In recent years, e-commerce has undergone exponential growth. In 2016, the European e-commerce market exceeded the 500 billion threshold, with the United Kingdom contributing approximately 157 billion to this total. These figures demonstrate how important e-commerce is becoming to the expansion of the e-commerce regime and the bolstering of attempts to harmonize the EU ISP regulatory framework. It is crucial to take into account the liability regime with regard to the operations of ISPs and the various exclusions, while pushing for further uniformity.

Liability for online information can arise with respect to trade marks, privacy, copyright, and trade secrets, defamation and unfair competition. This article looks at the exemptions from EU electronic liability laws that internet service providers (ISPs) can take advantage of. The term "ISP" will be used in the article to capture providers of services as specified in Directive 2000/31. The article goes like this:

It starts off by defining an ISP and outlining what they do. Second, it talks about the legislative framework that controls ISP operations. Thirdly, it talks about the exceptions to ISP liability pertaining to their operations that are outlined in Arts. 12 to 15. The article ends by emphasizing the need to strike a balance between the obligations and actions of ISPs and the intellectual property (IP) rights of the owners of the materials that are shared via their platforms.

What is an ISP?

Many different internet services are offered by an ISP. Any individual or organization that offers an information society service (ISS) in exchange for payment via electronic means for the processing and data storage that is dependent on any electronic communication platform. Understanding what is meant by "ISS" is crucial to figuring out who is eligible to be an ISP. An ISS refers to "any service normally provided for remuneration, at a distance, by means of electronic equipment for the processing and storage of data, and at the individual request of a recipient of the service".

An Internet service provider will be protected from responsibility if it offers ISS. Exemptions offer an ISP protection from legal liability for both its own operations and the behavior of its platform users, which makes them essential. In the event that an ISP offers a service that is not an ISS, this activity will be controlled through national legislation. This is expensive and time-consuming problem since the ISP may have to assess multiple domestic legislation in order to determine the impact of its decision.

A few of the services mentioned in the definition are point-to-point information relaying (video on demand), online sales of items, networked communication links, information hosting by a service recipient, and services that are provided without charge to the recipient. It is crucial to note that the provision of services that broadly constitute an element of an economic activity satisfies the definition's requirement regarding compensation. For For example, the service might be offered for free, but by including advertisements on the page, the ISP could be able to recoup some of its costs. If the user and ISP are not in the same location, the distance criteria is met.

When a service is rendered using electronic equipment, the criteria for electronic communication is met. The delivery of the material by electronic means that, so long as there is internet connection, its reach will be undefined. Here, it's critical to emphasize that the utilization of technological tools to deliver the service does not, by itself, signify the provider's establishment.

The following services are included in the definition of an ISP: web design, web hosting, domain name registration, internet access services, and internet transit. By offering these services, the ISP exposes itself to possible legal exposure in the event that the recipient abuses the service. Third-party materials stored on the platform that are accessed by consumers or content given through the platform may give rise to potential liability. The consumer is someone acting for objectives unrelated to his or her trade. profession, or business, whereas the recipient of the service is defined as a natural or legal person using an information society service to obtain information or to make such information accessible.

legal regime governing the activities of ISPs

With the emergence of the internet, the focus shifted to ISPs to resolve legal issues, including privacy, consumer protection and IP rights protection. The issue that came up was, among other things, who is accountable for the content that is published, saved, and made available online, and to what degree. Who owns the platform that allowed the infringing material to be uploaded, or the individual who uploaded the infringing material themselves?

The internet sector was hampered by disparities in internet regulation and ambiguity about the applicability of national laws prior to the adoption of the E-Commerce Directive. The position presented to the European Commission (EC) was not acceptable. The increased use of the internet has opened up many new markets, and when used properly, it can help advance the EU's goal of harmonisation. The European Community realized that, in the absence of solutions, it may lose out on profitable deals to the United States, whose system was more developed and integrated. This led to the creation of Directive 2000/31, a new legislative framework is necessary.

In June 2000, the EU passed the E-Commerce Directive. By establishing a framework for the creation of ISS and fostering legal certainty through the coordination of national legal systems' operational frameworks for a common regulatory framework pertaining to electronic commerce, the directive aimed to bring the benefits of the internal market to electronic commerce. The directive was introduced to regulate the activities of participants in this regulatory space and to encourage greater harmonization of e-commerce regulations within the EU.

Regarding liability specifically, the directive seeks to improve service development within the EU and remove anti-competitive practices regarding ISPs' liability while acting as intermediates.
The European Commission additionally anticipates that the directive would promote the creation of industry-wide voluntary agreements to restrict access to illicit information.

