Different levels of protection

Google should not have a duty to proactively remove copyright infringing material from You Tube once it has been re-posted, a French court has ruled. 

Such an obligation would breach European Union legislation, since it would be ‘disproportionate to the aim pursued’ for Google – the owner of You Tube –  to prevent copyright infringing videos from being re-posted. In those cases that Google has not been notified of any suspected illegal material and the location where it has been re-posted, the French Court of Cassation ruled it would not be compatible with EU law to impose ‘a general obligation [on Google] to monitor the images they store and search for updates online’.

The French ruling was welcomed by service providers and search engines. Especially since a district court in Hamburg, Germany, ruled earlier this year that Google should ‘proactively flag up infringing material by using existing technology’ and inform rights holders when material - that had earlier been classified as unlawful - popped up again. The German Judge said YouTube should actively use ‘Content ID’, a system that is able to identify copyrighted music and film content the video giant has been using in order to prevent the spread of illegal copies. Back then, in April, the German court said YouTube should not solely rely on rights holders using the system and proactively use it as well. 

The latest court ruling in France does follow last year’s decision by the European Court of Justice, that ruled that national courts have no powers to oblige internet service providers to use filter systems, such as ‘Content ID’. Such an obligation would breach ISPs’ ‘rights to freely conduct business and individuals’ rights to privacy, free speech and the protection of their personal data’, the ECJ decided. In its ruling, the ECJ merely followed the E-Commerce Directive, which states that service providers cannot be made liable for copyright infringing material that they have not created and a duty to monitor online content should not exist.

The latest ruling, in France, should be seen as another step in the further classification of anti-piracy rules and policies in the European Union. Although the E-Commerce Directive states clearly that a national court cannot impose a general obligation to monitor online content on a service provider, an obligation to examine an individual case is possible and permissible under the E-Commerce Directive, allowing national courts to order service providers to monitor in ‘a specific case’. 

Does this mean right holders can still go to court and force a provider of online content to remove copyright infringing material, despite the French and ECJ rulings? It seems so. But only after the rights holders have approached the provider and pointed out which material they believe is illegal. Although the French judge followed the European judges, the German court ruling has set a precedent for Europe’s largest internet market. Therefore, it may be clear that the EU still has a long way to go before clarity on this matter can be given. After all, if right holders turn to a German court it is likely Google will be ordered around, while in France this is not the case.

Many experts believe it is now up to the European Commission to further tighten the rules and clearly specify what a ‘specific case’ is. Also, it needs to set out if there is any liability for re-posted material, as the French court said there was not. Too many questions remain unanswered, which means  right holders throughout Europe continue to suffer a different level of protection from service providers.

Michiel Willems © 2012 CP Publishing Ltd. Picture: Uworkers.org

 

London 2012 “invaluable” for showcasing mobile payments

A record number of mobile and contactless payments have been made during the London 2012 Olympic Games, mainly due to Visa’s payments infrastructure, as one of the main sponsors of the London 2012 Games. But also other payment processors rolled out mobile payments options. 

More than 140,000 contactless payment terminals throughout the United Kingdom – including 5000 London taxis and 3000 point of sale locations at Olympic Games venues – have been used during the Olympic Games, one of the largest mobile and contactless payments schemes to date.

Jim McCarthy, Head of Products at Visa, called the London Olympics “a unique opportunity to showcase how technology is changing the way people shop, pay and get paid around the world”. McCarthy said the Games “have demonstrated the future of payments, a future where most consumers will rely on mobile devices, tablets and PCs to manage their daily financial lives.”

Samee Zafar, Director at Edgar Dunn & Co in London, thinks “the Olympics have helped raise its profile.” Although Zafar warns that “to make [mobile payments] reach critical mass, banks and retailers must be committed”, he stresses that “the potential is indisputable.”

Whether “the Olympics mean gold” for contactless payments, “still remains to be seen”, said Nathalie Moreno, Partner at Speechly Bircham in London, “but it has certainly proved to be an invaluable platform to showcase the benefits of the contactless system.” 

'Forcing consumers' to use mobile or contactless payments – like Olympic sponsor Visa  during the Olympics (it was only possible to pay with a Visa card at Olympic venues) “has the advantage of familiarising consumers to the new system and also gives consumers the chance to appreciate the new technology first hand”, said Moreno.

Zafar said: “The parallel I can draw from the Olympics is that just like team GB – with little investment in 1992 they got only one gold and in 2012 with sufficient investment and commitment they secured 29 gold medals – three things are needed to make contactless payments successful: investment, commitment, and patience.”

