Trade Talks Hone in on Internet Abuse and ISP Liability

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ISPs around the world may be forced to snoop on their subscribers and cut them off if they are found to have shared copyright-protected music on the Internet, under an international agreement being promoted by the U.S.

Countries including Japan, Canada, South Korea, Australia as well as the European Union and U.S. have been negotiating an anticounterfeiting trade agreement (ACTA) over the past two years to combat the growing problem of counterfeit products ranging from designer clothes to downloadable music.

The countries are due to discuss the ACTA at a meeting in South Korea on Wednesday, focusing specifically on the issue of Internet piracy. The U.S. has drafted the text of the chapter on the Internet.

In a summary of the U.S.'s position shared orally with trade officials at the European Commission in September, signatories of the accord must "provide for third-party liability." The Commission informed all 27 countries in the E.U. of the U.S. position in a memo seen by IDG News service.

Under existing laws in the U.S., the E.U. and elsewhere, ISPs are granted immunity from prosecution for illegal activities carried out by subscribers across their networks. This new global trade agreement appears to contradict the legal status quo, said Michael Geist, a law professor at Ottawa University, Canada.

This provision would mean that every country that signs up to ACTA must allow content owners such as record companies and Hollywood studios to sue ISPs for failing to stop their subscribers from illegally sharing copyright-protected material such as music and movies.

U.S. trade officials have been slow to show any of its trading partners its draft of the Internet chapter ahead of Wednesday's meeting. "This is an intellectual property agreement yet it is being treated like nuclear secrets," Geist said.

The Commission memo said the U.S. is secretive about the Internet chapter because it is "sensitive due to the different points of view regarding the internet chapter both within the Administration, with Congress and among stakeholders (content providers on one side, supporters of internet freedom on the other)."

Geist has been "troubled" about the secretive way the ACTA has been drafted "from the beginning."

"It is unprecedented for an IP treaty that impacts literally millions of people to be negotiated in such secrecy," he said, adding that the U.S. negotiating stance "runs counter to the Obama Administration's commitment to transparency."

Europe appears willing to back up the U.S.'s plans to make ISPs more liable for the content on their networks, according to Joe McNamee, European affairs specialist for Digital Rights Europe, a free speech and privacy pressure group.

The prevailing E.U. law on the matter of ISP liability is the e-commerce directive, which grants service providers protection from prosecution as long as they are just the conduit and not involved with the sender or receiver of illegal content.

"The Commission appears to be opening up ISPs to third party liability, even though the European Parliament has expressly said this mustn't happen," McNamee said, adding that ACTA looks likely to erode European citizens' civil liberties.

The European Commission wasn't immediately available to comment.

The debate about ISP liability comes at a sensitive time in Europe, where some member countries are starting to crack down on copyright infringement on the Internet.

The U.S. wants ACTA to force ISPs to "put in place policies to deter unauthorized storage and transmission of IP infringing content (for example clauses in customers' contracts allowing a graduated response)," according to the Commission memo.

The term "graduated response" is used to describe the recently passed French law otherwise known as the "three strikes and you are out law." People found guilty under the code get two warnings and are then banned from the Internet for up to two years for illegally sharing music or movies online.

Meanwhile, the name of the agreement is misleading, said Geist. "First up, none of the best known countries for counterfeiting are parties to the talks," he said, referring to China and Russia.

"At the moment it's just a coalition of the willing -- other countries will be pressured to sign up later once the agreement has gained the respectability of an international treaty," he said.

"Anyway, it's not really about counterfeiting, it's more about copyright and so should be called a copyright treaty," Geist said.

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