It's critical to comprehend why the e-commerce legal framework was implemented as a directive rather than a piece of legislation. A directive is a piece of framework law that must be expanded upon in order to be implemented at the EU level. Put another way, a directive is mandatory with regard to the intended outcome, but individual Member States retain the authority to modify the legislation to conform to their own legal systems. However, once a regulation is put into effect, it does not provide nations with any leeway.

The European Commission (EC) used a directive to support e-commerce because it is more appropriate for accommodating the various national legal systems and for encouraging the creation of a unified strategy. To encourage harmonization of a legal system composed of several national legal systems and business agreements, a flexible piece of legislation is more appropriate. Through the regulation, the European Commission seeks to strike a compromise between freedom, the right to information, and the recognition of producers' rights to compensation for their laborious efforts under a competitive legal framework.

Liability of ISPs and the exceptions

ISP liability is covered by Directive 2000/31's Articles 12 through 15. A cursory examination of arts. 12�15 reveals that immunity pertains to the action or service, not to the person who provides it. This indicates that the regime is activity-based; an ISP may be held accountable for illegal content-related to some of its services, depending on the specifics; however, if the services fall under Directive 2000/31's Arts. 12-14, the ISP may be exempt from liability with regard to illegal content stored or transmitted through its platform.

For example, in the eBay case, the Advocate General said that whereas some ISP actions are not liable; others are. Those who are not covered by the exemption will continue to be subject to national liability laws in the member nations. The Advocate General recommended against holding eBay accountable for trademark infringements perpetrated by customers who utilize its hosting services.

Mere conduit
This section of the Directive deals with the actions that may subject an ISP to liability and the exclusions that apply in situations where an ISP only serves as a conduit. On behalf of content providers, an ISP is considered to function as a mere conduit, temporarily and passively assisting in the conveyance of information. For instance, millions of individuals in the UK rely on British Telecom's (BT) infrastructure to access internet services, which allows them to establish a connection to the internet.

If there are three requirements, are met, an ISP that offers internet connectivity may be exempt from liability in certain situations. They are as follows:

1. The ISP cannot start the transmission;
2. The ISP cannot choose who gets the information, and
3. The ISP cannot choose or alter the transmission.

Regarding the application of the liability privileges outlined in Article 12, There have generally been few issues. If the Internet service provider does not choose the recipient, initiate the transfer, interfere with the transmission, or alter the substance of the transmission, then the provider will not be held liable. The exemption clause will not be applicable if the ISP actively interferes.

However, the provisions of Art. 12(3) have an influence on Art. 12(1) to the extent that it states that a court in a Member State may instruct or require the ISP to stop infringement, notwithstanding the limitation of responsibility set forth in Art. 12(1). Despite the explicit provisions of Art. 12(1): This provision is very ambiguous and could result in access blockage by law enforcement authorities in EU Member States. Three nations have already benefited from this: Germany, Belgium, and the United Kingdom. Some ISPs have faced the danger of tougher regulations being passed to limit their capacity to provide access, while others have had access blocking orders issued to them under the terms of Art. 12(3).

In relation to the paragraph that came before it, it is appropriate to talk about whether it is lawful to order ISPs to use technology to prohibit illicit file-sharing. This matter is significant because it affects the expenses and procedures that the ISP must implement. In an attempt to compel Scarlet (previously Tiscali), an ISP, to install filtering software in order to limit the sharing and transmission of copyrighted music over Scarlet's network, the composers' association, SABAM, filed a lawsuit against Scarlet in Belgium. Any decision made by SABAM, a collecting society for musicians in Belgium and around Europe, will have repercussions for the entire EU.

Scarlet countered that the e-commerce Directive forbade the imposition of a duty, which would result from the installation of the filter. Scarlet does not offer any other services, such as file-sharing or downloading, to its clients; it just offers internet access. Scarlet was compelled to install filtering software to identify and prevent access to music that is protected by copyright, after the court dismissed her claim. Scarlet was ordered by the court to implement a technical solution that would stop consumers from utilizing file-sharing software to download copyrighted music unlawfully.

The court went on to say that the filter was solely installed in order to screen-specific data that was sent across Scarlet's network. It doesn't amount to a blanket prohibition or a monitoring obligation. The court's decision implies that Internet service providers (ISPs) have both a technical and legal obligation to address the spread of illegal content across their networks. This ruling gives rise to grave concerns.

It appears that the court is arguing that filtering software is not the same as surveillance, Art. 12, which recognizes and offers ISPs immunity while acting as "mere conduits," is in contrast with this. The Belgian court's rationale, which requires an ISP to monitor electronic communications going via its network for an indefinite amount of time at their own expense, especially when such communications involve the use of peer-to-peer software, it is hard to to concur with.

