Digital Economy Act: Judicial Review Outcome

The High Court of Justice has published its findings of its judicial review of the Digital Economy Act 2010 (www.legislation.gov.uk/ukpga/2010/24/contents). The Court was asked to review:
(i) the online infringement of copyright provisions (for an overview of the provisions of the Act click here>); and
(ii) The Online Infringement of Copyright (Initial Obligations) (Sharing of Costs) Order 2011 (www.legislation.gov.uk/ukdsi/2011/9780111505779/contents), which deals with payment of costs incurred in executing the online infringement of copyright provisions of the Act.

Background
BT and Talk Talk (the claimants) challenged the online infringement of copyright provisions on five grounds. The detail of their challenge is outwith the scope of this article, but broadly the challenge was based on the following:

consisting as a technical regulation (within the meaning of the Technical Standards Directive), the provisions should have been notified to the EU Commission in draft, but were not;
the provisions are incompatible with certain provisions of the E-Commerce Directive on the basis that they restrict the freedom to provide ISP services, imposes obligations on ISPs to 'monitor' content in certain situations and removed the ability for ISPs to avoid liability for copyright infringement under the 'mere conduit' defence;
the provisions are incompatible with certain provisions of the Privacy and Electronic Communications Directive by imposing an obligation on ISPs to process personal information (e.g. the IP address provided by the copyright owner with an individual subscriber's name and address) in a manner contrary to the Directive;
the provisions are disproportionate in their impact on ISPs, consumers, business subscribers and public intermediaries and restrict the free movement of services and/or privacy and/or the right to free expression; and
the provisions infringe the Authorisation Directive by imposing costs, particularly administrative costs of Ofcom, onto ISPs.

The claimants also sought to challenge the draft Costs Order on each of grounds 2 – 5 above, with particular reference on the proposal for ISPs to contribute 25% of Ofcom's operating costs and costs associated with Ofcom setting up an appeal process.

Outcome
The Court dismissed the above grounds and held the relevant provisions of the Act as lawful and proportionate. Not withstanding this, the Court did uphold the objection in relation to the Costs Order where it obliged ISPs to pay 25% of Ofcom's costs in setting-up, monitoring and enforcing the online copyright infringement provisions, which is good news for ISPs.

Although the claimants could appeal the decision, it is not yet clear whether they will do so or not. In the meantime, the Government has issued a statement (www.culture.gov.uk/news/news_stories/8060.aspx) advising that it will shortly set out the next steps in implementing the Act and is currently consulting with Ofcom as to the practical implications of enabling courts to block websites.

Although welcome news by copyright-holders, ISPs will now likely be busy considering implementing steps to manage the cost and administrative burden it will bear as a result of the Act.

For our previous overview of the Act, click here>
For our previous commentary on the Judicial Review of the Act, click here>