Digital Economy Act survives EU law challenge

06 Mar 2012

The Court of Appeal has today dismissed a challenge to the lawfulness, under EU law, of the provisions of the Digital Economy Act 2010 aimed at requiring internet service providers (ISPs) to help reduce illegal ‘peer to peer’ file-sharing.

Under the controversial Act, Ofcom must make a Code requiring ISPs to notify their subscribers of alleged instances of online copyright infringements, and to compile lists to allow copyright owners to identify repeat offenders. The Act also makes provision potentially to require ISPs to take “technical measures” against the most serious copyright infringers, such as to limit their use of, or even to terminate, their internet connections.

The challenge was brought by two major ISPs, BT and TalkTalk, who argued, inter alia, that the imposition of requirements on ISPs under the Act would breach EU law, because the Act had not been notified in draft to the European Commission under the Technical Standards Directive, and the requirements would be incompatible with EU Telecoms Directives (including the E-Commerce Directive, the Privacy and Electronic Communications Directive, and the Authorisation Directive). After the challenge failed in the High Court in April 2011, the ISPs appealed to the Court of Appeal.

The Court of Appeal rejected the challenge to the Digital Economy Act in full.  However, the Court found for the ISPs on one minor ground of challenge, which related not to the Act itself, but to proposed rules requiring ISPs (as well as copyright holders) to contribute towards the costs of the body that will hear appeals from subscribers against copyright infringement notifications.  The Court’s judgment means that the Government is free to press ahead with implementing the Digital Economy Act regime.

The ISPs have not yet said whether they will seek permission to appeal to the Supreme Court.

Robert Palmer and Alan Bates represented the Secretary of State for Culture, Olympics, Media and Sport (the Respondent).