It's interesting to note that the Court of Justice of the EU (CJEU), formerly the European Court of Justice (ECJ) was asked a question pertaining to this exact topic through the preliminary ruling procedure. The court took advantage of this opportunity to provide clarification on the law regarding ISPs' obligations to install filtering software.
According to the court, asking ISPs to implement filtering software in order to Enforcing copyright is irrational.

Caching

The act of sending data at the request of a recipient who temporarily Saving it in order to send the same data more effectively is known as caching. Better internet speeds are made possible by this, as other users' space is freed up by the effective utilization of server spaces and internet cables. ISP immunity is predicated on multiple elements in this case. First, immunity is dependent on the ISP updating information about terms of use in compliance with industry standards on a regular basis and refraining from altering data that is transmitted over the network.

However, the conditions for immunity from responsibility are more stringent if the ISP retains the data for a longer amount of time than what is required by Art. 12(2). The intent of Art. 13 on caching is to safeguard ISPs against content that does not originate from them but is momentarily kept on their servers to guarantee content availability and the steady operation of the internet.

Hosting liability

In comparison with information stored on a transient or short-term basis As discussed in the immediately preceding paragraph, hosting relates to an extended or permanent storage of information. It is crucial to take into account the definition of hosting in order to comprehend the scope of the liability and exemption granted under article 14. It's also critical to comprehend the requirements for user qualification, the knowledge required to revoke an ISP's immunity, and the timeliness with which an ISP is expected to remove unlawful content.

Numerous and diverse providers have been subject to Article 14, including those who run social media platforms, online chat rooms, online markets, and interactive websites, and blog services.

This is significant to keep in mind because these internet services are powered by various operating and commercial strategies. Article 14 discusses the hosting service providers' liability. Numerous diverse tasks fall under the umbrella of hosting. ISPs keep information supplied by service recipients in a location called hosting. Typically, hosting consists of user-uploaded HTML pages on websites. In order for users to access the website, the host supplies the server, which includes the processor and disk space. Put differently, the person receiving the service creates the content and uploads it to a server so that users can easily access it. The server's connection to the internet is facilitated by this operation.

Unlike a publisher or distributor, the host is essentially an infrastructure supplier. However, this cannot be said of the web 2.0 service provider, which enables involvement on a level that was unthinkable at the time Directive 2000/31 was established.

In order to be eligible for exemptions under Article 14 of Directive 2000/31/EC, an ISP must meet four requirements. These are as follows:

1. the service must be eligible as an ISS;
2. the service involves information storage;
3. the information is supplied by the person who receives it, and
4. the information provider does not genuinely know or is unaware that the information is unlawful.

The first requirement relates to the ISP's provision of the option for customers to gather and store data on its platform. Any ISP offering ISS that consists of the "storage of information," which is granted protection by the directive. Information storage refers to holding, preserving, or storing data on a server.

The exemption system has grown in significance as server hosting has become more complex. In this sense, the eBay UK case is especially illuminating. The Advocate General distinguishes between two scenarios: one in which eBay allows customers to put products for sale on its online sales platform, and another in which eBay utilizes the data to buy Google keyword advertising. eBay offers information storage services in the first place.

In light of this, the Advocate General pointed out that eBay was only offering hosting services by doing this. Conversely, the operator does not retain such information when eBay uses a paid referencing system, like Google Ad World, in conjunction with a protected trade mark sign. eBay isn't offering hosting services in this case. Its operations are therefore not covered by the exemptions.

Regarding the recipient of the service criterion, it is established that the ISP forfeits its liability privileges in cases where an individual is functioning under its supervision. Under an employer-employee relationship, this is feasible. Stated differently, the host must possess a certain level of autonomy in order to assert the exemption clauses.

Users are accountable and liable for any offensive or unlawful content hosted on the ISP's platform, regardless of the content provided by the service recipient. Web 2.0 services, however, muddy this picture. Because Web 2.0 is interactive, users can submit content and communicate with one another in real time. time, which lessens the importance of the ISP. Compared to the conventional web page infrastructure and user interface that people were accustomed to, Web 2.0 offers considerable advancement.

It poses many issues by encouraging user participation beyond what is required by law. The issue of who is responsible for the content uploaded on the platform that the ISP makes accessible presents the biggest obstacle. It It gets harder to tell the difference between the platform user and the ISP at this point. This is so that the user can accomplish more than previously imagined feasible thanks to Web 2.0. This presents problems for the ISP's exemption rights. In order to achieve this, it's crucial to develop crucial mechanisms for online platform management and for regulators to comprehend how the web infrastructure is evolving.

