Digital Economy Act 2010

Digital Economy Act 2010

Parliament of the United Kingdom
Long title
Statute book chapter 2010 c 24
Introduced by Lord Mandelson
Territorial extent England and Wales, Scotland and Northern Ireland
Dates
Royal Assent April 8, 2010 (2010-04-08)
Commencement
  • April 8, 2010 (2010-04-08) (part)
  • June 8, 2010 (2010-06-08) (part)
  • pending (part)
Other legislation
Related legislation Copyright, Designs and Patents Act 1988, Communications Act 2003, Video Recordings Act 1984
Status: Current legislation
Text of statute as originally enacted
Official text of the Digital Economy Act 2010 as in force today (including any amendments) within the United Kingdom, from the UK Statute Law Database

The Digital Economy Act 2010 (c. 24) is an Act of the Parliament of the United Kingdom regulating digital media. Introduced by Peter Mandelson, Lord Mandelson, it received Royal Assent on 8 April 2010, and came into force on 8 June 2010 (with the exception of certain sections that came into force on 8 April; and certain other sections that will be brought into force by statutory instrument).[1]

The act has been subject to judicial, parliamentary and regulatory review since coming into force.

Contents

Contents

Online infringement of copyright

Section 3 to 16

The Act's provisions against the act of copyright infringement proved controversial.[2] It establishes a system of law which aims to first increase the ease of tracking down and suing persistent infringers, and after a minimum of one year permit the introduction of "technical measures" to reduce the quality of, or potentially terminate, those infringers' Internet connections. It also creates a new ex-judicial process to handle appeals.[3]

The new process, which will come into force when Ofcom's regulatory code is approved by Parliament, begins with rightsholders gathering lists of Internet Protocol addresses which they believe have infringed their copyrights. (This data could be gathered most easily by a rightsholder connecting to a Peer-to-Peer download of a work they own, and noting the other IP addresses to which their computer connects.) They would then send each IP number to the appropriate Internet Service Provider (newly-defined in the Act as a provider of IP addresses[4]) along with a "copyright infringement report".

The ISP must then send a notification to the subscriber in question. The conditions under which this is required (i.e. the standard of evidence required) are not specified in the Act, but left to Ofcom's regulatory code. The receipt of the infringement report and its recipient are noted by the ISP, if valid, but no further action is taken.[5]

The next stage in proceedings involves the rightsholder requesting a "copyright infringement list" from the ISP. This contains an anonymous list of all subscribers who have "reached the threshold set in the [Ofcom] code" with regard to infringement reports for their works.[6] The rightsholder can then approach a judge to gain a court order to identify some or all of the subscribers on the list, and with that information launch standard copyright infringement litigation against them.

Ofcom's code

Most operational details of the copyright infringement provisions are not defined in the Act, but left to a series of regulatory codes produced by Ofcom. The Act defines only the utmost limits within which these codes can work. On May 28, 2010 Ofcom published a draft initial obligations code for consultation.[7]

According to the Act Ofcom must produce "progress reports" once every three months on the levels of copyright infringement in the country, with a larger report coming once every 12 months.[8]

Technical measures

After Ofcom's code has been in force for one year, the Secretary of State becomes able to lay down an order for ISPs to impose "technical measures" on subscribers who meet the copyright infringement report threshold (see above). These measures may limit Internet access in any way, including suspending it entirely. Unlike other areas of the Act Ofcom do not produce a code that defines what the measures are (though they are responsible for enforcing them): instead the Secretary of State decides all specifics, needing only to "take into account" Ofcom's recommendations.[3]

Appeals

The Act requires the provision of an independent appeals process, covering the grounds on which infringement reports are made. Cases are heard by a body set up by Ofcom, or if a technical measure has been applied a First-tier Tribunal.[9]

Unlike in judicial appeals, the subscriber is innocent until proven guilty: the Act states that "an appeal on any grounds must be determined in favour of the subscriber unless the copyright owner or internet service provider shows that a) the apparent infringement was an infringement of copyright, and b) the report relates to the subscriber’s IP address at the time of that infringement". An appeal will also succeed if the subscriber can show that the rightsholder or ISP broke Ofcom's regulatory code in any way.[9]

