Is the NetzDG permissible? ECJ with an exciting decision

A national approach would be contrary to Union law, which guarantees the free movement of information society services through the principle of supervision in the Member State of origin of the service concerned

What happened?

In 2021, Austria introduced a law that obliges domestic and foreign providers of communication platforms to set up reporting and review procedures for potentially illegal content. This law also provides for the regular and transparent publication of reports of illegal content. An administrative authority ensures compliance with the legal provisions and can impose fines of up to EUR 10 million.

Google Ireland, Meta Platforms Ireland and TikTok, three platforms based in Ireland, claim that the Austrian law violates EU law, specifically the Information Society Services Directive.

How did the ECJ rule?

Asked about this by an Austrian court, the Court points out the aim of the Directive: to create a legal framework to ensure the free movement of information society services between Member States. From this point of view, the Directive removes the obstacles posed by the various national rules applicable to these services through the principle of home Member State supervision.

Member States other than the home Member State of the service concerned may indeed take measures to ensure public policy, the protection of public health, public security or the protection of consumers under narrowly defined conditions and in specific cases. These specific exceptions must be notified to the European Commission and the Member State of origin.

However, Member States other than the home Member State of the service concerned may not adopt general abstract measures that apply indiscriminately to all providers of a category of information society services. Indiscriminate means without distinction between service providers established in that Member State and those established in other Member States.

If these Member States were able to impose such general abstract obligations, this would call into question the principle of supervision in the home Member State of the service concerned, on which the Directive is based.

If the Member State of destination (in this case Austria) were authorized to adopt such measures, this would interfere with the regulatory competence of the Member State of origin (in this case Ireland). Moreover, this would undermine mutual trust between the Member States and violate the principle of mutual recognition. In addition, the platforms in question would be subject to different legislation, which would also run counter to the free movement of services and thus the smooth functioning of the internal market.