18 April 2018

The Role of Hosting Providers (No. 2)

Our series "Online Enforcement" deals with particularities in the enforcement of rights on the Internet.

In the case of online infringements, content removal regularly has priority for the rights holder. Swiss industry standards enable hosting providers to block access to their customers' infringing content.

Removal as a priority
Advertising under third-party brands, the unauthorized use of copyrighted texts or images as well as defamatory statements are common categories of infringements on the Internet. Online publications may be severely harmful, as they spread quickly and at low cost. A resulting damage, e.g. market confusion and reputational harm, is often difficult to compensate for. Right holders would like to remove the corresponding content as quickly as possible. Fast removal often takes priority over the enforcement of claims against the responsible person.

The identification of website operators or domain holders is often difficult (see our article in the "Online Enforcement" series). In addition to the publishing person (the content provider), however, other people are involved: Access providers allow the content provider to access the Internet. "Traditional" hosting providers offer software applications or Internet services and provide their customers, e.g., with storage space for their website content. Hosting and access providers are not as close to the material as content providers. From a purely technical point of view, however, hosting providers are regularly in a position to (temporarily) block access to the content concerned.

Unclear obligations of hosting providers
Infringements on the Internet have cross-border effects and the actors involved are often located in different countries. Neither rights holders nor intermediaries such as hosting providers are capable of mastering the different international approaches and rules for the liability of hosting providers and other intermediaries. Hosting services, which might be subject to particular liability rules range from hosting of websites with the provision of server storage to the operation of platforms (e.g. Google, Twitter, Facebook), whereby the definitions of content, hosting and access providers are not clear-cut. The map on liability of intermediaries provided by the Center for Internet and Society (CIS) of Stanford Law School in California, USA, offers a good overview of the current national rules.

Swiss law does (currently) not provide for any specific civil or criminal law rules regarding the liability of hosting or access providers for their customers' infringing content. Similarly, Swiss law does not provide for immunity rules in favor of hosting providers (other than e.g. the USA). In the most relevant ruling by the Swiss Federal Court to date (BGer 5A_792/2011), the newspaper company Tribune de Genève had an obligation to remove blog posts by third parties violating personality rights. The decision does, however, not provide the basis for an actual liability for damages by the hosting provider towards the injured third party. In particular, such claims would require an actual fault of the hosting provider.

Dilemma of hosting providers
Hosting providers in Switzerland primarily bear liability risks towards their clients, to whom they undertake to provide the agreed services carefully. Hosting providers are, therefore, reluctant to block content. Hosting providers have, however, their very own interest in not making their products and services available for reputation damaging or even illegal practices. In this dilemma, hosting providers are regularly unable to decide, which party has the better rights (and arguments) in a dispute – if not simply for capacity reasons. Hosting providers based in Switzerland are primarily small and medium-sized enterprises. They regularly do not have their own legal or compliance department and cannot exercise a judicial function (see also the Federal Council report on "The civil liability of providers" of December 11, 2015 in German, p. 7 f.).

Efficient and effective self-regulation
In order to enable an efficient removal of infringing content, while at the same time protecting the legitimate interests of content providers, Swiss hosting providers have (already in 2013) implemented an industry standard in the form of a "Code of Conduct Hosting" (CoC Hosting) of the simsa Swiss Internet Industry Association.

The "Notice-and-Notice" procedure allows rights holders or affected persons to inform the hosting providers of their customer's allegedly infringing material by means of a formal Notice. The hosting provider forwards the Notice to the customer with the request either to remove the criticized contents or to submit a statement (Counter Notice) to the third party within a defined deadline.

In the "Notice-and-Takedown" procedure, the hosting provider may (temporarily) block access to the affected website in whole or in part at its own discretion (Takedown), with or without requesting a prior statement by the customer. The hosting provider may also (directly) block content, e.g. in clear cases or if it appears very likely that illegal content is concerned, or if the hosting provider itself could be criminally responsible or liable under civil law. In any case, the hosting provider informs his customer immediately before or after the blocking. The hosting provider makes the decision at its own discretion and on a layman's scale. This particularly includes the free decision whether to inform the responsible authorities (e.g. the Federal Cybercrime Coordination Unit KOBIK). The corresponding exclusion of liability and the authority of the hosting providers to block content according with the CoC Hosting are usually part of the contractual arrangements with the customer.

The CoC Hosting has proven effective in practice. However, the instruments of the CoC Hosting fail where content is shared via peer-to-peer networks rather than stored on hosting provider servers. Even in pure hosting situations, however, the Swiss self-regulation only comes into play with hosting providers following the industry rules voluntarily. Moreover, infringing publications on the Internet are not oriented along national borders.

New obligations in copyright law
The proposal for a revised Swiss copyright law (Federal Act on Copyright and Related Rights, Copyright Act, CopA; see the draft of the new CopA in German) does not solve the problem of international infringements on the Internet. However, the current draft foresees concrete obligations for hosting providers (and access providers) in order to enforce copyrights more effectively in case of of online infringements. Hosting providers pursuing a business model that depends on copyright infringements must ensure that content stays down once it has been removed (cf. Art. 39d draft of the new CopA and Message of the Federal Council on the revision of the CopA, BBl 2018 591 600).

In addition to the specific new rules for copyright, Switzerland will (for now) not adopt any general legal obligations and liability rules for hosting providers (cf. the Federal Council's report on civil law already 2015). Rights holders or affected subjects can contact the hosting provider in Switzerland using the efficient system of self-regulation, in order to get infringing material blocked at least temporarily (until the dispute has been settled in court or an official order is issued).

Our previous article in the series "Online Enforcement" addressed the role of the WHOIS directory. The next article is devoted to the proposed obligations of hosting and access providers in the revised Swiss Copyright Act. If you have any questions about this blog post or online enforcement, our intellectual property team will be glad to assist you.

Author: Delia Fehr-Bosshard

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