Professor Lorna Woods, co-author of Steiner & Woods, EU Law
Yesterday’s CJEU judgment in Papasavvas is the most recent in a line of cases seeking to trace the edges of the concept of ‘intermediary’ for the purposes of EU information technology law, a question that has become rather more problematic than when the eCommerce Directive was first drafted in 2000. Then, the role of intermediaries was much more technical and related to transmission and technical access. Since then the market has moved on with the development of many services that are now viewed as important for the access and use of content on the Internet. Many of these services blur the boundaries between transmission services and content services. To what extent are those services neutral intermediaries? While in many respects this case could be seen as quite straightforward, it hints at still yet unresolved questions and highlights difficulties about reliance on EU law in national courts.
Mr Papasavvas (‘P’) brought an action for defamation in respect of articles published in the daily national newspaper O Fileleftheros, on 7 November 2010, which were published online on two websites. He sought damages and an injunction. The national court referred the following questions:
(1) Bearing in mind that the laws of the Member States on defamation affect the capacity to provide information services by electronic means both at national level and within the European Union, might those laws be regarded as restrictions on the provision of information services for the purposes of applying Directive 2000/31 …?
(2) If the answer to Question 1 is in the affirmative, do the provisions of Articles 12, 13 and 14 of Directive 2000/31 …, on the question of liability, apply to private civil matters, such as civil liability for defamation, or are they limited to civil liability in matters concerning business to consumer transactions?
(3) Bearing in mind the purpose of Articles 12, 13 and 14 of Directive 2000/31 … relating to the liability of information society service providers and the fact that, in many Member States, an action must exist in order for a prohibitory injunction to be granted which will remain in force pending full completion of the proceedings, do those articles create individual rights which may be pleaded as defences in law in a civil action for defamation, or must they operate as an obstacle in law to the bringing of such actions?
(4) Do the definitions of “information society service” and “service provider” in Article 2 of Directive 2000/31 … and Article 1(2) of Directive 98/34 … cover online information services the remuneration for which is provided not directly by the recipient, but indirectly by means of commercial advertisements posted on the website?
(5) Bearing in mind the definition of “information service provider”, laid down in Article 2 of Directive 2000/31/EC and Article 1(2) of Directive 98/34 … could the following, or any of them, be regarded as a “mere conduit” or “caching” or “hosting” for the purposes of Articles 12, 13 and 14 of Directive 2000/31:
(a) a newspaper that operates a free website on which the online version of the printed newspaper, with all its articles and advertisements, is posted in pdf format or another similar electronic format;
(b) an online newspaper which is freely accessible but the provider obtains money from commercial advertisements posted on the website, where the information contained in the online newspaper comes from the newspaper’s staff and/or freelance journalists;
(c) a website which provides (a) or (b) above for a subscription?’
The Court dealt first with queries raised regarding admissibility. P raised questions about timing: the proceedings at national level are at an early stage, to the point that the defendants in the national action have not yet filed a defence. On this basis, P argued that the questions referred must be hypothetical as the nature of the dispute had not yet been defined. The Court did not address this argument directly but instead stated that ‘the description of the legal and factual framework of the proceedings in the order for reference seems to suffice so as to permit the Court to make a ruling’.
P had also argued that the defendants did not fall within the scope of the e-Commerce directive and therefore questions relating to its interpretation were unnecessary. This is of course a little circular and the Court rejected the argument, pointing out that the scope of the Directive and the applicability to the defendants was one of the main issues that needed to be resolved. Having determined that, the Court re-ordered the questions referred and started with question 4 on the application of the Directive.
The Court reformulated the question, asking whether ‘information society services’ (ISS) as defined in the directive ‘covers the provision of online information services for which the service provider is remunerated not by the recipient, but by income generated by advertisements posted on a website (para 26).’ The Court re-iterated that the definition of ISS has four elements:
· ‘normally provided for remuneration’;
· at a distance;
· by electronic means; and
· at the individual request of a recipient of services.
The final three seemed non-contentious, but what concerned the national court was the issue of remuneration, as the user did not pay to access the website. The Court then referred to recital 18 of the Directive, which expressly excludes the possibility that a service will fall outside the directive merely because payment is indirect. In this there is a similarity to the CJEU’s reasoning in Bond van Adverteerders and Others (paragraph 16).
Having determined that the directive could apply to information services such as those in issue here, the Court then considered question 1 in which the referring court is effectively asking whether the directive precludes the application of rules of civil liability for defamation to ISS providers. The directive applies the principle of home country rule to service providers, with the corollary that Member States should not impose additional rules on services coming from other Member States. Given that the defendants in the domestic proceedings were based in the same Member State as P, the issue of whether the civil defamation rules constituted a restriction did not apply, though the Court noted that such rules fall within the scope of the directive (at Article 2(h)).
