The Digital Economy Act 2010 (the Act) was given Royal Assent on April 8th, 2010. The Act regulates digital media and contains many of the suggestions from the Digital Britain Report of June 2009. The Act is controversial for many reasons. First, the lack of debate surrounding the Bill left many commentators reeling. The first reading of the bill was presented to the House of Commons on March 16th 2010, was not debated at length in the Commons and pushed through in the dissolution of Parliament. Second, whilst the Act touches on many areas of a digital economy such as the regulation of Channel Four, the most contentious parts of the bill are those centred on shutting down online piracy. The spirit of these provisions is to use Internet Service Providers (ISPs) to police individual users and their use of peer-to-peer file sharing websites.
Under the Act, copyright holders can send a “copyright infringement report” to an ISP with evidence of a copyright infringement. The ISP has the burden of notifying its subscriber of the alleged infringement (cl.4). In addition, ISPs must provide copyright holders, upon request, with a “copyright infringement list” outlining each infringement by an individual anonymised user (cl.5).
The Secretary of State may tell OFCOM (the UK communication regulator) to order ISPs to shut down sites, suspend accounts or enforce other limits upon an ISP customer (cl.10). ISPs that fail to apply technical measures against infringing subscribers can be fined up to £250,000 (cl.14). The maximum criminal penalty for making copyright-infringing works is raised to £50,000 (cl.42).
Under cl.17, the Secretary of State may make provisions concerning the granting by a court of an injunction forcing ISPs to block access to “a location on the internet which the court is satisfied has been, is being or is likely to be used for or in connection with an activity that infringes copyright”. In other words, government sanctioned website blocking.
Why the Uproar?
When the Bill was originally touted, there seemed to be widespread panic. Claims of shutting down You-Tube and restrictions on freedom of speech were widely reported. Some of the more vocally opposed proposals such as the “three strikes and you’re out” policy for recalcitrant users seem to have been withdrawn but the Act still has many in the UK concerned. The fears seem based on the prospect of shutting down of sites that host a combination of legitimate and illegal material and the shutting down of sites that may use copyrighted work but in a reportage capacity eg wikileaks.org. At the extreme, some argue that, the inclusion of the phrase “likely to be used” in cl.17, may mean a site like Google may be blocked based on its assumed intentions rather than its actions.
The concerns from the ISPs seem to relate to their duty to send infringement notices to users and their potential obligation to shut down access. The problem with the Act from an ISP’s perspective is that whilst copyright holders can link piracy with an IP address, and these may be linked to a household’s internet account, there is no guarantee that the infringer will be identified. An IP address can be used by many people at once, for example by legitimate users, neighbours, visitors or hijackers. For cafes and public places with wi-fi, the identification of a user is almost impossible. This has led to a fear that many innocent account holders will be sent infringement notices.
Proponents say the current procedure of getting a court order before an ISP will identify the infringing user is inefficient and costly. By making it clear that an ISP is obliged to identify the user and by imposing a penalty of disconnecting the user, the cost of enforcing copyright laws will lessen as owners are not forced to go the court for orders or seek a remedy through the courts.
Piracy in Australia
The legislative approach in the UK is an interesting contrast to the current position in Australia which relies upon ISPs adopting a voluntary repeat infringer policy. The ‘safe-harbour’ provisions, which were introduced into the Copyright Act 1968 as a consequence of the AUSFTA, were considered in the recent case of Roadshow Films Pty Ltd v iiNet Limited (No. 3)  FCA 24, reviewed in the Fortnightly Review in February and March. In that case the Federal Court held an ISP to be not liable for its user’s peer-to-peer distribution of copyright works. The case is scheduled for appeal but the approach of the Court to the safe harbour provisions is interesting in the context of the Digital Economy Act.
Three key aspects of the iiNet decision are important in this context:
1. The meaning of the ‘power to prevent’ infringement under section 101(1A) with respect to authorisation liability.
- Whilst iiNet had the power to suspend or terminate users’ accounts under its customer contract, the Court held that this did not equate to an obligation to suspend or terminate accounts for copyright infringement. The Court observed [at 430] that ‘copyright infringement is not a straight “yes” or “no” question’. Therefore, the concept of who would constitute a repeat infringer was not self-evident, raising the same interpretation issues as outlined above with respect to the Digital Economy Act.
2. The operation of s112E.
- Although this section of the judgment is obiter, the Court interpreted this section to have little or no practical effect. The only circumstance in which s112E could have effect is where the person merely provides facilities for the making of the infringement and does nothing more. However, of course, if this is all the person is doing, it would be unlikely they would fall within the concept of authorisation. Any knowledge of infringement would mean that the section is no longer applicable.
3. The safe harbour provisions.
- Again, this section of the judgment is obiter as the sections only apply once a finding has been made that the ISP is liable for infringement. The Court confirmed that as compliance with the provisions is voluntary, failure to adopt a repeat infringer policy cannot be evidence that goes to a finding that an ISP is liable for copyright infringement. In order to fall within the limitation of liability provided by the safe harbour provisions, ISPs are required to adopt and reasonably implement a policy that provides for termination in appropriate circumstances of the accounts of repeat infringers.
- Interestingly, the Court held that iiNet had a repeat infringer policy even if it had not been fully written down nor described to its subscribers: [at 593] ‘It is impossible to fail to notice the complete vacuum of legislative guidance in relation to any category A requirements when compared to the highly prescriptive requirements in relation to categories B-D found in s 116AH(1) and the Regulations. Neither the legislation, the Regulations nor extrinsic materials provide any guidance to the Court as to what the ‘appropriate circumstances’ for termination are, what ‘repeat infringement’ means or what the ‘accounts of repeat infringers’ means. The assumption must be that Parliament left latitude with the CSP to determine the policy, and left the meaning of those words to be determined by the courts.’
The approach of the Court in this case demonstrates the difficulty of interpreting and applying such concepts, and it is likely that similar confusion may apply in the context of interpretation and application of the Digital Economy Act (UK).
Clearly, ISPs make much easier targets for copyright infringement actions than end users, but as a matter of public policy, the question needs to be asked regarding how much accountability and responsibility we wish to place on ISPs for monitoring and enforcing access to certain content. This broader policy question also arises in the context of content regulation and the Australian Government’s proposed introduction of mandatory internet filtering. Whether this is an issue for the courts or rather one for the legislature has to be questioned. The impact of the UK Digital Economy Act will certainly be closely watched by interested parties in Australia.