Geo-blocking is the practice of preventing Internet users in one jurisdiction from accessing services elsewhere based on the user’s geographic location. The European Commission wants to eliminate geo-blocking within the EU—and has taken a significant step forward in its plans to do so by clearing key votes in the EU legislative process.

By the end of 2018, we expect that online retailers will need to ensure that they phase out the use of geo-blocking across the EU except in limited circumstances.

These changes are part of a wider programme of reform affecting all businesses operating in the Technology, Media, and Telecoms sectors in Europe.

Background

The European Commission launched its Digital Single Market (“DSM”) strategy in May 2015. We have written a number of articles following the DSM’s progress: at its inception, one year in, and in 2017 following a mid-term review.


Continue Reading EU Regulation Reform—Unjustified Geo-Blocking to Be Phased Out by End of 2018

The European Union (EU) has made reform of the e-commerce rules in Europe one of its main priorities for 2018.

The European Commission has already published two proposed Directives relating to cross-border e-commerce but legislative progress has been slow—a situation that the Commission plans to correct in 2018.

The Commission’s stated aim is to establish

Happy 2018 to our readers! It has become a Socially Aware tradition to start the New Year with some predictions from our editors and contributors. With smart contracts on the horizon, the Internet of Things and cryptocurrencies in the spotlight, and a number of closely watched lawsuits moving toward resolution, 2018 promises to be an exciting year in the world of emerging technology and Internet law.

Here are some of our predictions regarding tech-related legal developments over the next twelve months. As always, the views expressed are not to be attributed to Morrison & Foerster or its clients.

From John Delaney, Co-Founder and Co-Editor, Socially Aware, and Partner at Morrison & Foerster:
Regarding Web Scraping

Web scraping is an increasingly common activity among businesses (by one estimate, web-scraping bots account for as much as 46% of Internet traffic), and is helping to fuel the “Big Data” revolution. Despite the growing popularity of web scraping, courts have been generally unsympathetic to web scrapers. Last August, however, web scrapers finally received a huge victory, as the U.S. District Court for the Northern District of California enjoined LinkedIn from blocking hiQ Labs’ scraping of publicly available user profiles from the LinkedIn website in the hiQ Labs, Inc. v. LinkedIn Corp. litigation. The case is now on appeal to the Ninth Circuit; although my sense is that the Ninth Circuit will reject the broad scope and rationale of the lower court’s ruling, if the Ninth Circuit nevertheless ultimately sides with hiQ Labs, the web scraper, the decision could be a game changer, bringing online scraping out of the shadows and perhaps spurring more aggressive uses of scraping tools and scraped data. On the other hand, if the Ninth Circuit reverses, we may see companies reexamining and perhaps curtailing their scraping initiatives. Either way, 2018 promises to bring greater clarity to this murky area of the law.

Regarding the Growing Challenges for Social Media Platforms

2017 was a tough year for social media platforms. After years of positive press, immense consumer goodwill and a generally “hands off” attitude from regulators, last year saw a growing backlash against social media due to a number of reasons: the continued rise of trolling creating an ever-more toxic online environment; criticism of social media’s role in the dissemination of fake news; the growing concern over social media “filter bubbles” and “echo chambers”; and worries about the potential societal impact of social media’s algorithm-driven effectiveness in attracting and keeping a grip on our attention. Expect to see in 2018 further efforts by social media companies to get out ahead of most if not all of these issues, in the hopes of winning over critics and discouraging greater governmental regulation.

Regarding the DMCA Safe Harbor for Hosting of User-Generated Content

The backlash against social media noted in my prior item may also be reflected to some extent in several 2017 court decisions regarding the DMCA safe harbor shielding website operators and other online service providers from copyright damages in connection with user-generated content (and perhaps in the CDA Section 230 case law discussed by Aaron Rubin below). After nearly two decades of court decisions generally taking an ever more expansive approach to this particular DMCA safe harbor, the pendulum begun to swing in the other direction in 2016, and this trend picked up steam in 2017, culminating in the Ninth Circuit’s Mavrix decision, which found an social media platform provider’s use of volunteer curators to review user posts to deprive the provider of DMCA safe harbor protection. Expect to see the pendulum continue to swing in favor of copyright owners in DMCA safe harbor decisions over the coming year.

Regarding Smart Contracts

Expect to see broader, mainstream adoption of “smart contracts,” especially in the B2B context—and perhaps litigation over smart contracts in 2019 . . . .

