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European E-Commerce & Telecommunications Law, June 1 & 4, 2012 1 European E-Commerce & Telecommunications Law Lukas Feiler, Ph.D., SSCP Associate, Wolf Theiss Attorneys at Law
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E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

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Page 1: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 1

European E-Commerce & Telecommunications Law

Lukas Feiler, Ph.D., SSCPAssociate, Wolf Theiss Attorneys at Law

Page 2: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 2

European E-Commerce Law• Information requirements• Unsolicited commercial communication

(Spam)• ISP Liability

European Telecommunications Law• Telecommunications 101• Regulatory authorities• Data protection & the Data Retention Directive• Market regulation• Net neutrality

Page 3: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 3

European E-Commerce Law• Harmonization by directives (no regulations)

– Regulation: is binding in its entirety and directly applicable in all Member States

– Directive: binding upon each Member State & shall leave to the national authorities the choice of form and methods

• E-Commerce Directive (2000/31/EC)– Information requirements– Unsolicited commercial communication– ISP Liability

• Distance Selling Directive (97/7/EC)– Unsolicited commercial communication– Contract law

Page 4: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 4

Scope of the E-Commerce Directive• Covers all “information society services”

– any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services

Page 5: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 5

Scope of the E-Commerce Directive• Examples

– A digital TV broadcasting station?• not at the individual request of a recipient

– A free blog that sells no advertisements?• Not provided for remuneration

– A company’s website which is only offered for marketing purposes?• Yes, also considered as “normally provided for

remuneration” as it advertises commercial services– An online retailer?

• yes

Page 6: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 6

Information Requirements under theE-Commerce Directive• The following information has to be easily, directly and

permanently accessible:– name of the service provider– geographic address at which the service provider is

established– Contact details, that allow direct and effective

communication, “including” the provider’s e-mail address

– trade register in which the service provider is entered and his registration number• e.g. number in a commercial register

Page 7: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 7

Information Requirements under theE-Commerce Directive #2• The following information has to be easily, directly and

permanently accessible (cont’d):– Information about the supervisory authority (if any)– VAT identification number– if the provider is a member of a regulated profession

• professional body with which it is registered• professional title and Member State where granted• reference to the applicable professional rules

• Easily, directly, and permanently accessible– e.g. a link at the bottom of each page, named “About”

or “Imprint”

Page 8: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 8

Information Requirements under theE-Commerce Directive #3• Additional information requirements if contracts can be

concluded electronically:– technical steps to follow to conclude the contract– whether concluded contract will be accessible– technical means for identifying & correcting input errors– languages offered for the conclusion of the contract– relevant codes of conduct to which the provider

subscribed– Contract terms and general conditions

• It must be possible to store and reproduce them

Page 9: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 9

Unsolicited Commercial Communication (UCC/Spam)• What is Spam?

– spiced ham– How UCC became spam …

• How can a user consent to receiving UCC?– Opt-in: UCC may only be sent if prior consent was

given– Opt-out: UCC may be sent until (implicit) consent is

revoked– General opt-out: “black list” of addresses that do not

wish to receive any spam

Page 10: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 10

Unsolicited Commercial Communication (UCC/Spam)• E-Commerce Directive art. 7

– Email-Spam has to be clearly and unambiguously identifiable as such

– General opt-out for email-spam: natural persons may register themselves in an opt-out register that service providers have to consult regularly

• Distance Selling Directive art. 9– Opt-in for automatic calling machines & fax: prior

consent needed– Opt-out for all other means of individual communication

(incl. email)

Page 11: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 11

Unsolicited Commercial Communication – Summary

Email Fax & automated calling machines

Others (e.g. Facebookmessages)

Opt-in Distance Selling Directive art. 9(1)

Opt-out Distance Selling Directive art. 9(2)

Distance Selling Directive art. 9(2)

General opt-out E-Commerce Directive art. 7(2)

Page 12: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 12

Spamming under U.S. Law• CAN-SPAM Act of 2003, 15 U.S.C. § 7701 et seq.

