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Updates on Developments in Global Privacy & Data Security

Court Strikes Net Neutrality Rules, Leaves Path for Other Broadband Regulations

Posted in Broadcasting & Cable, Telecommunications

A federal appeals court struck down key parts of the Federal Communications Commission’s Open Internet Order in a Jan. 14 decision, ruling that the FCC’s “net neutrality” rules improperly regulate broadband providers like “common carriers” — such as providers of traditional telephone service — even though the FCC has classified broadband providers as not subject to common-carrier obligations.   Importantly, however, the court held that the FCC has direct authority to impose restrictions on broadband providers as long as such rules do not amount to common carrier regulation.

The FCC’s 2010 Open Internet Order generally prohibited both “fixed” and mobile broadband providers from blocking users’ access to lawful online content and services, with fixed providers — such as cable companies — subject to tighter restrictions than mobile operators.  In addition, the rules barred fixed broadband providers from “unreasonably” discriminating between different kinds of Internet traffic.

The FCC’s asserted goal was to prevent service providers from using their control of consumers’ broadband connections to prevent or discourage subscribers from using online voice, video, or other services that compete with the broadband provider’s own offerings.  The Commission concluded that such efforts would impair the spread of broadband, and the FCC found preventing such impairment was one of the mandates of the 1996 Telecommunications Act.   Verizon challenged the FCC’s rules as unnecessary, lacking in a statutory basis, and contrary to the Communications Act requirement that only traditional telephone companies can be subject to common carrier regulation.

In Tuesday’s decision, the U.S. Court of Appeals for the D.C. Circuit upheld the FCC’s judgments on a number of points, including that the rules were a rational policy tool to promote broadband and that the rules had a statutory basis in Section 706 of the 1996 Act, which heretofore had been characterized by the FCC as simply hortatory.  However, the court concluded that the anti-blocking and anti-discrimination rules violated statutory prohibitions on imposing common carrier rules on non-carriers.   The court upheld a separate rule requiring broadband providers to disclose their network management practices. Continue Reading

FCC Proposes $200,000 Fine For Simulated EAS Codes

Posted in Broadcasting & Cable

The FCC has proposed fining Turner Broadcasting System $200,000 for allegedly transmitting simulated Emergency Alert System (EAS) codes 14 times over a six day period in the absence of an actual emergency.   Two viewers complained that an advertisement that aired on Turner’s Adult Swim Network (which shares channel airtime with the Cartoon Network) contained audio that they confused with EAS codes.  The FCC agreed that even though the advertisement did not contain any embedded EAS data, the sounds used in the ad were substantially similar to the sounds made by the transmission of EAS codes.  The advertisement aired seven times each on Turner’s east coast and west coast feeds, leading to the FCC to determine that it aired a total of 14 times.

In addition to this proposed fine for Turner, the FCC has issued several other enforcement decisions recently concerning simulated EAS sounds.  Therefore EAS participants, including broadcasters and multi-channel video programming distributors, as well as cable networks, should be very careful to ensure that programming does not contain any audio that could be confused with the EAS attention signal or codes.  Even where, as here, a third party prepares the content that contains the alleged simulation, FCC-regulated entities face potential penalties.

SpectrumWatch: FCC Releases Information Related to Repacking Process

Posted in Broadcasting & Cable, Spectrum & Mobile

Last week, the FCC released a Public Notice (“PN”), following up on its July Public Notice, concerning the software to be used during the Incentive Auction to determine whether the acceptance of each bid from a broadcaster will result in a feasible, and optimal, repacking process.

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Supreme Court Agrees to Hear Aereo

Posted in Broadcasting & Cable

Today, the U.S. Supreme Court agreed to hear litigation between broadcasters and Aereo, a streaming service that retransmits broadcast programming without consent or payment.  Broadcasters argue that Aereo infringes their exclusive right to publicly perform copyrighted works.  Aereo contends that its system uses one antenna per subscriber to provide each user a separate copy of the programs streamed and thus it is not “publicly” performing the works.  The Court will likely issue a decision by the end of June.

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Virginia Court Scales Back Right to Online Anonymity

Posted in Privacy & Data Security

The Virginia Court of Appeals held this week that Internet users who may have posted fake reviews of companies do not have a right to remain anonymous. 

