User-generated content has become an integral part of the modern internet and the hosting defence the cornerstone of many website owners’ liability model. However, while there has always been a general understanding that website owners shouldn’t be liable for content they host for third parties, the exact scope of the defence has been elusive. In particular, which activities can properly be described as the “storage of information”, what is an “information society service” and can user-generated content be shown alongside the website owner’s own information?
The European Court of Justice’s recent ruling in Google v Louis Vuitton (Joined Cases C-236/08 to C-238/08) and a recent UK judgment in Kaschke v Hilton [2010] EWHC 690 shed some light upon how the courts will interpret these terms and provide at least some comfort for website owners.
What is the hosting defence?
The hosting defence originates from Article 14 of the E-Commerce Directive (2000/31/EC). It limits the liability of providers of “information society services” where such services consist of the “storage of information” provided by a recipient of the services. The defence will only apply where the provider:
- does not control or have knowledge of the illegal activity or information; and
- expeditiously removes the offending information when alerted to it.
The European Court of Justice - Google AdWords
In March, the European Court of Justice delivered its decision in Google v Louis Vuitton concerning Google’s paid referencing service ‘AdWords’.
Google’s AdWords service displays advertising links, accompanied by a short commercial message, alongside “natural” search results in response to a user inputting specified keywords reserved by an advertiser. Advertisers pay Google for this service on the basis of the frequency with which users click on their advertisement.
A number of trade mark owners, including Louis Vuitton, sued Google for trade mark infringement on the basis of the use of their trade marks as keywords. The case was referred to the Court of Justice following a reference by the French Cour de Cassation.
AdWords and the hosting defence
Having found that in supplying the AdWords service Google does not “use” the trade mark in the course of trade and therefore could not be liable itself for trade mark infringement, the Court of Justice went on to consider whether Google could rely on the hosting defence in circumstances where Google might be considered jointly liable with advertisers for trade mark infringement under national laws.
First, are AdWords an information society service within the meaning of Article 14? The Court of Justice found that AdWords had all of “the features” of an information society service.
Secondly, do Adwords just involve the storage of information? The Court of Justice decided Google could only rely on the hosting defence to the extent that its role was merely “neutral in the sense that its conduct is merely technical, automatic and passive” such that it had “not played an active role of such a kind as to give it knowledge of, or control over” the keyword data that it stored from the advertiser. Once Google had obtained knowledge of the unlawful nature of the data or of the advertiser’s activities, it would need to act “expeditiously” in order to remove or disable access to the data concerned in order to avoid liability.
It is, however, for the national courts to decide whether Google’s role is “neutral”. There may need to be further investigation into the Adwords system, including the role Google has in the selection of those Adwords and the influence it has over the prioritisation and selection of those Adwords in response to search queries.
Finally, the Court of Justice decided that money did not matter: “the mere facts that the referencing service is subject to payment, that Google sets the payment terms or that it provides general information to its clients cannot have the effect of depriving Google of the exemptions from liability” provided by the E-Commerce Directive.
The UK: Kaschke v Hilton
The scope of the hosting defence has also recently received a detailed review by the English courts in the case of Kaschke v Hilton. The case concerned a defamation action brought by Ms Kaschke in respect of a posting made by Mr Gray on a political website run by Mr Hilton.
Mr Hilton played an active role in relation to the website content taken as a whole. However, Mr Hilton’s role in relation to individual user-generated posts was more limited. Mr Hilton applied for summary judgment, claiming defence under Regulation 19 of the E-Commerce Regulations 2002, which implemented the E-Commerce Directive in the UK.
Chat rooms and the hosting defence
The judge held that there was a realistic prospect that Mr Hilton’s reliance on the hosting defence might fail at trial. In coming to this conclusion he made the following points:
- Is a chat room an information society service? The judge concluded that it was and, moreover, it consisted in the storage of information. Therefore there was a prima facie argument for the application of the hosting defence.
- Can user-generated content be mixed with other content? Next the judge had to consider the position if the offending material was posted together with other material generated by the website owner. Ms Kaschke had argued that the entire website and not just the page containing the defamatory material should be taken into account - i.e. it would only be possible to rely on the hosting defence if the posting were in an entirely separate section of the website. The judge dismissed this and confirmed that if a website includes both user-generated content and the operator’s own content, the operator can still make use of the exemptions in the hosting defence for those parts of the contents which are user-generated. In reaching this conclusion the judge referred to the case of Imran Karim v Newsquest Media Group Limited (Unreported, October 27, 2009; QBD) in which an allegedly defamatory remark had been made in the comments section following a newspaper article.
- Is it possible to moderate or edit some postings without losing the benefit of the hosting defence for other postings? Mr Hilton was in the habit of reviewing and amending. However, he did not do anything to the offending post. In the judge’s view the relevant information society service was the hosting of that particular allegedly defamatory post rather than the general storage of blog posts. Each individual post can be an information society service. The fact that Mr Hilton’s actions went beyond “mere storage” in respect of some postings did not necessarily mean that he lost the benefit of the defence in respect of other non-moderated user postings.
- Will moderation or editing result in the loss of the hosting defence? In operating the website Mr Hilton considered whether entries appearing on the “Recommended” and “Recent Blogs” lists on the homepage were suitable for promotion to a more prominent position. Upon such promotion, more detail was provided about the post, including the date and time and a preview of the post. The judge concluded that such activities went beyond “mere storage” so that the hosting defence would not be available to Mr Hilton if he had promoted the offending post. The judge also said that even the fixing of spelling or grammar in a post could cost the provider the protection of the hosting defence.
Conclusions on the hosting defence
Websites owners with user-generated content will take some comfort from these two decisions. The potentially expansive definition of information society services taken by the European Court of Justice is helpful, as is the fact that the courts will look solely at the allegedly defamatory material and not the entire website when deciding whether the hosting defence applies. However, the decision reminds website operators of the limits of this defence and the dangers in meddling with user-generated content.
Google v Louis Vuitton (Joined Cases C-236/08, C-237/08 and C-238/08) is available here.
Kaschke v Hilton [2010] EWHC 690 is available here.
By Laura Hatherley, London
