive infringement notices, and therefore potentially face legal proceedings if the practice wasn’t halted. At the opposite end of the spectrum, they could also take “prophylactic measures that in fact go significantly beyond what is necessary to protect them from legal liability and so unnecessarily curtail the rights and freedoms of others.”
Justice Parker acknowledges this concern is “genuine,” and there is a “risk of some chilling effect” on public Wi-Fi, but says its difficult to “assess, at this stage, the likely magnitude of such an effect.” Without the measures having had a chance to take effect there is no way to determine what the results will be. He expects that whatever code of practice Ofcom devises it “will deal explicitly with the position of such subscribers as libraries and internet cafés so that the regulation works fairly and reasonably.”
Another potentially “chilling” effect on Internet access is that home Internet subscribers might become reluctant to share their connections with other members of the household lest they risk losing their connection or face fines for repeat infringement offenses. Justice Parker says that copyright holders would still “have the burden of showing, in any subsequent civil action, that the subscriber had ‘authorised’ the infringement.” He calls this a “relatively high test.”
A spokesperson for the Dept for Culture, Media, and Sport said govt was “pleased” with the decision, and plans to move forward with implementing the DEA.
“We are pleased that the Court has recognized these measures as both lawful and proportionate,” said the spokesperson. “The Government remains committed to tackling online piracy and so will set out the next steps for implementation of the Digital Economy Act shortly.”
Also pleased was the Federation Against Software Theft (FAST) which found it “staggering” there was a Judicial Review in the first place. It said the ISPs were just concerned about being “hit financially” by having to pay for the costs of maintaining the DEA, and potentially disconnecting loyal customers (guess nobody’s told him customers are the ones who’ll pay the costs in the form of higher monthly bills).
“The ISP’s challenged the Act on the grounds of ‘basic rights and freedoms’ and that the legislation did not receive sufficient scrutiny in the wash-up period before the General Election. The review led in turn to rights’ holders being blocked from using the anti piracy provisions of the DEA. However this decision has recognized that the measures in the Act are acceptable and we must welcome that decision,” stated FAST General Counsel, Julian Heathcote-Hobbins.
British Phonographic Industry Chief Executive, Geoff Taylor, had equally perplexing sentiments for the ruling. He said that “shareholders and customers of BT and TalkTalk might ask why so much time and money has been spent challenging the act to help reduce the illegal traffic on their networks,” and seems to be unaware that they are the ones who’ll be asked to pay much more when it comes to implementing and maintaining the mass notification regime called for by the DEA.
Curious still is his own admission last December that 58% of illegal downloaders use Google to find free music. He said the the use of cyberlockers and unauthorized MP3 pay sites is “rising alarmingly.” Both would be untouched by current anti-P2P detection methods, though the DEA would require ISPs to block access to “online locations” if a “substantial portion” of that location infringes copyright. Ofcom is currently trying to determine if site blocking is even “possible.”
There’s also the sticky matter of two consecutive years of rising profits.
BT And Talk have already vowed to appeal.