Wednesday, August 3, 2011

Czech republic: Liability of the Website for Third Party Comments

Huťko knows that this article should have been here since May already, but he begs your pardon and hopes to redress this wrong in the following lines.

On 17 March 2010, the City Court of Prague rendered probably the first Czech decision that involved the hosting safe harbor - so called Prolux case (10 Cm 47/2009-39). Huťko's article is here and the fist instance ruling here.

As parties filed appeal, the case got the Hight Court in Prague ("the Court"). On 3 March 2011, the Court issued its appeal judgment partially confirming the first instance ruling. The Court however took slightly different view on the interpretation of the hosting safe harbor, which he also elaborated in a more detail; Huťko's article is here and the second instance ruling here.

So what's the story?

Plaintiff (Prolux Consulting) is a real estate agency and Defendant the owner of a website about personal finance – www.mesec.cz; In course of one of the users discussions, unknown users left several comments just below Defendant's article “Do you want to sell an apartment: yourself or with an estate agency?”. The comments were quite negatively describing their customer experience with services of Plaintiff.

Plaintiff learned about these comments, notified the Defendant and requested their take down. He claimed that some of the comments infringed upon his goodwill. Defendant refused to take them down arguing that he can not thoroughly assess the notice as respective comments might be true and therefore not infringing at all. Plaintiff therefore brought the case before the City Court of Prague requesting removal of the entire discussion thread as well as financial compensation of 50.000 CZK (equals to approx. 2050 EUR). The City Court of Prague decided that defendant shall remove entire conflicting discussion thread. Defendant appealed claiming that even if the comments were infringing, there is no need to remove entire discussion thread as he can remove only the conflicting comments or words; Plaintiff also appealed arguing that financial compensation shall be granted too. This brought the case to Higher Court in Prague (Vrchní soud v Praze). This Court eventually ruled that only few words have to be removed from the entire discussion thread and again awarded no compensation due to lack of Plaintiffs arguments. Especially assessments of this Court are of high importance. But let’s have a look into the Czech regulation framework first.

In Czech republic, eCommerce Directive has been transposed into the Act No. 480/2004 Sb., on Certain Services of the Information Society (ACSIS). Relevant provisions read as follows:.

Section 5 (Hosting Safe harbor)
(1) A provider of a service that consists of the storage of information provided by a user, shall be responsible for the contents of the information at the request of a use only if he could with regard the subject of his activity and the circumstances and nature of the case, knows that the contents of the information stored or action of the user are illegal; or having in the provable manner, obtain knowledge of illegal nature of the information stored or illegal action of the user, failed to take, without delay, all measures, that could be required to remove or disable access to such information.

(2) A service provider referred to in paragraph 1 shall always be responsible for the contents of the information stored if he exerts, directly or idirectly, decisive influence on the user’s activity.

Section 6 (No-monitoring obligation)
Service providers referred to in Section 3 to 5 shall not be obliged to
a) monitor the contents of the information they transmit or store,
b) actively seek facts or circumstances indicating to illegal contents of information.

As you can see, section 5 of the ACSIS, which implements the art. 14 of eCommerce Directive, substantially differs from the Directive in two ways:
a) it reads “if .. then provider is liable” not “if .. then they loose safe harbour”;
b) the order of knowledge standards is reversed (actual and constructive knowledge);

Huťko guess that this might have contributed to the outcomes of appelate‘s Court interpretation. So finally, what are these interesting findings?

  • loosing hosting safe harbour automatically triggers civil liability of hosting provider;
  • knowledge of illegal nature of the information is decisive, not the knowledge of their pure existence; this is in line with para 109 Google France C-236/08;
  • actual knowledge is broader in scope than constructive knowledge; By contrast to the constructive knowledge which requires illegality to be apparent to the service provider, to trigger the actual knowledge, mere disputability of the illegal nature of information might be enough (in case of such „plausibly illegal information“ provider can not wait until the court finally resolvs the dispute, but have to act expediciously in order to retain hosting safe harbour).

For further reading on Czech eCommerce transpozition Huťko recommends an article by Radim Polčák (Head of the Institute of Law and Technology of Masaryk University). However, Huťko shall note that he strongly disagrees with this part: "The preliminary injunctions can be issued only against subjects with potential passive procedural capacity, i.e., subjects that are potentially legally liable. When Act No. 480/2004 Sb. exempted mere conduit providers from responsibility, it exempted them to the same extent also from the scope of applicability of the preliminary injunctions. Thus, it is not possible to impose a preliminary injunction against an ISP in a situation when the legal exemption in Act No. 480/2004Sb. applies." Preliminary injunctions are based on procedural law and procedural requirements (danger of inevitable damage, etc.) and are not the excersise of claims arising from civil liability (e.g. claim to cease the illegal conduct). Therefore possible coverage by safe harbor is not relevant in this case. Even non-infringing third party can be the adresee of the preliminary injunction (in fact this is also the requirement of art. 11 of Enforcement Directive). For furher discussion of the nature of preliminary injuctions in Slovak/Czech law please refer to this forum.

For Huťko's further comments on case please refer to Brief commentary on the Prolux case [Krátky komentár k prípadu Prolux] In Revue pro právo a technologie č. 3/2011 - available here.

Update. Another very good English written commentary on this case is provided by Vojtěch Chloupek from Birds and Birds.

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