Internet Industry concerns on the Anti-Counterfeiting Trade Agreement

April 2012. The signatories of this statement (ECTA, ETNO, EuroISPA, GSMA Europe) believe that, with ACTA, the European Parliament will have a leading role in identifying the most balanced outcome for European businesses and citizens. However, while the signatories recognise that copyright infringement and counterfeiting online are unacceptable, we also believe that jeopardising the economic potential of the Internet to create jobs and growth is equally unacceptable, as are enforcement models that undermine fundamental rights for citizens.

Our pan-European organisations, ECTA, ETNO, EuroISPA and GSMA Europe represent the European electronic communications industry that consists of both national and pan-European fixed and mobile telecoms operators, Internet service providers and cable companies. Our European industry plays a crucial part in connecting European citizens and businesses to information, business tools news, entertainment, social media, cultural content and other public interest content.

With ACTA, the European Parliament will have a leading role in identifying the most balanced outcome for European businesses and citizens. However, while the signatories recognise that copyright infringement and counterfeiting online are unacceptable, we also believe that jeopardising the economic potential of the Internet to create jobs and growth is equally unacceptable, as are enforcement models that undermine fundamental rights for citizens.

Over the last 15 years, our industry has delivered half of European productivity growth and we want to stress the fact that, notwithstanding the economic crisis, our industry continues to invest and to enable European businesses to grow and compete at a national and international level. ACTA, as it stands, does not bring the legal certainty needed by the European Internet industry to develop and compete internationally.

In this context, we would like to reiterate the main concerns we have in relation to the text of the agreement:

Injunctions (Article 8): In the Civil Enforcement Section, ACTA allows judicial authorities to issue an order (injunction) against a party, or a third party, to “prevent infringing goods from entering into the channels of commerce”. This injunction power is far broader than the one foreseen in the EU acquis (i.e. Intellectual Property Rights Enforcement Directive, 2004/48/EC). The current European Directive allows injunctions “to prevent any imminent infringement.” In addition, third parties need to be involved in the infringement to be potentially subject to the judicial authority order (“against an intermediary whose services are being used… to infringe”). ACTA removes any notion of a threshold for prevention, de facto amending substantially the existing EU acquis.
Finally, we are currently in the process of reviewing the Intellectual Property Rights Enforcement Directive. Supposing that ACTA is in line with the “existing” EU acquis on this point, we do not and cannot know the impact of the forthcoming legislative proposals nor how these proposals are  going to impact or restrict the decision making process in the European Parliament.

Criminal sanctions (Article 23): This Section mandates each signatory Party to adopt legislation for criminal procedures for copyright infringements, something which we currently do not have at EU level. Despite statements claiming that the provision would not require any additional EU legislation, the wording of Article 23.1 is clear – it states that Each Party signing ACTA shall provide for criminal procedures and penalties. If it is the case that this does not apply to the EU, this should be clarified. We believe that Article 23 will have consequences which limit the future decision making freedom of MEPs and will force MEPs to stick to what ACTA establishes without any possibility to amend definitions or procedures and sanctions as introduced by the agreement. This will prevent EU policy makers from tailoring any legislative initiative to the European social and economic scenario.

Cooperation between businesses (Article 27.3): The Enforcement provision in the Digital Environment Section states, “Each party shall endeavor to promote cooperative efforts within the business community to effectively address” copyright infringements. This text would enable implementation of EU-wide cooperation obligations such as an extra-judicial ‘graduated response’ mechanism, as the result of an obligation (“shall”) on the ACTA signatories  to “effectively address” infringements. This wording does not comply with the EP Resolution on ACTA of March 2010, which explicitly excludes such cooperative efforts. Furthermore, it contradicts the Commission’s repeated statements that graduated response is not an outcome sought by the ACTA.
In addition, the article (in footnote 13) gives a strong priority to the “legitimate interests of rights holders” without seeking to strike a balance with the equally important legitimate interest of intermediaries to conduct their business as underlined in Article 16 of the Charter of Fundamental Rights and as explicitly explained in the recent rulings from the European Court of Justice in Scarlet Extended and Sabam/Netlog.Finally, article 27.3 also introduces amongst the list of fundamental rights the “fair process”. However, the Charter of Fundamental Rights does not mention this concept nor is the EU acquis familiar with it. In the absence of any impact assessment on ACTA, we do not know what the consequences could be of introducing such a concept within the existing European framework.

Disclosure of information to rightsholders (art.27.4): This article provides that the competent authority (not necessarily the judicial authority) should have the power “to order an online service provider to disclose expeditiously to a rightsholder information sufficient to identify a subscriber whose account was allegedly used for infringement”. However, it does not bring with it the needed judicial safeguards contained within the EU framework. References such as the “sufficient claim” from a rightsholder that the account of the subscriber “was allegedly used for infringement” risk lowering rather than increasing the level of legal protection afforded by the EU acquis.

ACTA Committee (Article 36): The agreement creates a new body, the ACTA Committee, with the power to interpret the agreement. However, due the vagueness of the provisions of ACTA, an interpretation from the Committee could have the effect of bringing changes to the EU acquis, including in the way it is applied and understood, outside the European democratic decision making process. Should the EP approve ACTA, it will effectively agree that the ACTA Committee can in the future re-introduce stringent provisions or additional obligations, even if not in line with the EU acquis, without any possibility for the EP to have a say in this regard.

As it stands, ACTA would inevitably hamper the efforts of the European Internet industry to develop the European Information Society. If we want to achieve the targets of the Digital Agenda and the EU2020 Strategy, we need to ensure that the European industry works within a balanced and efficient legislative framework. ACTA, as it stands, does not provide any legal certainty for European businesses and instead will have a negative impact on European innovation.