– Individual opt-out• Spammers have to honor opt-out request within 10

business days. 15 U.S.C.§ 7704(a)(4).– General opt-out

• CAN-SPAM Act called for the FTC to establish a Do-Not-E-Mail registry

• However, in 2004, the FTC decided not to implement the registry, arguing that any opt-out list would be abused by spammers

is that a valid argument?

Page 13: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 13

Liability of Internet Service Providers under EU Law• The E-Commerce Directive provides exemptions from

liability for– Internet access services (mere conduit)– Caching services– Hosting servicesThe exemptions apply to all areas of the law, including intellectual

property law

Page 14: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 14

Liability Exemption for Internet Access Providers• An Internet access provider is not liable for the

information transmitted if it (E-Commerce Directive art. 12)– does not initiate the transmission;– does not select the receiver of the transmission; and– does not select or modify the information contained in the

transmission.• Result: No liability even if Internet access provider has actual

knowledge of infringing content

Page 15: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 15

Liability Exemption for CachingProviders• A caching provider is not liable for the information

temporarily stored if it (E-Commerce Directive art. 13)– does not modify the information;– complies with conditions on access to the information– complies with common rules on updating of the information– does not interfere with the lawful use of technology commonly

used to obtain data on the use of the information;– expeditiously removes information upon obtaining actual

knowledge of the fact that the information at the initial sourceof the transmission has been removed

• Result: No liability even if caching provider has actual knowledge of infringing content

Page 16: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 16

Liability Exemption for HostingProviders• A hosting provider is not liable for the information

stored if it (E-Commerce Directive art. 14)– is not aware of facts or circumstances from which the illegal

information is apparent; or– upon obtaining such awareness acts expeditiously to remove

or to disable access to the information

• Result: Notice and take-down regime

Page 17: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17

Liability Exemptions for ISPs underU.S. law• Communications Decency Act § 502, codified at

47 U.S.C. § 230– Covers all “interactive computer service providers”– no liability, even if knowledge of the information in question

(Zeran v. Am. Online, Inc., 129 F.3d 327 (4th Cir. 1997))– does not apply with regard to “any law pertaining to intellectual

property”• Coypright Act § 512 – similar to the E-Commerce Directive but

– Hosting provider: “willful blindness” may constitute knowledge (Viacom Int'l, Inc. v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012))

– No safe harbor for vicarious liability (right and ability to supervise & direct financial interest)

Page 18: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 18

Injunctions Against ISPs• E-Commerce Directive art. 12(3), 13(2), and 14(3) all

state that the liability exemptions– shall not affect the possibility for a court or administrative

authority, in accordance with Member States’ legal systems, of requiring the service provider to terminate or prevent an infringement

• Injunctive relief is therefore available against ISPs

Page 19: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 19

Website Blocking Injunctions underEU Copyright Law• Copyright Directive (2001/29/EC) art. 8(3) provides

– Member States shall ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right.

– Case C-324/09, L’Oréal SA v. eBay: injunctions are not limited to measures which contribute to bringing infringements to an end but may also cover measures which contribute to preventing further infringements of that kind.

Page 20: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 20

Website Blocking Injunctions underEU Copyright Law – Possible Issues• Are Internet access providers “intermediaries”?

– Case C-557/07, LSG v. Tele2: Yes!• Are the Internet access services “used by a third party

to infringe a copyright”?

Who uses and who infringes?

Page 21: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 21

Website Blocking Injunctions underEU Copyright Law – ECJ Case Law• Case C-70/10, Scarlet Extended v. SABAM: injunction

that requires active monitoring of all data relating to each customer would violate the fundamental rights– of the ISP concerned to conduct its business;– of users to receive or impart information; and– of users to protection of personal data

• Is a website blocking injunction a similarly severe interference with fundamental rights?

