Wikilegal/SABAM v. Netlog

On February 16, 2012 the highest court in the European Union, the Court of Justice, ruled that social networks and other web hosting providers cannot be required to monitor and filter activities that occur on their sites to prevent copyright infringement. The case, SABAM v. Netlog, firmly establishes that the imposition of such a broad obligation violates EU law as it would place an undue burden on the website and infringe on fundamental rights of the website’s users. The case expands the ruling of an earlier case, SABAM v. Scarlet Extended, in which the same court held that an Internet Service Provider could not be required to adopt a similar monitoring and filtration system on its network.

The plaintiff in this case, SABAM, is the Belgian association of authors, composers, and publishers. SABAM petitioned the court for an injunction against Netlog, a leading European social networking website based in Belgium. Netlog allows its users to create their own webpage that features pictures, videos, and song playlists to share with friends. SABAM sought an injunction to restrain Netlog from making available any of SABAM’s musical or audiovisual works. Netlog objected to this, stating that such an injunction would be tantamount to imposing a general obligation to monitor, which is prohibited by Article 15(1) of EU Electronic Commerce Directive 2000/31.

The Court agreed with Netlog, holding that the requested injunction would violate the Electronic Commerce Directive. The Court stated that the content filtration system required by the injunction would oblige Netlog to “actively monitor almost all data relating to all of its service users.” The Court held that such active monitoring would amount to requiring Netlog to carry out general monitoring of its website, in violation of the Commerce Directive.

The Court also recognized that courts seeking to adopt a measure that protects copyright holders must ensure that a fair balance is struck between the protection of copyright and the protection of the fundamental rights of individuals affected by such measures. In analyzing the effect of the requested injunction, the Court first acknowledged that it would require the installation of a filtering system that could monitor all of the content hosted by Netlog and detect the presence of all future infringements, including the usage of works created after the introduction of the system. The Court held that such an imposition would result in a “serious infringement” of Netlog’s freedom to conduct its business, as it would require require the installation of “a complicated, costly, permanent computer system at its own expense.”

Secondly, the Court held that an imposed filtering system would affect user’s rights to the protection of personal data, as it would involve the identification, systematic analysis, and processing of information connected with profiles on the social network. The Court also held that a filtration system would put at risk the freedom of users to send and receive information, as the system might not be able to always distinguish between unlawful and lawful content. This could lead to lawful communications being blocked unnecessarily. The Court stressed that it is not sufficient to declare a file exchange unlawful just because it contains copyrighted content. Such a determination also depends on the the application of certain statutory exemptions to copyright, which can vary from one country to another.

While the case does not directly change any legal requirements for hosting providers, it does reinforce that they cannot be obliged to monitor, filter, and block allegedly infringing content. Hosting providers can continue to be held liable for liable for hosting infringing content if they have actual knowledge of the presence of such content and do not act expeditiously to remove it. At a time when governments throughout the EU and the world are in the process of debating and reformulating online copyright protection laws, this case importantly re-emphasizes the importance of not overburdening communication tools with restrictive filtering requirements.