Hosts typically don't authorize anything before it is hosted on their systems. ISPs must maintain their neutrality in order to be eligible for exemption rights. When an ISP receives notification of illegal or infringing content and has a reasonable amount of time to delete it, they will be deemed to have knowledge of the matter.

After notice, ISPs are given a fair chance to take down illegal or infringement-related content that they have hosted. In addition to having the authority to remove unlawful information from servers in In the past, ISPs are also immune from liability resulting from third-party acts as long as they can demonstrate that they were aware of the illegal content placed on their servers but took no action to remove it.

Conclusion
Due to the internet's widespread use and the services it supports, the protection of ISPs' immunity from liability must be weighed against the rights of individuals who should be compensated for their intellectual labor. EU regulators are still fighting to ensure material access, IP rights protection, freedom of information, and ISP liability.

The liability framework and the exclusions that ISPs have while providing services to users have been discussed in this article. It started by outlining what an ISP is and outlining the legislative framework that controls its operations.

The liability regime and the ISP exemptions were then covered. When it comes to fostering the growth of online services, the responsibility framework and the exclusions granted by the Directive are crucial.

ISPs offer a platform for distributing information quickly and widely. with benefits and drawbacks based on where a specific party stands in the commercial or user split. The essay explored the case for a liberal reading of the EU Directive's provisions, arguing that ISP liability laws were intended to capture and offer protections for ISPs to encourage service delivery, rather than to limit and regulate their operations.

The liability rules insulate Internet service providers (ISPs) from potential liability resulting from the large volume of illegal items and content that flows over their networks. The Directive includes requirements that ISPs might utilize to insulate themselves from responsibility resulting from the actions of the users on their platforms.

In order to guarantee both, ISPs will persist in promoting unfettered and unrestricted access and that intellectual property owners will receive a Just as a reward for their labor, the ISP liability regime must be carefully constructed and balanced. The ISP can engage in the activities listed in the exclusions without worrying about facing legal action or the potential catastrophic financial consequences of being held liable. This is due to the fact that the IP rights holder of the content distributed through the platform will be entitled to compensation in cases where the ISP is held liable for materials housed on its platform.

The objective is to efficiently oversee the hosting and distribution platform while keeping the ISP's role as a hosting or service provider in mind. This is significant because, in many cases, it might be expensive and time-consuming for the regulator to identify the person who started the illicit content but only used the ISP's platform. Conversely, if excessive limitations on the liability system are redirected to avoid impeding their operations, ISPs can maintain their growth trajectory.

It will be a costly and difficult endeavor to expect ISPs to examine every piece of content that is hosted or published on their network. Finding the correct balance is difficult, but it is preferable to err on the side of the authors' information rather than charge the platform's facilitators for their services. It could be preferable to refocus efforts on the information platform users about the need to respect authors' intellectual property rights and abstain from distributing anything that is protected by copyright.

This procedure will minimize the quantity of data that ISPs must transfer and be more economical. Additionally, rather than holding the facilitator liable, the burden of proof will now fall on the person who originally disseminated the content. It is imperative to consistently adjust and adapt the ISP liability and exemption regime in order to accommodate the ongoing advancements in web services.

References:
Books:

1. PAVAN DUGGAL: Textbook on Cyber Law (Second Edition) ✓ Information Technology Act, 2000
2. Sharma Vakul, Information Technology Law and Practice, 2nd edn. (Universal Law Publishing Co Pvt Ltd, New Delhi), 2007, 18-19, and 191-192

Journals and Articles:

1. Priyambada Mishra and Angsuman Dutta, "Striking a Balance between Liability of Internet Service Providers and Protection of Copyright over the Internet: A Need of the Hour"25: Journal of Intellectual Property Rights, 321 (2009)
2. Smith, J H Graham, Bird & Bird, Internet Law and Regulation, 3rd edn (Sweet & Maxwell, London), 2002, 1-12.
3. Dr. Heena Basharat, "Liability of Internet Service Providers, 43 Baltic journal of special Education 38 (2022)
4. Clark David, Design and Operation of the Internet, October 1997, p. 16 (point 3.11)
5. Shah A, The Information Technology Act, 2000: A legal framework for e-governance, www.sudhirlaw.com/cyberlaw-it act (18 February 2009).

Websites:

1. Liability of ISPs, available at http://www.eff.org/Legal/ISP_liability/OPG_v_Diebold/
2. ISPs and the liabilities involved, available at http://www.webopedia.com/TERM/I/SP.html
3. India: Internet Service Provider�s Liability For Copyright Infringement, available at https://www.mondaq.com/india/copyright/21249/internet-service-providers-liability-forcopyright-infringement