Page 22: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 22

How to Implement Website Blocking Injunctions• Three basic possibilities

– DNS blocking– IP blocking– Proxy

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European E-Commerce & Telecommunications Law, June 1 & 4, 2012 23

Implementing Website Blocking Injunctions – DNS Blocking• The access provider‘s DNS

server has to be reconfigured• Possible circumvention

– For users:• alternative DNS server• use IP address

– For website operators• Choose different domain

Page 24: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

IP blocking via remote-triggered black hole filtering1. Configure a static route to

Null0 Interface on all Edge Routers(e.g. for 192.0.2.0/24)

2. At the Triggering Router:configure e.g. 192.0.2.1as next hop for the IPaddress to be blocked

3. Distribution of the routinginformation to all Edge Routersvia iBGP

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 24

Implementing Website Blocking Injunctions – IP Blocking

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European E-Commerce & Telecommunications Law, June 1 & 4, 2012 25

Implementing Website Blocking Injunctions – IP Blocking #2• Costs for the Internet access provider

– One-time costs: configuring the edge routers (if not already)

– Adding a route at the Triggering Router• Possible circumvention

– For users:• Directing all traffic via a proxy server

– For website operators:• Changing their IP address

• Overbreadth– One IP address may be used to host multiple

unrelated websites

Page 26: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 26

Implementing Website Blocking Injunctions – Proxy• All traffic is routed over

a proxy server– It can perform filtering

base on URLs orcontent

– Problem: encryption• Costs for access provider

– Very high• Possible circumvention

– For users similar toIP blocking

Page 27: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 27

Proportionality of Website Blocking Injunctions revisited• Proportionality of the measure to

– the ISP‘s fundamental right to conduct its business• cost vs. benefit

– the users’ fundamental right to protection of personal data• Differences between IP/DNS blocking and proxy-based

blocking– the users’ fundamental right to receive or impart information

• IP blocking vs. DNS blocking

Page 28: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 28

Website Blocking Injunctions underEU Copyright Law – Nat‘l Case Law• Netherlands: BREIN v. UPC, District Court of The Hague, May 10,

2012, case No. 413085: injunction issued (The Pirate Bay)

• U.K.: Dramatico Entertainment v. British Sky Broadcasting, High Court, May 2, 2012, [2012] EWHC 1152 (Ch.): injunction issued(The Pirate Bay)

• Austria: Constantin Film v. UPC, Superior Regional Court, Nov. 14, 2011, docket No. 1 R 153/11v: injunction issued (www.kino.to)

• Finland: IFPI Finland v. Elisa Corp., Helsinki District Court, Oct. 26, 2011, docket No. H 11/20937: injunction issued (The Pirate Bay)

• Belgium: VZW v. NV Telenet, Andwerpen Court of Appeal, Sept. 26, 2011, docket No. 2011/8314: injunction issued (The Pirate Bay)

Page 29: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 29

Website Blocking Injunctions underEU Copyright Law – Nat‘l Case Law• U.K.: Twentieth Century Fox Film Corp. v. BT, High Court, July 28,

2011, [2011] EWHC 1981 (Ch.): injunction issued (newzbin.com)

• Denmark: Telenor v. IFPI Denmark, Danish Supreme Court, May 27, 2010, docket No. 153/2009: injunction issued (thepiratebay.org)

• Italy: Bergamo Public Prosecutor's Officer v. Kolmisappi, Italian Supreme Court of Cessation, Sept. 29, 2009, n.49437/09: injunction issued (thepiratebay.org)

• Denmark: IFPI Denmark v. Tele2, City Court of Copenhagen, Oct. 25, 2006, docket No. F1-15124/2006: injunction issued (AllOfMP3.com)

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European E-Commerce & Telecommunications Law, June 1 & 4, 2012 30

Website Blocking Injunctions underEU Copyright Law – Nat‘l Case LawIn the following cases an injunction was denied because

Copyright Directive art. 8(3) had not been transposed into national law:

• Germany: EMI v. Hansenet, Regional Court Cologne, Aug. 31, 2011, docket No. 28 O 362/10

• Norway: Nordic Records Norway v. Telenor, Court of Appeal, Feb. 9, 2010, docket No. 10-006542ASK-BORG/04

• Ireland: EMI Records v. UPC, Irish High Court, Oct. 11, 2010, [2010] IEHC 377

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European E-Commerce & Telecommunications Law, June 1 & 4, 2012 31

Website Blocking Injunctions underEU Copyright Law – Nat‘l Case LawInjunctions issued• Austria• Belgium• Denmark• Finland• Italy• Netherlands• U.K.