Obligations on ISPs and copyright holders

The Act gives Ofcom the responsibility of enforcing ISPs' obligations. A fine of up to £250,000 can be levied on ISPs in contravention; that limit can be raised by the Secretary of State with Parliament's consent.[10]

The Act also allows the Secretary of State to define, with the consent of Parliament, the "sharing of costs" incurred from the Act's legal processes. The order can require reimbursements to be made by rightsholders and/or ISPs, and in the case of appeals, subscribers.[11]

Section 17 and 18 - Blocking Internet locations

The Act allows the Secretary of State - with the consent of the Lord Chancellor, upper and lower houses of Parliament and a court of law - to block access to a location on the Internet "from which a substantial amount of material has been, is being or is likely to be made available in infringement of copyright", or a location which "facilitates" such behaviour.[12]

In deciding whether to grant an injunction, the court is required to consider:

  • Steps taken by the operator of the location to prevent infringement
  • Steps taken by the copyright owner to facilitate lawful access to the material
  • Any representations made by a Minister of the Crown
  • Whether the injunction would be likely to have a disproportionate effect on any person’s legitimate interests
  • The importance of freedom of expression

The Secretary of State must be satisfied before making the request that the location is "having a serious adverse effect on businesses or consumers", that the injunction "is a proportionate way to address that effect", and that "making the regulations would not prejudice national security or the prevention or detection of crime".[12]

Other provisions

Other provisions in the Act include an amendment to the Copyright, Designs and Patents Act 1988 to increase the criminal liability for "making or dealing with infringing articles" and "making, dealing with or using illicit recordings" to a maximum of £50,000, so long as it is done during the course of a business.[citation needed]

Regulation of content is also in the Act, which adopts the Pan European Game Information (PEGI) standard for video game ratings. The UK government is also able directly to intervene to control the use of the UK's domain name space, currently overseen by the independent body Nominet.[citation needed]

The Act also includes changes to DAB radio in the United Kingdom including the reorganisation and merging of some of the local DAB ensembles[13] and a requirement for a digital switchover of terrestrial radio in the United Kingdom.[14]

Further measures included:

  • The management of .uk Internet domain registries
  • The functions of the Channel Four Television Corporation
  • The regulation of television and radio services
  • The regulation of the use of the electromagnetic spectrum
  • The Video Recordings Act 1984
  • Public lending right in relation to electronic publications (Authors receive a 10p royalty for physical books lent from UK libraries but not ebooks. This act extends that royalty to cover some ebooks and audio books lent by libraries electronically. However the appropriate legislation has not yet been amended for this to take place. http://www.plr.uk.com/registrationservice/faq.htm#sound )

History

The Digital Economy Act followed the Digital Britain report of 2009,[15] a policy document which outlined the United Kingdom Government's strategic vision for its digital economy. Lord Carter, the former Digital Britain minister and Downing Street special adviser spent eight months considering the matter along with 25 civil servants for the report, released in June 2009. However, the proposed bill reversed Lord Carter's recommendation against cutting off internet access for alleged copyright infringement.[16] The Digital Economy Bill was announced in the 2009 Queen's Speech before the United Kingdom parliament.[17] The first reading of the bill was presented to the House of Commons of the United Kingdom on 16 March 2010.[18] The bill received its second reading on the 6 April 2010 in a Commons debate and was given support by the Conservative front bench[19] and as expected[20] was not debated at length in the Commons, and was instead pushed through in the wash-up period. It passed third reading on 7 April[21] with Royal Assent granted on 8 April. As of 12 June 2010, the Act is now in force.