The Court then went on to consider whether the defendants could benefit from the intermediary immunity provisions in Articles 12-14 of the Directive. The Court considered the role of these provisions, and relying on its reasoning in Google France and Google (paragraph 113) and L’Oréal and Others (paragraph 113) stated that they applied to intermediaries and activities which are of ‘a merely technical, automatic and passive nature’, that the ISS provider has neither knowledge of nor control over the information which is transmitted or stored and takes a neutral approach to content. The Court highlighted factors such as assisting clients in drafting commercial messages, or in optimising presentation of content. It concluded:
Consequently, since a newspaper publishing company which posts an online version of a newspaper on its website has, in principle, knowledge about the information which it posts and exercises control over that information, it cannot be considered to be an ‘intermediary service provider’ within the meaning of Articles 12 to 14 of Directive 2000/31, whether or not access to that website is free of charge. 
So, in such a circumstance, a newspaper cannot claim exemption from civil liability. Given this answer, it was not apparent that the Court needed to address question (2). Nonetheless, it confirmed that it made no difference whether the case involved business to consumer or consumer to consumer cases. 
The final issues dealt with were those raised by question (3), though again the Court noted that answers to this question might not be necessary given that Articles 12-14 did not apply. The Court summarised this question as asking whether Articles 12-14 preclude the adoption of interim measures (such as the injunction prohibiting publication) or whether those articles create individual rights which the ISS provider may plead as defences in law in the context of legal proceedings such as those in the main proceedings. As regards the first element, the Court noted that – subject to the principles of equivalence and effectiveness, matters as to conditions under which remedies might be available were matters for national law. 
The second element effectively concerns the direct effect of the immunity provisions: can they be relied on in the context of a dispute between private parties. The Court returned to the general case law on horizontal direct effect of directives, arguing that ‘with regard to proceedings between individuals, such as those at issue in the main proceedings, the Court has consistently held that a directive cannot of itself impose obligations on an individual and cannot therefore be relied on as such against an individual’  but that indirect effect/doctrine of consistent interpretation from Von Colson would apply. 
While this case at the headline level came to the right answer - people who write or (first) publish content on the Internet are not intermediaries - the case raises a couple of issues worth pondering further.
First off, there was no Advocate-General’s opinion. Querying this might seem churlish, given that I’ve just said the Court got to the right answer, and on the facts the judgment is a straightforward application of the Court’s existing law on Articles 12-14 in Google and L’Oreal. It is, however, a sensitive area: currently a case, Delphi, concerning a news site and the self-same provisions is awaiting a judgment from the Grand Chamber of the European Court of Human Rights on whether there was a breach of freedom of expression in finding the journalists liable for defamation (see the Chamber judgment here). While there is a crucial factual difference between the two cases (Delphi concerns liability for user generated content, not journalism), it is noteworthy that although Recital 9 recognises the significance of ISS for freedom of expression, Papsavvas did not even consider whether there was a freedom of expression argument in issue.
To some extent most of the questions referred by the national court seem to reflect a lack of familiarity with the internal market system generally. So, the application of the rules in this case might seem straightforward, but they might not always be so. While it should come as no surprise that national rules imposing civil liability on a service ‘import’ could be a restriction, nor that ‘home’ regulation should not be circumvented by reliance on provisions aimed at cross-border services, the determination of the place of establishment may in itself be problematic, as cases on cross-border television services have shown. The eCommerce Directive seems to refer to the Court’s general case law on this point (Article 2(c), Recital 19): the Court accept the establishment point as proven here in Papasavvas.
There is a risk of forum shopping and, by contrast to the Audiovisual Media Services Directive (which deals with television), the eCommerce Directive has no ‘anti-abuse’ clause, although Member States may derogate on limited grounds (article 3(4), Recital 24). In this case, the Court did not address the question of whether rules relating to defamation could be seen as being justified under the protection of human dignity in Article 3(4)(a)(i). Of course, a system which allows or even encourages delocalisation to another Member State has the consequence of adversely affecting would be plaintiffs under the national rules, especially private persons and small businesses. Even in rules of conflicts allow action in the injured party’s home state, there may be questions as to applicable law in the light of the home country regulatory principle (see eDate and Martinez). So, while the eCommerce Directive claimed not to affect rules on conflicts of law (Article 1(4)), there is an interrelationship there and one which may affect the effectiveness of remedies for users.
Perhaps the interesting questions are those which deal with the interface between the immunity provisions and national law. The purpose of these provisions is to encourage the development of the digital environment, particularly cross border services (recital 40). It should therefore make no difference if the service the intermediary carries is between businesses, or business to consumer, as indeed the Court ruled. The national court also questioned whether injunctions were permissible. The Court handed this one off to national procedural autonomy, but it is arguable that the terms of the directive suggest that injunctions are in principle permissible: each of the intermediary exceptions state that the exemption from liability does not affect the possibility of the Member State’s legal system requiring the intermediary to terminate the offending activity.
Finally, we come to the question of whether intermediaries can rely on the exemption directly before national courts: in effect, do these provisions have horizontal direct effect? The Court dealt with this by returning to basic principles precluding such an effect, but in doing so it argued that Union law precludes the imposition of an obligation on an individual. Of course, in this case the directive is not imposing an obligation on an individual but rather removing it. In this sense, although for different reasons, the position is closer to that in cases such as CIA Security International or even Wells, where a national obligation is disapplied. This area of law is problematic generally. Suffice it to note here that this approach knocks a potentially large hole in the protection of intermediaries if the Member State has not implemented, or not implemented correctly, indirect effect notwithstanding.
Barnard & Peers: chapter 6, chapter 14