Injunctions denied• Germany• Ireland• Norway (Non-EU-MS)

Page 32: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 32

Website Blocking Injunctions underU.S. LawU.S. Copyright Act § 512(j)(1)(B)(ii): A court may grant

injunctive relief in the following form:• An order restraining the service provider from providing access, by

taking reasonable steps specified in the order to block access, to a specific, identified, online location outside the United States.

• So far, only a single case: Arista Records, Inc. v. AT&T Broadband Corp., No. 1:02CV06554, 2002 WL 34593743 (S.D.N.Y. Aug. 16, 2002)

– Plaintiffs sought an injunction against Internet backbone operators to block the Chinese website Listen4Ever

– Complaint was voluntarily withdrawn

Page 33: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 33

European Telecommunications Law

• Telecommunications 101

• Regulatory authorities

• Data protection & traffic data retention

• Market regulation

• Net neutrality

Page 34: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 34

The History of Telecommunications in the EU• Telecommunications providers were typically state-

owned monopolies until the 1990sOne operator per country until 1990sWas it any different from the situation in the U.S.?

• Regulation was deemed necessary to create competition

• Today, multiple telecommunications providers operate in each Member State.

• However: prices for telecommunications services differ greatly from one Member State to another

Page 35: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 35

Market Comparison: Prices of Mobile Voice Communication Per Minute

Source: European Commission, Progress Report on the Single European Electronic Communications Market 2009, COM (2010) 253 final

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European E-Commerce & Telecommunications Law, June 1 & 4, 2012 36

The EU Regulatory Framework forTelecommunication• Framework Directive (2002/21/EC): regulatory authorities and

general matters• ePrivacy Directive (2002/58/EC): privacy issues• Universial Service Directive (2002/22/EC): mandatory quality of

service• Authorisation Directive (2002/20/EC): rules for the authorization of

the provision of communications networks• Access Directive (2002/19/EC): rules for the sharing of

telecommunications facilities• Data Retention Directive (2006/24/EC): traffic data retention• BEREC Regulation (Reg. No 1211/2009): establishing the Body of

European Regulators for Electronic Communications

Page 37: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 37

Telecommunication Defined• Electronic communications service (Framework Directive

art. 2(c))– a service normally provided for remuneration which consists

wholly or mainly in the conveyance of signals on electronic communications networks

– exclud[ing] services providing, or exercising editorial control over, content

• Electronic communications network (Framework Directive art. 2(a))– transmission systems and, where applicable, switching or routing

equipment and other resources […] which permit the conveyance of signals by wire, radio, optical or other electromagnetic means

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European E-Commerce & Telecommunications Law, June 1 & 4, 2012 38

Examples of Electronic Communications Services?• A WiFi hotspot you operate at home (configured for

public access)?– Not normally provided for remuneration

• A mail service (e.g. Gmail)?– Does not consist wholly or mainly in the conveyance of signals

Page 39: E-Commerce and Telecommunications Law - Lukas Feiler · • Result: Notice and take-down regime. European E-Commerce & Telecommunications Law, June 1 & 4, 2012 17 Liability Exemptions

European E-Commerce & Telecommunications Law, June 1 & 4, 2012 39

Examples of Electronic Communications Services?• A news website (e.g. nytimes.com)?

– Services that exercise editorial control over content are excluded• Voice over IP (VoIP) services?

– Only if the VoIP service allows calls from or to the publicswitched telephone network

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European E-Commerce & Telecommunications Law, June 1 & 4, 2012 40

Regulatory Authorities• National regulatory authorities (Framework Directive art. 3 et seq.)

– Of primary importance for operators– Independent from regulated entities– Structural separation from rest of government if Member State

retains partial ownership in an operator• European Commission

– Can issue binding opinions to national regulatory authorities inthe area of market regulation

• BEREC (Body of European Regulators for Electronic Communications)– Advisory role vis-à-vis the European Commission & national

regulatory authorities

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European E-Commerce & Telecommunications Law, June 1 & 4, 2012 41

Regulatory Authorities #2• European Network and Information Security Agency (ENISA)

– Non-regulatory agency– Only advises the European Commission

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European E-Commerce & Telecommunications Law, June 1 & 4, 2012 42

Data Protection – Confidentiality of Communications• Governed by the ePrivacy Directive