Moreno expects contactless payments will have “a long-lasting legacy” beyond London 2012: “People are warming up to contactless payments and have experienced how convenient it is.”

Michiel Willems © 2012 CP Publishing Ltd. Picture: MobileToday.co.uk / ZDNet.co.uk

BT ruling on network charges sets “a precedent” for telecoms industry

The prices that British Telecom has been charging its competitors for the use of its network are not justified, the UK Court of Appeal has ruled. The Court has rejected BT’s claim that the Competition Appeal Tribunal (CAT) had not followed European telecoms rules when it decided BT’s charges were unacceptable. CAT had previously ruled that ‘BT’s prices had served to distort the market to the detriment of its rivals and consumers’.

The BT Tower in London

 “This case has set a precedent which is good news for all in the industry – well, except for BT”, said Paul Stone, a competition and regulatory partner at Charles Russell. “This was probably BT’s last roll of the dice to try to avoid having to repay the overcharge.”

Ofcom ruled in 2009 that BT had overcharged its competitors £42 million for access to network services and said Britain’s largest telecom operator should compensate its rivals. “That decision has now been upheld by both the Competition Tribunal and the Court of Appeal”, said Stone. Although “it is open to BT to seek permission to appeal” to the Supreme Court, Stone thinks it is “unlikely that BT will be successful in gaining permission in view of the Court’s judgment”.

Jan Willem van den Bos, Partner at SNR Denton in London, said “there have been few people who thought the decision could go in BT’s favour”, but adds that “with this decision now in the bag, there are several similar regulatory disputes currently running that could go the same way. Scrutiny [of network charges] is likely to get more intense.”

Michiel Willems © 2012 CP Publishing Ltd. Picture: Guardian.co.uk

UN: World leader Africa should harmonise mobile money laws

The East African Community (EAC) countries have been praised for their success in mobile money services but should make serious efforts to harmonise the different legal frameworks that cover the industry in the region, the United Nations Conference on Trade and Development (UNCTAD) has said.

UNCTAD has released a report titled Mobile Money for Business Development in the East Africa Community, which is a comparative study of existing mobile money platforms and regulation in the EAC countries, Kenya, Uganda, Tanzania, Rwanda and Burundi. The Report stated that Africa ‘is a world leader in offering mobile money services…with about 60 mobile money services already in place.’

However, the UN Report also urged the EAC countries  to introduce and implement harmonised regulation that should focus on ‘consumer protection, registration and transasaction limits, regulatory collaboration and interoperability between operators’.

Harmonisation is desired ‘as mobile money grows bigger and draws in more sectors, and new regulators will have to join the fold.’ UNCTAD noted that ‘dialogue is largely happening at a national level, with Kenya often leading the way, owing to the success of M-Pesa and the fact they have somewhat longer experience than the other EAC countries’. UNCTAD called for the EAC to prepare guidelines on electronic transactions, e-signatures and authentication, data protection and privacy, consumer protection, and computer crime.

Michiel Willems © 2012 CP Publishing Ltd. Map: The Habari Network, Nystrom.

Q&A Nathalie Moreno, Partner at Speechly Bircham

Moreno

Following last month's article (‘payments reform under pressure’), Michiel Willems spoke to Dr. Nathalie Moreno, Partner at Speechly Bircham, about the impact of the Eurocrisis on the progress of the Single European Payments Area (SEPA).

What is the impact of the current economic climate/Eurocrisis on SEPA? Is SEPA ‘on hold’?
Opinions vary depending on the perception of the raison d’être of the European Union - some view the Eurocrisis worsening as a result of the absence of SEPA and there are others who are more cautious of the concept of establishing SEPA due to the uncertainty of the economic climate. As the markets fragment more it is difficult for many to reconcile a unified approach to enable efficient cross border payments. The current approach seems to be to carry on with the same plans as before the Eurozone crisis hit and build on this fragmented market. In my opinion, there are no current measures in place to note that seem to have taken on board the impact of the crisis.

Do you think the migration deadline of spring 2014 is still realistic?
It is hard to see the deadline of spring 2014 not being moved. The Eurocrisis is developing at such a rate in 2012 that nobody can predict what will happen, and the impacts of increased lending and bailouts to keep the Euro afloat will surely affect the ability of these economies to make a certain decision on the future of SEPA. SEPA’s focus is on payment harmonisation and modernisation but with all the turmoil of the Eurozone as a whole it is difficult to see how this can be kept a reality without the need for new and added thoughts on SEPA’s development process which keep up with key market developments.