Hadeed Carpet Cleaning in Alexandria, Va., filed a defamation lawsuit against seven Yelp users who wrote critical reviews about Hadeed and a related business.  Hadeed claims that it could not locate any records that suggest that any of the seven reviewers were Hadeed customers.

After filing the suit, Hadeed subpoenaed Yelp for information that would identify the seven reviewers.  Yelp opposed the subpoena, arguing, among other things, that it did not comply with Virginia law and the First Amendment.

On Tuesday, the Virginia Court of Appeals in a 2-1 decision affirmed the state trial court’s decision to enforce the subpoena.  A Virginia statute requires a subpoena for the identity of an anonymous Internet users’ identity to identify communications “that are or may be tortious or illegal.” The appellate court acknowledged that in general, a Yelp review “is entitled to First Amendment protection because it is a person’s opinion about a business that they patronized.”  But the court held that this protection only applies if the reviewer is an actual customer whose review is based on personal experience with the business.   If the reviewer never actually patronized the business, the court held, the review is a false statement of fact that is not entitled to First Amendment protection.

Also notable is the court’s decision to base its decision exclusively on a Virginia statute that outlines procedural rules for the issuance of such subpoenas.  State and federal courts in other states have long relied on First Amendment tests developed by courts in New Jersey and Delaware, and which are generally seen as providing strong protections for anonymous online speech.  But the Virginia court rejected these tests, concluding that by adopting the statute, “the General Assembly considered persuasive authority from other states and made the policy decision to include or exclude factors that other states use in their unmasking standards.”  The Virginia ruling is the latest in a string of recent decisions, which we have covered here, that refuses to apply the New Jersey and Delaware First Amendment tests.

Judge James W. Haley dissented in part, writing that a “business subject to critical commentary, commentary here not even claimed to be false in substance, should not be permitted to force the disclosure of the identity of anonymous commentators simply by alleging that those commentators may not be customers because they cannot identify them in their database.”

Courts Diverge on the Tests for Anonymous Online Speech

Posted in Privacy & Data Security

For more than a decade, a New Jersey appellate court’s opinion guided courts nationwide as they determined whether to enforce subpoenas for the identities of anonymous online speakers.

But in 2013, courts increasingly moved away from the New Jersey court’s test, leading to further divergence in the methods that courts use to determine whether a request for an anonymous Internet user’s identity violates the First Amendment or discovery rules.

In Dendrite International v. Doe No. 3, the New Jersey Superior Court Appellate Division held in 2001 that before enforcing a subpoena for the identity of an online speaker, the issuer of the subpoena must: (1) notify the anonymous speaker of the subpoena and provide the speaker a reasonable opportunity to respond; (2) specifically identify the speech at issue; (3) allege a prima facie cause of action; (4) present sufficient evidence in support of each element of the claim. If the issuer has satisfied these procedural requirements, the trial court must balance the anonymous speaker’s First Amendment rights against the strength of the plaintiff’s prima facie case and the necessity of disclosure. Publishers and web sites generally support the use of Dendrite because the test shifts the burden from the site to the commenter and enables the commenter to decide whether to fight the subpoena.

Although the Dendrite ruling came from a New Jersey intermediate appeals court, state and federal courts nationwide relied on the ruling over the next decade. Among the courts to rely on Dendrite are the Maryland Court of Appeals, the New Hampshire Supreme Court, and the U.S. District Court for the District of Connecticut.

Over the past year, however, some courts have moved away from Dendrite. Most notably, last April, the New Jersey Superior Court Appellate Division reversed a trial judge’s decision to quash a subpoena for the identity of individuals who allegedly hacked a hospital’s intranet to circulate defamatory messages about hospital employees. In Warren Hospital v. Does 1-10, the appellate court held that Dendrite did not apply because the defendants’ actions were “no different than if they had broken into the hospital and spray painted their messages on the hospital’s walls.”

Also in April, the Court of Appeals of Michigan reversed a trial court’s application of Dendrite to a subpoena issued by a law school, seeking the identity of an individual that allegedly defamed the school anonymously online. In Thomas M. Cooley Law School v. Doe, the appellate court held that “Michigan rules of civil procedure adequately protect Doe 1′s constitutional interests.”

Similarly, in June, the U.S. District Court for the Southern District of New York rejected the application of Dendrite to a lawsuit against defendants who anonymously published blogs that infringe trademarks owned by Bloomberg, L.P. Instead, the court relied on a less stringent standard that courts have used in online copyright infringement cases.

