ISPs fail to overturn Digital Economy Act

BT and Talk Talk have failed in their attempt to overturn certain provisions of the Digital Economy Act (“DEA”) by judicial review.

Justice Kenneth Parker rejected arguments led by the ISPs that the contested provisions of the DEA will breach key pieces of European Union legislation. In Justice Parker’s opinion:

  • The Technical Standards Directive will not be breached because the DEA is not currently legally enforceable against individuals or ISPs, and therefore it is perfectly acceptable for the Government to notify the DEA to the European Commission at the same time that it notifies the forthcoming draft Initial Obligations Code (which is being prepared by Ofcom);
  • The E-Commerce Directive (and its “mere conduit” protection for ISPs) will not be breached because the DEA will not impose liability on ISPs for copyright infringement; and
  • The Data Protection Directive will not be breached because, although the “relevant data” to be processed by copyright owners (ie IP addresses) will, in Justice Parker’s opinion, constitute “personal data”, the processing will be relevant and lawful for the purposes of preventing copyright infringement.

Justice Parker had more sympathy with the ISPs’ objection to bearing 25% of the costs incurred by Ofcom in carrying out functions under the contested provisions of the DEA. He ruled that these were administrative costs breaching Article 12 of the Authorisation Directive, and were therefore unlawful. (Nothing in the actual DEA will be changed, but the government will have to reapportion these costs. Note also that ISPs will still be required to pay 25 per cent of the costs of sending out letters to alleged infringers.)

Justice Parker then addressed the claim that the provision represented a disproportionate restriction on the free movement of services and/or the right to privacy and/or the right to free expression or to impart and receive information. He was reluctant to tamper with the legislation, saying: “the issues in this judicial review…are classically of the kind that Professor Lon Fuller famously described as ‘polycentric’ where it is hard enough for the legislature to seek to think through, and to weigh all the possible implications of a range of policy choices that are theoretically open, but it is nigh impossible for a judge…this Court must accord Parliament a wide margin of discretion in weighing the competing rights in this case.”

Despite this reticence, Justice Parker interestingly endorsed the DEA’s controversial “3 strikes and you’re out” regime, stating that it represented “a more efficient, focused and fair system than the current arrangements”. Justice Parker also noted that in any court actions against infringers the burden of proof will be on the rights holders to show that the accused is the party which has actually infringed copyright (as opposed to the party which has, for example, provided wi-fi access). He concluded by stating that he did not believe that any useful purpose would be served by referring to the European Court of Justice the questions of European Union law raised by the judicial review.

In contrast, BT and Talk Talk have announced that they are considering their options, and have not ruled out an appeal to the Court of Appeal, or a request that the Court of Appeal make a reference to European Court of Justice.

Personally, I’d disagree with Peter Bradwell from the Open Rights Group’s claim that “it is not a judgement about whether or not the Digital Economy Act is right in policy terms.” I think that close reading of the decision from paragraph 203 onwards leaves little doubt that Justice Parker tacitly approves of the reasoning behind the DEA.

The full text of the judicial review can be read here.

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