On January 7, 2015 the Court of Appeal of Milan, business division, issued a very interesting decision in the case Yahoo! Italia S.r.l. + Yahoo! Inc. (hereinafter also collectively ‘Yahoo!‘) vs RTI S.p.A (the major Italian private broadcaster) overturning a decision issued on May 2011, 19 by the Tribunal of Milan. Here you can find the decision in Italian only.
The Tribunal in the first instance proceeding, making reference to the distinction elaborated by the Italian case-law between ‘active’ and ‘passive’ hosting provider , qualified Yahoo! – in the provision of the video-sharing platform named “Yahoo Video Italia” – as an ‘active’ hosting provider not granted by the liability exception provided for the ISPs by the well-known Directive 2000/31/EC (hereinafter also the ‘Directive‘).
In particular, according to the Tribunal, the service provided by Yahoo! was not neutral, automatic and passive as requested by the Directive to the extent that Yahoo!: 1) included within its terms and conditions a license in its favor to use and communicate to the public the contents uploaded by the users; 2) included within said terms an indemnity clause against its users in connection with the contents uploaded on the platform; 3) included within the platform a removal procedure to signal the abuses; 4) indexed the contents uploaded by users by means of an appropriate search engine. The inclusion of such features within the relevant service were able, according to the Tribunal, to qualify Yahoo! as an ‘active’ hosting provider jointly liable with its users for the copyright infringements carried out by means of the service.
The appellate court in the recent decision overturns the decision issued by the Tribunal focusing its attention on the following two topics: a) the distinction between active and passive hosting provider; and b) whether or not a cease and desist letter sent by the right holder to the ISP is able to raise a removal duty upon the provider.
Active and passive hosting provider: is it time to overtake such distinction?
According to the Milan Court of Appeal the answer to the above question shall be affirmative.
Indeed, the recent CJEU case law on ISPs’ liability defined the scope of such liability and made clear that in the possible clash between fundamental rights – protection of IPRs’ vs freedom of speech and freedom to conduct business – the latter shall prevail.
From the above standpoint according to the appellate Court :“[…] the notion of active hosting provider is today misleading and shall be overtaken because it does not fit to the actual features of the hosting services“.
In addition, following an interpretation in line with the recent CJEU’s rulings on the subject matter, the Court clarifies that the features of the service at hand, as briefly recalled above, are not able to make the provider of such service liable for the contents hosted by its users.
Indeed, according to the Court, such features do not make the provider “owner” of said contents able by that way to alternate the nature of the contents. A different interpretation would weaken, according to the Court, the relevance of the hosting exception provided by the Directive that considers the ISPs’ liable only in case they fail to remove the illicit contents after having receipt a notice from the right holder or an order issued the competent administrative or judicial authority.
Is a cease and desist letter equivalent to a court/administrative body order?
Also in this case the answer is affirmative.
Indeed, according to the appellate Court a detailed cease and desist letter (which contains the URL of the pages where the contents are hosted) sent by the right holder is equivalent to a removal order issued by the competent authority. Both instruments are able to oblige the ISPs to remove the alleged illict contents from their services.
This is made clear, according to the appellate court, by the Directive and by the constant trend of the CJEU’s case law on the matter.
The decision briefly analyzed above surely constitutes a turning point in the Italian debate over the ISPs’ liability. Indeed, for the first time an authoritative Court, like the Milan’s one, states that the ‘Italian’ distinction between ‘active’ and ‘passive’ hosting providers is senseless and misleading under a European perspective.
Nonetheless the decision at hand is able to keep open further issues in light of the Italian legislative framework on the matter. Indeed, it is worth noting that the Legislative decree no. 70/2003 which implemented in Italy the Directive expressly requires a removal order issued by the ‘competent administrative or judicial authority’ in order to compel the ISPs to remove the alleged illicit content from the services provided.
A letter, although detailed, of the right holder is not sufficient. A public body shall, in any case, evaluate the illicit nature of the content at hand in full compliance with the adversarial principle between the parties involved.
In the decision at hand the Court of Appeal makes a direct application of the Directive which on this point is less protective for ISPs than the national legislation. It is likely that the margin of uncertainty determined by the decision on this point will fuel the national debate on the matter waiting for the decision of the Supreme Court that will follow after the RTI’s already announced appeal.