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Reform of the EU Liability Regime for Online Intermediaries

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Reform of the EU Liability Regime for Online Intermediaries Reform of the EU liability regime for online intermediaries Background on the forthcoming digital services act IN-DEPTH ANALYSIS EPRS | European Parliamentary Research Service Author: Tambiama Madiega Members' Research Service PE 649.404 – May 2020 EN The E-commerce Directive, adopted in 2000, aims at harmonising minimum standards of liability for internet (online) intermediaries across the European Union (EU). Under the current EU legal framework, digital or online platforms are not legally responsible for hosting illegal content, but are required to remove such material once it is flagged. However, technologies and business models have evolved in the last 20 years and the EU liability framework struggles to capture liability issues raised by new actors, such as search engines, social networks and online marketplaces. Furthermore, societal challenges have changed the nature and scale of liability, with the development of a range of new harmful online practices, such as the dissemination of terrorist content online, the increasing use of platforms to distribute counterfeit products and the spreading of false or misleading news and online advertisements. The European Commission has pledged to present a new framework to increase and harmonise the responsibilities of online platforms. New EU legislation is expected in the forthcoming digital services act package, and this will set rules on how companies such as Google, Facebook and Twitter will have to police illegal and possibly harmful content online. Against this background, this paper aims to (1) describe the current EU liability regime for online intermediaries set out under the E-commerce Directive; (2) highlight the implementation gaps that have been identified; and (3) present the main proposals for reforming such an online liability regime and the main policy questions that have been discussed so far. AUTHOR Tambiama Madiega, Members' Research Service, EPRS This paper has been drawn up by the Members' Research Service, within the Directorate-General for Parliamentary Research Services (EPRS) of the Secretariat of the European Parliament. To contact the author, please email: [email protected] LINGUISTIC VERSIONS Original: EN Translations: DE, FR Manuscript completed in April 2020. DISCLAIMER AND COPYRIGHT This document is prepared for, and addressed to, the Members and staff of the European Parliament as background material to assist them in their parliamentary work. The content of the document is the sole responsibility of its author(s) and any opinions expressed herein should not be taken to represent an official position of the Parliament. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the European Parliament is given prior notice and sent a copy. Brussels © European Union, 2020. Photo credits: © Maksim Kabakou / Adobe Stock. PE 649.404 ISBN: 978-92-846-6559-4 DOI:10.2861/08522 QA-04-20-239-EN-N [email protected] http://www.eprs.ep.parl.union.eu (intranet) http://www.europarl.europa.eu/thinktank (internet) http://epthinktank.eu (blog) Reform of the EU liability regime for online intermediaries Executive summary The E-commerce Directive was adopted in 2000, aimed at harmonising minimum standards of liability for internet (online) intermediaries across the EU. The legislation introduced a 'safe harbour' principle, under which online intermediaries who host or transmit content provided by a third party are exempt from liability unless they are aware of the illegality and are not acting adequately to stop it. They are subject to 'duties of care' and 'notice and take down' obligations to remove illegal online content. Furthermore, under the EU liability regime, online intermediaries cannot be subject to a general obligation to monitor their users' online content – to protect users' fundamental rights such as privacy and freedom of expression – while self-regulation has largely been encouraged for removing and disabling access to illegal information. However, numerous studies have shown that the way the E-commerce Directive has been implemented across the EU varies greatly and that national jurisprudence on online liability today remains very fragmented, while European Court of Justice case law does not provide sufficient guidance. Several gaps have been identified in this respect. First, it remains unclear to what extent the new type of online services, such as social media companies that have appeared since the adoption of the E-commerce Directive, fall within the definition of 'information society services' providers that can benefit from the liability exemption. Second, the 'safe harbour' conditions and 'notice-and-take down' obligations are unclear essentially because the underlying notions which are used to trigger the liability exemption, such as the distinction between 'passive' role and 'active' and the meaning of 'illegal activities', lack a proper definition. There are also considerable differences both with regard to the definition and the functioning of notice-and-take down throughout the EU. Third, it is becoming difficult to differentiate between prohibited 'general' content monitoring and acceptable 'specific' content monitoring, while automatic filtering mechanisms are increasingly used to detect illegal content. Against this background, the European Commission is expected to table a proposal to revise the liability regime as part of the forthcoming digital services act. Expert proposals vary from clarifying the current regime of exemption of liabilities to creating a secondary liability regime for online intermediaries. Policy-makers are expected to address a wide range of policy questions. First, an extension of the scope of the EU legislation to encompass both 'illegal' and 'harmful' content has been proposed and the question of whether 'online disinformation' and 'online advertisements' should fall under the scope of the revised liability regime has been raised. Second, setting a robust liability framework relies on defining precise concepts and ensuring compliance with EU fundamental rights, especially with freedom of speech and privacy rights. To that end, academia and stakeholders call for substantial revision of the EU framework, to clarify whether new digital services providers, such as social networks, online advertising services, collaborative economy platforms and online marketplaces, could or could not benefit from the safe harbour regime. This entails a need to clarify the difference between 'active' and 'passive' online intermediaries, to amend and further harmonise the 'notice and take down' regimes, to clarify the use of 'automated filtering' measures and the need for adequate procedural safeguards. Furthermore, the opportunity to enshrine a 'Good Samaritan' clause under EU law, to incentivise online intermediaries to better control the content they host and to include a set of new obligations in the liability regime, as well as to ensure algorithm transparency and neutrality, are discussed. Finally, consideration should be given to the definition of roles and powers granted to digital platform regulators in the EU. I EPRS | European Parliamentary Research Service Table of contents 1. E-commerce Directive liability regime: Background ______________________________ 1 1.1. Liability regime: Aim and scope of the directive __________________________________ 1 1.2. Safe harbour regimes and horizontal approach __________________________________ 1 1.3. Duties of care and notice and take down obligations ______________________________ 2 2. Implementation gaps and calls for reform of the E-commerce Directive______________ 4 2.1. Definition of 'information society service' is unclear _______________________________ 4 2.2. Safe harbour conditions and notice and take down obligations are unclear ____________ 5 2.3. Duty of care regime and prohibition on general monitoring are unclear _______________ 6 3. Revision of the EU liability regime for online intermediaries _______________________ 7 3.1. Context of the forthcoming digital services act ___________________________________ 7 3.2. Proposals for reform: Theoretical framework_____________________________________ 8 3.3. Proposals for reform: Policy questions _________________________________________ 10 3.3.1. Scope of the liability regime ______________________________________________ 10 i. Illegal and potentially harmful content 10 ii. Disinformation and 'fake news' 11 iii. Online advertisement 12 iv. Differentiating liability rules for small and large intermediaries 13 3.3.2. Clarifying safe harbour conditions _________________________________________ 13 i. Definition of information society service providers 13 ii. Difference between 'active' and 'passive' roles 14 iii. Algorithm transparency and neutrality 14 3.3.3. Revisiting the notice and take down regimes _________________________________ 14 3.3.4. Automated filtering measures and general monitoring _________________________ 15 3.3.5. Introduction of a 'Good Samaritan' clause ___________________________________ 17 3.3.6. Roles and powers of regulators ____________________________________________ 18 4. Outlook___________________________________________________________________ 19 5. References ________________________________________________________________ 20 II Reform of the EU liability regime for online intermediaries 1. E-commerce Directive liability regime: Background The key principles of the EU liability regime for online intermediaries are enshrined in the E-commerce
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