Legal Analysis of the Intermediary Service Providers of Non-hosting Nature
Final report prepared for European Commission
66 Pages Posted: 9 Mar 2021
Date Written: July 1, 2020
This study offers a legal analysis of the “intermediary service providers of non-hosting nature”. It analyses the technological and legal evolution around non-hosting intermediary services and the way the existing legal framework for such services could be upgraded in the forthcoming Digital Services Act. The liability privilege is one of the most central aspects in the regulation of online intermediaries (“intermediaries”) both in Europe and other jurisdictions. In Europe, the liability exemptions benefiting certain intermediaries are included in the e-Commerce Directive (ECD).
We use a broad understanding of “non-hosting” as a categorisation of intermediary services other than those covered by Article 14 ECD, which essentially focuses on the storage of information. Thus, we concentrate on Articles 12 (“mere conduit”) and 13 (“caching”), as well as on related intermediary services, which may be covered by these provisions. The overall goal of the study is to provide insights to answer the question of whether Articles 12 and 13 ECD are still fit for purpose, and –where applicable– to provide recommendations on how the current framework might be updated.
It is a paradox that it is required to have a sound understanding of the technology in order to describe a technology-neutral regulation. Therefore, Section 2 contains a technical typology of non-hosting intermediary services and functions covering “mere conduit” services, “caching” and content delivery networks, as well as auxiliary network services and combinations of different types. 20 years after the adoption of the ECD it is not surprising that this typology includes services that did not exist in this form when the Directive was conceived. It also describes the technical mechanisms available to such service providers to address illegal content.
Section 3 turns towards the current legal framework and provides an analysis of Articles 12 and 13 ECD, describing their traditional scope, mechanism, as well as relevant case law and a brief description of grey areas. After a brief overview on Article 15 ECD, it turns towards the related aspect of injunctions. Finally, it looks at self- and co-regulation in the non-hosting landscape.
Section 4 introduces an analytical framework with possible parameters for (future) regulation, which also serves as a methodological basis of the in-depth analysis of selected grey areas. For the purpose of this study, we emphasise proximity to content and the availability of proportionate measures as potential analytical categories.
Section 5 examines in detail the Domain Name System (DNS), WiFi hotspots, Content Delivery Networks (CDNs), processing in the cloud and live-streaming. The DNS has existed since before the adoption of the ECD, but this study concludes that the role of DNS- functions might fall outside the existing liability exemption regime. Consequently, the provision of DNS-functions –despite conceptually and technically being far from content– might be less priviliged than e.g. hosting in the current framework. Regarding WiFi hotspots, the legal uncertainty around their positioning within the liability exemption framework has been resolved by the CJEU. CDNs are complex business models which offer a variety of functions that did not exist when the ECD was adopted. These intricate functions are difficult to locate within Articles 12-14 ECD. Also processing in the cloud may give rise to legal uncertainty. Similarly, live-streaming is not easily located within the current liability exemption regime.
In summary, the landscape of non-hosting intermediaries has developed significantly since the adoption of the ECD, for example, with regard to the development from caching to CDNs and content adaptation, as well as developments related to cloud computing. We conclude that despite rapid technological developments, the focus of and the rationale for the intermediary liability exemption regime in relation to non-hosting intermediaries have aged well. We therefore recommend that the main regulatory approaches of Articles 12 and 13 ECD should be kept; this includes both the specific conditions for services falling under Articles 12 and 13 ECD as well as basic principles established by the ECD.
This study identifies, however, several aspects where the current framework could be upgraded. This relates both to new intermediary functions as well as old intermediary functions, which may be uncertain under the current liability exemption regime. Based on the findings of this study, Section 6 concludes with recommendations including updated principles and suggestions for resolving grey areas and closing reguilatory gaps.
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