Wednesday, 18 May 2011

Point of no return for Digital Economy Act

London - UK internet service providers (ISPs) BT and TalkTalk have suffered a heavy blow in their battle against the implementation of the Digital Economy Act (DEA) in its current form, after the UK High Court ruled on 20 April that the most important elements of the DEA comply with EU law.

The controversial law, aimed at protecting the rights of copyright holders on the internet, does not conflict with any EU legislation or case law, Justice Kenneth Parker ruled.

BT and TalkTalk had challenged the DEA in court, because they detest a part of the DEA under which ISPs can be forced to disconnect users if intellectual property right holders believe their rights have been violated. The two large providers find it unreasonable that ISPs are being made responsible for the behaviour of individual users and could soon be forced to monitor their customers online.

BT and TalkTalk tried to convince the Court that the DEA breaches users’ right over the protection of personal data, but Judge Parker would not have it. He stated that information obtained from IP addresses - to locate and identify users - is personal data, but that it is acceptable for intellectual property right holders to use this information in case their rights are violated.

Justice Parker did rule that the DEA was unlawful in making ISPs responsible for certain implementation and enforcements costs; he decided ISPs will no longer have to pay for Ofcom - the UK media and internet regulator - to establish an appeals body, although the obligation to pay a share to help run the appeals system remains, as well as 25% of the costs of letters that are going to be sent to potential copyright infringers.

But this part of Parker’s ruling turned out to be insignificant when BT and TalkTalk’s main argument - that the DEA would mean a restriction of internet freedom - was wiped off the table. Parker ruled ‘Parliament has struck a balance’ between the protection of copyright and giving the public the right to access free content. He admitted ‘existing copyright legislation may strike that balance in a way that is controversial or open to criticism’ but he continued by saying that ‘in my view, Parliament, does strike a fair balance’. When BT and TalkTalk heard those words, they realised the game was up.

The 20 April ruling is a bitter disappointment for ISPs since it paves the way for the DEA to be implemented in its current form. Ofcom is in the process of writing a new code that will clarify the practical implementation of the obligation for ISPs to shut down users after they have received complaints from right holders, and after Parker’s ruling, there is nothing that can realistically stop Ofcom from doing so.

Some experts believe Justice Parker was getting a bit too political when he said ‘the DEA represents a more efficient, focused and fair system than the current arrangements’. BT and TalkTalk, like many other ISPs, obviously disagree, but there is not much they can do about it anymore. They have practically run out of options so it seems a new copyright regime with ISPs policing the web will soon be a reality.

TalkTalk, however, vowed not to give up and is considering taking the matter to the Court of Justice of the European Union. The ISP released a defiant statement: ‘We may have lost this particular battle, but we will continue fighting’.

Their statement came even before the House of Commons Culture, Media and Sport Committee announced on 3 May it will drop its investigation into the DEA. The Committee said that ‘in light of recent court action’ it will not longer investigate whether the DEA is the right mechanism to protect copyright on the internet.

Obviously, TalkTalk is done talking, when it becomes impossible to put your money where your mouth is.

Michiel Willems (C) 2011. Published previously in E-Commerce May issue. Copyrights apply at all times.