From Aaron Rubin, Co-Editor, Socially Aware, and Partner at Morrison & Foerster:
Regarding the CDA Section 230 Safe Harbor

We noted previously that 2016 was a particularly rough year for Section 230 of the Communications Decency Act and the immunity that the statute provides website operators against liability arising from third-party or user-generated content. Now that 2017 is in the rear view mirror, Section 230 is still standing but its future remains imperiled. We have seen evidence of Section 230’s resiliency in recent cases where courts rejected plaintiffs’ creative attempts to find chinks in the immunity’s armor by arguing, for example, that websites lose immunity when they use data analytics to direct users to content, or when they fail to warn users of potential dangers, or when they share ad revenue with content developers. Nonetheless, it is clear that the knives are still out for Section 230, including in Congress, where a number of bills are under consideration that would significantly limit the safe harbor in the name of combatting sex trafficking. I predict that 2018 will only see these efforts to rein in Section 230 increase.
Continue Reading 2018: Predictions From Socially Aware’s Editors and Contributors

In 2016, brands spent $570 million on social influencer endorsements on Instagram alone. This recode article takes a looks at how much influencers with certain followings can command, and whether they’re worth the investment.

And don’t overlook the legal issues associated with the use of social media influencers; the FTC just settled its first

A defamation suit brought by one reality television star against another—and naming Discovery Communications as a defendant—could determine to what extent (if any) media companies may be held responsible for what their talent posts on social media.

In a move characterized as setting legal precedent, UK lawyers served an injunction against “persons unknown” via

On June 22, 2017, the German Parliament passed a bill that, among other things, awards extensive surveillance powers to law enforcement authorities. The new law, once in force, will allow law enforcement to covertly install software on end user devices allowing the interception of ongoing communications via Internet services such as WhatsApp or Skype. These new measures may be used for investigating a wide array of crimes (the “Catalog Crimes”), which are classified as “severe” but range from murder to sports betting fraud to everything in between.

Today, the German Federal Criminal Police Office (BKA) is only allowed to engage in similar activities to prevent international terrorism. All other law enforcement authorities are only allowed to intercept regular text messages and listen to phone conversations in cases of Catalog Crimes. However, these investigators are currently fighting a losing battle against end-to-end encrypted Internet services. With respect to such services, the current legal framework only allows for access via the respective telecom operators. These operators, however, can only provide law enforcement with the encrypted communications streams. By introducing the new law, the German government now aims to prevent “legal vacuums” allegedly resulting from this surveillance gap.
Continue Reading German Parliament Enacts Wide-ranging Surveillance Powers Allowing End User Devices to Be Hacked by Authorities

03_April_SociallyAware_thumbnailThe latest issue of our Socially Aware newsletter is now available here.

In this edition, we explore the threat to U.S. jobs posed by rapid advances in emerging technologies; we examine a Federal Trade Commission report on how companies engaging in cross-device tracking can stay on the right side of the law; we take

GettyImages-169937464_SMALLCan the mere offering of a mobile app subject the provider of such app to the privacy laws of countries in the European Union (EU)—even if the provider does not have any establishments or presence in the EU? The answer from the District Court of The Hague to that question is yes. The court confirmed on November 22, 2016, that app providers are subject to the Dutch Privacy Act by virtue of the mere offering of an app that is available on phones of users in the Netherland, even if they don’t have an establishment or employees there.

Context. EU privacy laws generally apply on the basis of two triggers: (i) if a company has a physical presence in the EU (in the form of an establishment or office or otherwise) and that physical presence is involved in the collection or other handling of personal information; or (ii) if a company doesn’t have a physical presence but makes use of equipment and means located in the EU to handle personal information.


Continue Reading The Hague District Court’s WhatsApp Decision Creates Concerns for Mobile App Developers

A federal district court judge refused to grant summary judgment to the copyright owners of the Star Trek franchise in the infringement suit they brought against the team behind a fan-made, crowdfunded prequel to the original Star Trek television series.

Strict new European Union privacy rules will restrict Internet companies’ access to consumers’ data.

As part of the European Commission’s Digital Single Market initiative, the European Commission has published a draft Regulation aimed at preventing traders from discriminating against customers located in other EU Member States by denying those customers access to e-commerce sites, or by redirecting those customers to websites that offer inferior goods or sales conditions—a practice known as geo-blocking. The proposed new rules will benefit both consumers and businesses that purchase goods or services within the EU (excluding resellers).

The European Commission believes that geo-blocking and discriminatory practices undermine online shopping and cross-border sales within the EU.

The Regulation, which must still undergo review by the European Parliament and the Council of the EU, may change and is expected to be in force in 2017 (except the ban on discriminating against customers of electronically supplied services, which is expected to be effective beginning July 2018). When it is adopted, the Regulation will automatically take effect in all Member States without each Member State having to implement it into national law.
Continue Reading European Commission Publishes Draft Regulation Prohibiting Geo-Blocking by Online Traders and Content Publishers