Is the NetzDG permissible? ECJ with an exciting decision

The ECJ has made an exciting decision that could also be relevant for the NetzDG, which applies to Instagram or TikTok, for example. Accordingly, an EU member state may not impose general abstract obligations on communication platforms based in another EU country to combat illegal content on the internet.

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1. What happened?

2. How did the ECJ rule?

2.1. Author: Marian Härtel

Key Facts

The ECJ ruled that Austria may not impose generally applicable measures against illegal content on communication platforms.
A national law contradicts Union law, which guarantees the free movement of information services.
The Austrian law of 2021 requires reporting and verification procedures by foreign providers.
In 2021, fines of up to 10 million euros could be imposed for non-compliance with the law.
The Directive serves to create a legal framework for the exchange of information services between Member States.
Measures to ensure public order must be notified to the European Commission.
The decision strengthens the principle of supervision in the home Member State of the services.

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.

Author: Marian Härtel

Marian Härtel ist Rechtsanwalt und Fachanwalt für IT-Recht mit einer über 25-jährigen Erfahrung als Unternehmer und Berater in den Bereichen Games, E-Sport, Blockchain, SaaS und Künstliche Intelligenz. Seine Beratungsschwerpunkte umfassen neben dem IT-Recht insbesondere das Urheberrecht, Medienrecht sowie Wettbewerbsrecht. Er betreut schwerpunktmäßig Start-ups, Agenturen und Influencer, die er in strategischen Fragen, komplexen Vertragsangelegenheiten sowie bei Investitionsprojekten begleitet. Dabei zeichnet sich seine Beratung durch einen interdisziplinären Ansatz aus, der juristische Expertise und langjährige unternehmerische Erfahrung miteinander verbindet. Ziel seiner Tätigkeit ist stets, Mandanten praxisorientierte Lösungen anzubieten und rechtlich fundierte Unterstützung bei der Umsetzung innovativer Geschäftsmodelle zu gewährleisten.