Decision to include technical measures in the bill

In August 2009 Lord Mandelson has been accused of caving into a "big lobbying operation" after ordering for disconnection to be included in the Digital Economy Bill even though the Digital Britain report had rejected this type of punishment.[16] The Independent reported that according their Whitehall sources First Secretary of State Peter Mandelson was persuaded that tough law were needed to reduce online copyright infringement following an intensive lobbying campaign by influential people in the music and film industry.[22] The paper also reported that this included a meeting with DreamWorks co-founder David Geffen at the Rothschild family villa on the Greek island of Corfu. Lord Mandelson's spokesperson claimed that there had been no discussion of internet piracy during the Corfu dinner and suggested that the decision to reverse Lord Carter's findings had been taken in late July before the trip.[23] The Times reported after the Corfu meeting that an unnamed Whitehall source had confirmed that before this trip, Mandelson had shown little personal interest in the Digital Britain agenda, which has been ongoing for several years. According to The Times, Mandelson returned from holiday and effectively issued an edict that the regulation needs to be tougher.[24] At the time Mandelson denied that the two events were linked.[23]

In August 2011 a Freedom of Information (FOI) request showed that Lord Mandelson had decided to approve the inclusion of technical measures, such as the disconnection of internet access, at least two months before public consultation had finished, and that he had shown little interest in the consultation. Letters from Lord Mandelson's office document talks with Lucian Grainge, CEO of Universal Music Group on the 2 June 2009, and that on the following day Lord Mandelson advised Lord Carter about the "possibility of [the Secretary of State] having a power to direct Ofcom to go directly to introduce technical measures". Mandelson made the formal announcement that technical measures, including disconnection, were to be included in the Digital Economy Bill two months later on the 7 August 2009.[25]

Wash-up

After the general election had been called, and before the dissolution of parliament the Digital Economy Bill entered what is called wash-up. The wash-up is an accelerated parliamentary process used after general elections have been called to rush unopposed legislation through parliament before dissolution. During the wash-up Conservative and Liberal Democrats introduced Clause 17 on website blocking for copyright infringement into the bill. Clause 17 was initially proposed by Liberal Democrats in the House of Lords, however Liberal Democrat parliamentarians subsequently tried to retract the amendment. Clause 17 was further amended in wash-up and became law as Sections 17 and 18 of the Act. Website blocking was not part of the approach proposed in the Digital Britain Report. In return for supporting the Digital Economy Bill in the final wash-up vote the Conservatives demanded the removal of Clause 43 which related to orphan works, copyrighted works for which the copyright owner cannot be located, which had been criticised by photographers. Other clauses that were removed during wash-up included provisions for the funding of regional news consortia.[26]

Criticism of copyright infringement provisions

Stop Disconnection image used by the Open Rights Group during the campaign against the Digital Economy Bill, now the Digital Economy Act 2010

The Secretary of State Lord Mandelson was widely believed to be responsible for the copyright infringement provisions that would see the disconnection of internet connections associated with copyright infringement by copyright owners. The provision of the bill which gives the Secretary of State the power to introduce such technical measures were highly controversial and were criticised by digital rights campaigners. Jim Killock, executive director of the Open Rights Group called the bill "an utter disgrace. This is an attack on everyone's right to communicate, work and gain an education." He said that "politicians have shown themselves to be incompetent and completely out of touch with an entire generation's values".[26]

The Open Rights Group, privacy and consumer rights organisations criticised the online copyright infringement provisions of the bill, now section 3 to 18 of the Act, due partly to its proposal of a graduated response scheme, which may (if regulators and parliament feel the Act is not having enough impact) eventually reach as far as disconnecting Internet accounts used for persistent copyright infringement.[3][27] The Group took their concerns to the House of Lords.[28] Concerns have also been raised about the impact on businesses offering Internet access to their customers, such as libraries and universities.[29]

38 Degrees, who worked with the Open Rights Group to mobilise opposition to the act, state that over 22,000 people have emailed their MPs through their web site. 38 Degrees have also raised over £20,000 in donations to fund newspaper ads against the bill.[30] More than 35,000 people signed a Number 10 petition,[31] started by Andrew Heaney at ISP TalkTalk, objecting to being disconnected without fair trial. Over 100 people protested outside Parliament on 24 March 2010, including Labour MPs Tom Watson and John Grogan, Liberal Democrat prospective parliamentary candidate Bridget Fox, and writer and activist Cory Doctorow.[32][33]