– More specific than general Data Protection Directive (95/46/EC)• Confidentiality of communications (ePrivacy Directive art. 5)

– Covers all communications and related traffic data– all traffic data has to be deleted once it is not needed anymore

for billing purposes– Confidentiality has to be maintained unless the end-user has

freely given his specific and informed consent

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European E-Commerce & Telecommunications Law, June 1 & 4, 2012 43

Confidentiality of Communications –Example• In 2007, British Telecom (BT) used a software known as “Phorm” to

monitor the web surfing behavior of its end-users in order to deliver personalized advertisements– Users were asked to “opt in” by declaring that they wanted to

participate in a trial that would increase their bandwidth

Monitoring violates the confidentiality of communications“informed” consent necessary but none given

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European E-Commerce & Telecommunications Law, June 1 & 4, 2012 44

The Data Retention Directive(2006/24/EC)• Basic idea: to retain, for at least 6 months, who communicated with

whom when and from where• Timeline

– Madrid train bombings in 2004 and London bombings in 2005– Data Retention Directive was adopted on March 15, 2006– To be transposed into national law until Sept. 15, 2007; as

regards Internet traffic data until March 15, 2009– Multiple Member States transposed the Directive only after

infringement proceedings were initiated by the Commission– Germany has still not transposed the Directive

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European E-Commerce & Telecommunications Law, June 1 & 4, 2012 45

Traffic Data to be Retained• General principles

– Concerns only traffic and location data, not the contents of communication

– Concerns only data already generated or processed by operators (e.g. no obligation to collect the names and addresses of previously anonymous customers)

– Data has to be retained for at least 6 months but no more than 2years

– Purpose: investigation, detection and prosecution of serious crime, as defined by each Member State in its national law

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Traffic Data to be Retained – Scopeof Covered Fields• Data only has to be retained with regard to the following services:

1) Fixed network telephony2) Mobile telephony3) Internet access4) Internet e-mail5) Internet telephony

• Everything else is not covered!– e.g. hosting providers &

website operators– Why do you think, that is?

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European E-Commerce & Telecommunications Law, June 1 & 4, 2012 47

Traffic Data to be Retained• For fixed network telephony & mobile telephony (incl. text

messages)– telephone number, name, and address of both parties– date and time of the start and end of the communication– type of telephone service used (e.g. text message)– Plus, for mobile telephony:

• International Mobile Subscriber Identity (IMSI)• International Mobile Equipment Identity (IMEI)• Cell ID at the start of the communication• In case of pre-paid anonymous mobile telephony

services:– Date, time & cell ID of initial activation

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Traffic Data to be Retained #2• For Internet access services

– allocated IP address– name and address of the subscriber– user ID(s)– in case of dial-up access: calling telephone number– date and time of the log-in and log-off– DSL or other end point on the user's side– in the case of mobile Internet access

• cell ID when Internet connection is established

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Traffic Data to be Retained #3• Internet e-mail service

– the sender's and the recipient's• names, and addresses• e-mail addresses• telephone numbers in case of dial-up access• DSL or other end points

– date and time of the log-in and log-off of the Internet e-mail service

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Traffic Data to be Retained #4• Internet telephony (VoIP)

– both parties’• VoIP addresses• names and addresses• telephone number (in case of VoIP-to-PSTN or if a dial-up

Internet access is used)• DSL or other end points on either user's side

– date and time of the log-in and log-off of the Internet telephony service

– If a mobile device is used: cell ID at the start of the communication

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Who Has to Retain Traffic Data?• Providers of publicly available electronic communications services

– i.e. operators selling their services to end-user• Providers of public communications networks

– i.e. providers who rent out their infrastructure to service providers– Such as Internet backbone operators

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Who Has to Retain Traffic Data? -Examples• A WiFi hotspot somebody operates from his or her home?

