Innovation policy and Internet liability in courts–beyond advertising

Morozov on innovation policy:

But why assume that innovation—and, by extension, economic growth—should be the default yardstick by which we measure the success of technology policy? One can easily imagine us living with a very different “Internet” had the regulators of the 1990s banned websites from leaving small pieces of code—the so-called “cookies”—on our computers. Would this slow down the growth of the online advertising industry, making everyday luxuries such as free e-mail unavailable? Most likely. But advertising is hardly the only way to support an e-mail service: It can also be supported through fees or even taxes. Such solutions might be bad for innovation, but the privacy they afford to citizens might be good for democratic life.

We should note that this ultimate goal of innovation is also what drives most of the debate around internet business liability. There’s so much fear at the European Union that the next law would stifle innovation and nip in the bud the “next Google” that any sane debate is almost impossible.

This way of thinking about innovation and “the Internet” has also spread out to Courts.

Consider this piece about how the Paris Court interprets the LCEN (the French translation of the EU E-commerce 2001 directive):

Considérant qu’en vertu du même critère, l’exploitation du site par la commercialisation d’espaces publicitaires, dès lors qu’elle n’induit pas une capacité d’action du service sur les contenus mis en ligne, n’est pas davantage de nature à justifier de la qualification d’éditeur du service en cause ;

Qu’il importe d’observer à cet égard, que la LCEN dispose que le service hébergeur peut être assuré même à titre gratuit, auquel cas il est nécessairement financé par des recettes publicitaires et qu’elle n’édicte, en tout état de cause, aucune interdiction de principe à l’exploitation commerciale d’un service hébergeur au moyen de la publicité ;

The crux of the argument is whether a service on the web like YouTube is merely a hosting provider (in which case it has a derogatory liability regime) or if it is something else than merely a hosting provider, in which case they could be found liable for copyright infringement.

The argument was that since Dailymotion (a YouTube competitor) displays advertisement next to the allegedly infringing videos, it must be considered an advertiser instead of a hosting provider. But the Court was not convinced by this argument.

Instead, and here’s the absolute nonsense, the Court says that:

• the law says a hosting provider can provide its service without charge;
• which necessarily means the service is financed through advertising,
• thus the law does not forbid to qualify an advertiser as a hosting provider.

See what happened? The problem in this reasoning is that the second part is totally flawed. Since when a service on the web provided free of charge is necessarily financed through advertising? Have the judges ever heard about something called Wikipedia, one of the largest website worldwide, hosting millions of encyclopedia articles and media—all this without advertising and without tracking their users.

The fact that Wikipedia is run by the non-for-profit Wikimedia is completely irrelevant, the point is not about the commercial nature of the provider, but really about the nature of the activity of the service provider.

Thanks to this kind of ill-advised ruling, almost nothing is done to shape what qualifies as a hosting provider that deserves a derogatory liability regime.

We need to take back control of innovation and technology policy to foster privacy and freedom; more than ever.