TalkTalk, Britain's second-largest ISP, has been a vociferous critic of the Act. They opposed it from its earliest stages by staging media events,[34] declaring that they would fight against the new laws in court, and commissioning research to demonstrate that music fans would simply transition to other, non-P2P tools (such as "applications which scan thousands of internet radio stations and download the desired tracks").[35] TalkTalk have also argued that the requirement in Ofcom's draft code of conduct that only ISPs with 400,000 customers or more would initially be subject to the Act "could [lead to] huge swathes of customers moving to smaller ISPs to avoid detection". BT said that they felt compelled to act "for our customers who otherwise run the risk of being treated unfairly".[citation needed]

Political opposition

The UK's three major parties played a part in the passing of the bill into law, the Pirate Party UK were strongly opposed to it.[36] The Green Party, whose Members of the European Parliament (MEPs) sit with the two Swedish Pirate Party MEPs in the same group, opposed the bill. "The Digital Economy Bill is deeply flawed and illiberal. ... Any Green MPs will provide a rallying point for opposition to the Digital Economy Bill."[37]

The Liberal Democrats pledged before the 2010 General Election to repeal the bill, stating that they oppose the parts that relate to the blocking of people's Internet connections, and that the Lib Dems would "take [disconnection] off the statute book and replace it with something better".[38] However, there was no reference to the Act in the Conservative – Liberal Democrat Coalition Agreement written after the election.[39]

Support

The Design and Artists Copyright Society and the British Association of Picture Libraries and Agencies support the orphan works provision.[40] The Community Media Association supports the Act for the radio clauses stated to bring significant benefits to the community broadcasting sector as FM spectrum becomes available following digital radio switchover.[41] Attitudes of Internet Service Providers (ISPs) towards the copyright infringement provisions in the bill were mixed. In interviews with ISPs by TechRadar, Virgin Media said that they shared the commitment to address copyright infringement, but that persuasion not coercion is the key; a heavy-handed, punitive regime would simply alienate Internet users. Sky, which is both an ISP and a content provider, was supportive of the government's commitment to underpin the fight against illegal file sharing through legislation, but not directly of the 'website banning' proposal.[42][43]

Reviews of the copyright infringement provisions

Judicial review

On July 8, 2010 TalkTalk were joined by BT, Britain's biggest ISP, in seeking a judicial review of the Act on the grounds of it receiving "insufficient scrutiny" and having the potential to "harm citizens and impact both businesses".[44] They questioned whether the provisions were proportionate, respected privacy law, complied with EU law on ISP liability, and suggested that they would hinder a single European market in telecommunications services.[45]

The High Court of Justice granted the review permission on November 10, 2010.[46] Mr Justice Kenneth Parker ruled in favour of the government on 20 April 2011.[47] BT and TalkTalk sought permission to appeal the ruling, but were denied.[48]

Parliamentary inquiry

On 10 November 2010 (the same day as the judicial review), the Culture, Media and Sport Committee of Parliament announced an inquiry into the act. The inquiry will consider "the implementation, practicality and likely effectiveness of the relevant measures contained in the act", and "the scope for additional and new approaches to ensure that original work is appropriately rewarded in online".[49]

Ofcom review of sections 17 and 18

Following calls by citizens to repeal all or part of the Digital Economy Act on the Your Freedom website,[50] the government asked Ofcom in February 2011 to review whether sections 17 and 18 of the Act on website blocking are technically workable.[51]

Following the review by Ofcom, the Government announced on the 3rd of August 2011 that sections 17 and 18 of the Act were to be dropped as they were not practically enforceable, and also as the Copyright, Designs and Patents Act 1988 had been successfully used to block access to a website on the grounds of copyright infringement.[52][53]