And in July, the U.S. District Court for the District of Colorado denied a blog administrator’s motion to quash subpoenas for the identities of 10 John Doe defendants who had allegedly defamed the plaintiff company on the blog. The blog administrator relied largely on Independent Newspapers, Inc. v. Brodie, a 2009 Maryland Court of Appeals opinion that had adopted the Dendrite test. The Colorado federal court held that Brodie is not binding. Acknowledging that “I cannot be certain that each IP address corresponds to an offensive comment,” Judge Ellen L. Hollander wrote that “absolute certainty is not required.”

The recent decisions demonstrate that courts have yet to settle on a uniform First Amendment test for the right to anonymous online speech, and increase the likelihood that federal appellate courts or the U.S. Supreme Court will have to confront the issue.


Safeway Settles ADA Accessibility Lawsuit, Makes Grocery Website Accessible to Visually Impaired

Posted in Uncategorized

Safeway agreed in settlement of a lawsuit brought by visually-impaired customers in California and Washington State to ensure that its website, which allows people to order groceries online and have them delivered to their homes, is accessible to persons with disabilities.  Safeway has already made significant enhancements to its online shopping website to meet the agreed-to standard and will continue to do so over the next year pursuant to the settlement.

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All Internet Service Providers Can be Required to Block Access to ‘Pirate’ Websites, Says European Court Advocate General

Posted in Intellectual Property

In his Opinion of 26 November 2013 (not yet available in English) Advocate General Cruz Villalón has taken the position that the Internet Service Provider (“ISP”) of the user of a website infringing copyright should be considered to be an “intermediary” under Directive 2001/29 and, as such, can be ordered to block access to the website for its clients.

The Austrian Supreme Court referred questions regarding the legality of orders to block access in the context of a dispute between two film production companies on the one hand, Constantin Film Verleih and Wega Filmproduktionsgesellschaft, and UPC Telekabel Wien, a major Internet provider in Austria, on the other.  The website kino.to allowed users to stream or download films for which Constantin Film and Wega hold the rights, without their consent.  The two companies sought an injunction prohibiting UPC Telekabel from allowing its customers to access kino.to.  The injunction was granted but without setting out specific measures to be taken by the ISP. Continue Reading

Germany Closes Price Parity Investigation But Antitrust Scrutiny on Online Platforms Continues in Europe

Posted in Transactions

On 26 November 2013, the German Federal Cartel Office (FCO) announced that it ended the probe into Amazon’s price parity policy (the “Policy”).  The Policy required that the price of an item offered by a retailer on Amazon’s online marketplace platform, Amazon Marketplace, should not be higher than the retailer’s lowest offer for that item elsewhere, including other online shops or the retailer’s own website.

In August 2013 Amazon decided not to implement the Policy in the EU.  As a result, the UK competition authority (OFT) stated that it was minded to close its probe without reaching a view on infringement, and the FCO announced that it would assess whether the measures taken by Amazon were sufficient for it to close its investigation (see our previous posts here and here).  The FCO wanted to ensure that Amazon removes price parity terms and conditions for all dealers in a legally binding manner, and that it clearly informs dealers about the changed terms and conditions.  According to its press statement of 26 November 2013, the FCO has determined that these requirements have been met, noting that dealers have confirmed implementation of these measures.

While the probe into Amazon’s price parity policy has come to an end, competition authorities in Europe have been closely watching price relationship agreements in the context of online platforms, especially in the e-books (see our previous post here) and online hotel booking sectors.

*The authors would like to thank Monika Kuschewsky for helpful comments.

Ireland Proposes Amendments to Copyright Law

Posted in Intellectual Property

Written by Ezra Steinhardt and Colin Warriner

On 29 October 2013, the Republic of Ireland’s Department of Jobs, Enterprise and Innovation (DJEI) published a report containing proposed amendments to its copyright laws, named “Modernising Copyright” (“the Report”).  Taking account of submissions received during a public consultation that ran between February and May 2012, the DJEI’s Copyright Review Committee (CRC) uses the Report to recommend a series of amendments to the Irish Copyright and Related Rights Act, 2000 (CRRA).

Some of the Report’s key findings and recommendations are outlined below.

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