– No; not normally provided for remuneration not a provider of a public communications service

• Gmail, Hotmail, GMX, Facebook?– No; no service that consists wholly or mainly in the conveyance

of signals not providers of public communications services• An Internet access provider

– yes• A company that operates its own mail server for business purposes

(e.g. a law firm)?– No; not a public service

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Access to Retained Data• Access by law enforcement agencies

– The data is retained for the investigation, detection, and prosecution of “serious crime,” as defined by each Member State in its national law

each Member State regulates access to retained data differently

• Access by private entities (e.g. copyright holders)– Outside the scope of the Data Retention Directive but may be

provided for by a Member State (Case C-461/10, Bonnier Audio v Perfect Communication Sweden, Apr. 19, 2012)

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Who has to pay for it?• Each Member State can decide whether network and service

providers can (partly) recover their expenses• Result: Distortion of competition between operators established in

different Member States

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Circumvention MeasuresHow can (and, in fact, do) people prevent the retention of their data?• Telephony

– Use of telephone booths and prepaid mobile phones• Internet access

– Use of a public WiFi access point• E-mail services

– Use of a mail service provider that is itself not a provider of a public communications service or network (e.g. Gmail)

– Plus: communicate only via encrypted mail protocols• Use of any messaging service other than e-mail

– Facebook messages, Usenet, IRC, instant messaging software, …

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Effectiveness of Data RetentionHow does retained traffic data help us to investigate,

detect, and prosecute crime?• Investigate/prosecute

– Dynamic IP addresses are no longer anonymous– It can be determined who was at the scene of the crime

• Video example of geo-tracking– Accomplices may be identified more easily (if they were not

smart enough)• Detect

– traffic analysis, social network analysis, and data mining

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Effectiveness of Data Retention #2Why data mining does not help in the fight against terror:• Assumption

– data mining system has accuracy of 99%– there are 100 real terrorists in the EU’s population of 500 million

• What is the probability that a person identified as a terrorist is, in fact, a terrorist?

– Not 99% but 0.002% (= 1 in 50,000)– Known as the “base rate fallacy”

• The prior probability (base rate) is 100 to 500 million• System correctly identifies 99% of the terrorists = 99• System incorrectly identifies 1% of the 500 million = 5 million

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Proportionality of the Data Retention Directive?• Does the

– government‘s interest to retain traffic and location data for the purpose of the investigation, detection, and prosecution of crimeoutweighthe citizens’ interest in their privacy?

• To consider– How severe is the interference with the fundamental right to

privacy?– How effective is the data retention?

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Future Developments in the Area of Data Retention• Legal challenge by Digital Rights Ireland before the ECJ

– Compliance with the EU Charter of Fundamental Rights?• The European Commission has announced plans to revise the

Directive

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Market Regulation• Traditional competition law (anti-trust law)

– Prohibition of cartels (concerted practices)– Merger control– Abuse of dominant market position

Legal consequences only if dominant position is abusedex post market regulation

• Ex ante market regulation in telecommunications law– Dominant market position in itself creates legal consequences

intended to prevent an abuse before it even happens (ex ante)

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Ex Ante Market Regulation• If an operator has significant market power

– National Regulatory Authority (NRO) has to impose appropriate obligations (Access Directive art. 8 et seq.)• Non-discrimination in relation to interconnection and/or

access (art. 10)• Accounting separation – to make cross-subsidization

transparent (art. 11)• Permitting other operators to use network facilities (art. 12)• Price control (art. 13)• …

– If these measures fail to achieve effective competition• Disintegration of vertically integrated operators

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Ex Ante Market Regulation –Who Has Significant Market Power?• Step 1: NRAs have to define the relevant market

(Framework Directive art. 15)– European Commission adopted a Recommendation on Relevant

Product and Service Markets– Consultation procedure: Commission has veto-power if NRAs do

not follow the Recommendation• Step 2: NRAs have to perform a market analysis

(Framework Directive art. 14, 16)– significant market power: operator enjoys a position of economic

strength affording it the power to behave independently of competitors, customers and ultimately consumers

– NRA determination is subject to the Commission’s veto-power

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Net Neutrality• What is Net Neutrality?

– The principle that all electronic communication passing through a network is treated equally, i.e. independent of1) content;2) application;3) service;4) device;5) sender address; and 6) receiver address.