LSE report

A report by the London School of Economics and Political Science finds that the Digital Economy Act as written, gets the balance between copyright enforcement and innovation wrong. It finds that overall, peer-to-peer technology has many legitimate benefits and therefore, should be encouraged to promote new innovative applications. Also, its research shows that not only is the amount of revenue estimated to be lost due to illegal file sharing to be “wishful thinking” but the approach put forward in the Bill as being both an expensive and ineffective way to control rights for the now out-of-date business models that lobby for it. Rather, it suggests that “hassle-free” gateways to legal music downloading is more effective way of protecting copyrights. At the same time, preserving file sharing will encourage rather than discourage innovation in the music industry rather than stifle it in the way that the unaltered Act would, which the very opposite of what this Bill claims to encourage.[54]

Hargreaves Review of Intellectual Property and Growth

The Hargreaves Review of Intellectual Property and Growth, announced by Prime Minister David Cameron in November 2010 and published in May 2011, noted that in relation to specifically copyright policy "there is no doubt that the persuasive powers of celebrities and important UK creative companies have distorted policy outcomes". According to the review lobbying by different interest groups is a feature of all political systems, and can bring benefits by informing the debate,[55] though in relation to the Digital Economy Act the review makes the following observation:

"The passage of the Digital Economy Act 2010 exemplifies the environment in which copyright policy is made. Very significant parts of the Digital Economy Bill, which was introduced to Parliament towards the end of the previous Government’s term, were lost or amended during its passage into law. This was partly a matter of unfortunate timing: a Government facing an imminent general election is ill placed to withstand pressures to amend legislation to get it through. The fact that the DEA’s legality was subsequently contested in court by two large UK companies, BT and TalkTalk, indicates the absence of business consensus. Lord Puttnam, a major figure in the UK creative industries, commented at the time: “We have been subjected to an extraordinary degree of lobbying... The lobbying process that has gone into this Bill has been quite destructive and has done none of us very much help at all”."[55]

According to the review much of the research on copyright is undertaken by private entities and is published chiefly in the form of "evidence" supporting the arguments of lobbyists, something the review terms "lobbynomics".[56] The review notes that during the call for evidence it did not "find a single UK survey that is demonstrably statistically robust" on the levels of online copyright infringement in the UK. It noted that the significant differences in levels of online copyright infringement found by different surveys "confirm the impression of unstable research conditions".[57] The review team examined more than 20 studies on the level of online copyright infringement and its impact on the UK economy, saying that where the methodology was available for examination, problems had been found in all cases. Consequently the review team has "not found either a figure for the prevalence and impact of piracy worldwide or for the UK in which we can place our confidence".[58]

According to the review the existing economic research indicates that stronger enforcement of copyright alone is not adequate to address the issue of copyright infringement. The review recommends that the UK government adopts a combination of four approaches to address copyright infringement, involving the modernisation of copyright law, education, enforcement, and by encouraging "open and competitive markets in licensed digital content, which will result in more legitimate digital content at prices which appeal to consumers". In relation to the online copyright infringement provisions of the Digital Economy Act the review recommends that the implementation of these measures "should be carefully monitored so that the approach can be adjusted in the light of evidence."[59] According to the review it is especially important that the impact of education and enforcement is carefully monitored and their impact properly understood. Otherwise "resource will be wasted and further harm may be done to the interests of everyone concerned".[60]

Cost of implementation

In response to a Freedom of Information (FOI) request Ofcom disclosed that it had spent £1.8 million in the 2011/12 financial year on the implementation of the online copyright infringement provisions, section 3 to 16 of the Digital Economy Act, and the site blocking provisions, section 17 and 18. Ofcom planned to spend another £4.0 million in 2012/13. These figures include £100,000 spent on reviewing the technical workability of section 17 and 18, a review commissioned by the Government in February 2011. According to Ofcom the Digital Economy Act provides that internet service providers and copyright owners bear the cost of section 3 to 16, including the cost to Ofcom and an appeals body. They are also liable to pay Ofcom's cost incurred prior to actual implementation. However, Ofcom notes that the April 2011 ruling by the High Court on the judicial review of the online copyright infringement provisions provides that internet service providers are not liable to pay towards Ofcom' cost or that of an appeals body.[61]

See also

Related international law

External links

References

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  7. ^ a consultation draft of their initial obligations code
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