The Digital Economy Act, a controversial new law to tackle online piracy in the UK, has been backed by the High Court, despite complaints from ISPs.
Telecoms providers BT and TalkTalk have lost an attempt to block aspects of the Digital Economy Act, which they see as placing undue responsibility on them for tackling illegal filesharing.
But ruling judge Mr Justice Parker dismissed all the claims, except for one relating to the costs order, when he removed the ISPs’ obligation to pay 25% of watchdog Ofcom’s costs and the costs of establishing an appeals body.
The high-court ruling can be seen as a victory for record companies, film studios and other rights holders, who have lobbied intensively for greater legal powers to stem piracy.
The Digital Economy Act 2010 is aimed at clamping down on illegal internet file-sharing and protecting intellectual property rights on the web.
Copyright infringements online are thought to cost the UK economy £400m a year, and supporters of the legislation said they were “delighted” with the ruling.
They said it would be a major boost to people in the creative industries whose livelihoods were put at risk because their output was being stolen “daily”.
The DEA Act- How it could work
Measures could include sending letters to people identified as downloading illegal content and asking them to stop and pointing out legal alternatives. At the end of the 12 months there will a review. If illegal downloads do not fall (by at least 70%) Ofcom will be asked to consider whether technical measures – which could include limiting the speed or capacity of an individual’s service or temporarily suspending their service – are needed.
A step-by-step process:
• ISP customer illegally downloads a file
• The law-breaking part actually comes specifically from the source not having the permission of the copyright holder to put it online in the first place.
• ISPs use their technology to identify copyright breaches linked to the customer.
• Once discovered the ISPs may be asked to reveal the customer’s IP address which could uncover your location.
• With this information action could then be taken against the customer.
• The first step is a notification letter sent to the customer’s home.
• If this warning is not heeded then the customer could have their internet speeds slowed down.
• Persistent offenders may have their connection temporarily suspended.
The judge rejected claims by BT and TalkTalk, two of the UK’s largest internet service providers (ISPs), that the Act was seriously flawed and “incompatible” with European law.
The two ISPs had argued that measures introduced under the Act would unlawfully “impact on the privacy and free expression rights” of consumers, and interfere with customer relationships.
The judge said in his ruling that “from the point of view of both copyright owner and subscriber, the DEA represents a more efficient, focused and fair system than the current arrangements”.
“The DEA proceeds on the premise, first, that a significant number of infringers do not at the moment fully appreciate that what they are doing seriously infringes the legal and moral rights of others and that, although individual behaviour of this kind may seem trivial and excusable, the general effect may well be very damaging to the creative industries, a notorious example of what is sometimes called the tyranny of small decisions that have ruinous economic consequences,” he said.
“Although it is difficult to predict the effect of measures such as those contemplated by the DEA, there are reasons for believing that such measures may well have positive effect.”
BT and TalkTalk also said the new law, brought in by the Business Secretary Vince Cable, could potentially putting the privacy of millions of innocent customers at risk.
They also challenged the legality of the statutory order, currently before Parliament in draft form, designed to regulate sharing the costs of implementing the new legislation.
The new legislation went through in the final days of the last Labour government.
It was first mooted by then business secretary Lord Mandelson who launched a crackdown just days after spending time on the yacht of a leading critic of illegal file sharing, record label founder David Geffen.
The coalition decided not to repeal it and is now working on implementing elements of the Act.
A spokesman for the Department for Culture, Media and Sport said: “We are pleased that the court has recognised these measures as both lawful and proportionate. The Government remains committed to tackling online piracy and so will set out the next steps for implementation of the Digital Economy Act shortly.”
A BT spokesman said: “We are disappointed with the outcome of the judicial review. We are reviewing this long and complex judgment. Protecting our customers is our number one priority and we will consider our options once we have fully understood the implications for our customers and businesses.
“This was always about seeking clarity on certain points of law and we have to consider whether this judgment achieves these aims.”
TalkTalk said it was “disappointed” and that it was considering an appeal, potentially taking its case to the European Court of Justice, while content owners welcomed the ruling.