– Not covered: Offering different bandwidths to users, depending on how much they pay per month (no discrimination of content but of users)

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Examples of Interferences with Net Neutrality• Peer-to-peer (P2P) downloads are slowed down

• An Internet access provider blocks services that are in competition with its own services – e.g. blocking Skype for mobile phones

• VoIP is given a higher priority to ensure a high voice quality

• An Internet access provider only permits one service for a specific type of content – e.g. only allows Netflix but no other video-on-demand provider

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Net Neutrality – Possible Business Models• Price differentiation between content providers (option #1)

– Faster data transfer to the access provider‘s customers in exchange for special compensation

– Data transfer to the customers only in exchange for compensation (e.g. exclusivity agreements)

• Price differentiation between subscribers (option #2)– Only those who pay more get access to all services/websites– Those who pay less do not get access to, e.g., social networking

websites or Skype

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Does Net Neutrality Matter?

• The economic argument: Net Neutrality enables innovation (end-to-end principle)

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access provider

content producers

content consumers

Does Net Neutrality Matter?

• The political argument: Net Neutrality enables decentralized, non-market-based production of ideas & content

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Net Neutrality under EU Law –Competition Law• Prohibition of the abuse of a dominant market position

(Art 102 TFEU)– Operators that have a dominant market position are in particular

prohibited from discriminating trading parties– It would thus be prohibited if such operators …

• charged different content providers different prices without an objective justification

• blocked content providers or services (e.g. Skype) in order to give their own services a competitive advantage (e.g. their own mobile phone service)

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Net Neutrality under EU Law –Contract Law• The law of service contracts is not harmonized in the EU• However, the principles of the Consumer Sales Directive

(1999/44/EC) apply in many Member States– Generally, goods/services are only in conformity with the contract

if they meet typical & reasonable consumer expectations– If the service is not in conformity with the contract, the consumer

has the right• to have the service brought into conformity free of charge;• to have the price reduced appropriately; or• to rescind the contract.

In many Member States, operators may only limit Net Neutrality if the contract explicitly allows them to do so

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Net Neutrality under EU Law –Transparency• Transparency is a precondition for competition• Information requirements under Universal Service

Directive art. 20– Mandatory disclosure of any procedures put in place by the

operator to “measure and shape traffic”

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Net Neutrality under EU Law – Loss of Liability Limitations• E-Commerce Directive art. 12: An Internet access

provider is not liable for the information transmitted if it– does not initiate the transmission;– does not select the receiver of the transmission; and– does not select or modify the information contained in the

transmission.• What if an access provider only allows specifically selected content

providers access to its customers (white list)?• What if an access provider allows all access to its customers except

certain few (black list)?

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Net Neutrality under U.S. law – A Brief Comparison• FCC Open Internet Rules

(76 Fed. Reg. 15,192 (Sept. 23, 2011) codified at 47 C.F.R. pt. 8)– Transparency

• All broadband providers have to disclose network management practices

– No blocking• Fixed broadband: no blocking whatsoever• Mobile broadband:

– No blocking of lawful websites– No blocking of applications that compete with own

services [does not apply to app stores]– No unreasonable discrimination: only applies to fixed broadband

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Thank you!

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Contact Details

Lukas Feiler, Ph.D., SSCP

Wolf Theiss Attorneys at LawSchubertring 6, 1010 Vienna

Tel: (+ 43 1) 515 10 5090Fax: (+ 43 1) 515 10 665090

e-mail: [email protected]

www.wolftheiss.com

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Recommended ReadingGeneral Reading on Telecommunications• Tim Wu, The Master Switch (2011)Data Retention• Lukas Feiler, The Legality of the Data Retention Directive in Light of the

Fundamental Rights to Privacy and Data Protection, European Journal of Law and Technology, Vol. 1, No. 3 (2010), http://ejlt.org/article/view/29/75

Net Neutrality• Lawrence Lessig, The Future of Ideas (2001) p. 26-48• Yochai Benkler, The Wealth of Networks (2006) p. 99-106, 460-473• Barbara Van Schewick, Internet Architecture and Innovation (2010)Website Blocking Injunctions• Jack Goldsmith & Tim Wu, Who Controls the Internet? (2006) • Lukas Feiler, Website Blocking Injunctions under EU and U.S. Copyright Law

(2012), TTLF Working Paper No. 13, http://ttlf.stanford.edu