What is the role of the European Green Paper, which called for an integration of card, mobile and online payments? What do you think of the Green Paper and its future in the current political, economic and regulatory climate?
The European Payments Council called the EU Green Paper “controversial”, because some of the Paper’s suggestions imply more costs for the industry at a time when huge regulatory costs are sweeping banks. Many would argue that the approach for an integrated market for card, internet and mobile payments has at its forefront the interests of the consumer. The driving down of costs of payments and increased convenience for consumers are after all the key benefits of market integration and greater benefit the consumer than the industry itself. There is a worry that regulatory intervention could hamper the banking sector’s competitiveness in the global marketplace and also lead to the lack of development and innovation in this space. However, some would argue that looking into and improving the ease of market access and entry of new players is beneficial to companies looking to enter the market.  This would benefit many companies that are not banks as it will focus on the banks’ monopoly of deposits and restricting access of information to these deposits. This area is rapidly developing and in the current economic climate many would argue that increased benefits to the consumer can be seen as a step forward for the banking sector to address the interests of their customers. The cost of change may be high now but may impact the sector with better financial terms in the future.

What about the impact of SEPA on the public sector?
The impact of SEPA on the public sector is something that should be explored more fully. SEPA’s objective to harmonise electronic payments within the Eurozone will greatly impact public sector organisations, helping to simplify payment and increase efficiency. In uncertain times like these, where many public sector organisations are facing budgetary cuts from their Member State governments, the benefits to this sector will be of great interest. The banking sector are preparing for the change by forming project teams to assist organisations with impact assessments to meet the required SEPA standards and the changes ahead. These are all topics that could be highlighted to this sector to increase awareness of how to meet their requirements and how these requirements could benefit them.

Thank you for your time. 


Michiel Willems © 2012 CP Publishing Ltd. Pictures: Conservativs.com / Blackburnlife.com

Comment - A Google Gesture

Search engine Google has offered to settle an ongoing antitrust investigation by the European Commission in an attempt to end possible proceedings against the web giant. 

Last month, Google’s chairman, Eric Schmidt, sent a letter to European Commissioner Joaquin Almunia, expressing his hope that a deal could prevent a fully-fledged and in-depth antitrust investigation, which could lead to hefty fines of up to 10% of the search giant's annual revenue.

Google’s move does not come as a surprise, since Almunia urged Google in May to ‘make concessions’ and ‘offer remedies’ in order to avoid an all-out antritrust investigation. The US search giant did not have many other options than to respond to Joaquin’s request swiftly, since the Commissioner had made it clear that if the internet company failed to respond Almunia would take that as a refusal to adjust its business practices, and the Commission would not shy away from sending a formal antitrust complaint to the US-based company.

Although Schmidt’s letter was not made public, Google said Schmidt addressed the ‘four areas of concern’ that the Commission had singled out last month. Almunia had said it would look into the unequal treatment of third-party vertical search links; search engines specialised in particular queries, such as travel searches. He would also consider investigating whether Google is systematically copying content – without authorisation - from those vertical search engines (such as travel and restaurant reviews). Furthermore, Almunia believes that Google’s AdSense unfairly excludes competing ad networks through exclusivity requirements in the agreements with its partners. Finally, the Commission is alarmed by Google AdWords’ terms and conditions, which impose contractual restrictions on software developers, preventing them from offering search terms across other platforms for search advertising. 

Almunia

For Google, three of the four issues should not be too difficult to address, but a fair placement of the vertical search links in its search results is more problematic. It goes to the heart of Google’s ability to control its search experience and algorithm. And for a company that controls 90% of Europe's search traffic it will be hard to amend its business model in such a way that competitors and other search engines will not top the list without satisfying the European Commission. 

Furthermore, Google’s success can be partly explained through a practice called ‘predatory pricing’; offering products at a price that is below their cost of production. In many countries, such as France, this is outlawed, unless it can be objectively justified. Google is offering many of its products free of charge so it is therefore not surprising that many smaller web companies – such as Expedia and Trip Advisor - are eagerly awaiting the EC's response to Google’s letter. Their case will be that Google is not really prepared to make any sincere and fundamental changes, since that might mean the beginning of the end of the company’s European success.

However, Google surely has not forgotten what happened to computer giant Microsoft in March 2004: the EU ordered Microsoft to pay a fine of £381 million for abuse of its dominant position, the largest fine ever handed out by the EU to one single company. So far that is, because should the settlement offer fail, Google could face a fine up to $3.79 billion, a maximum of 10% of its global revenue last year. 

Michiel Willems © 2012 CP Publishing Ltd. Picture: Technorati.com / Bloomberg.com