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INTERESTING DECISION OF THE REGIONAL ADMINISTRATIVE TRIBUNAL FOR LATIUM ON UNFAIR COMMERCIAL PRACTICES IN THE FIELD OF TELEVISION SERVICES.

11/04/2017

With recent decision of 22 March 2017, the Regional Administrative Tribunal for Latium had to consider the petition filed by Sky Italy for the annulment of the measure adopted by the Competition and Market Authority (AGCM) in its meeting of 23 December 2008. The Tribunal upheld the decision taken by AGCM and ordered Sky Italy to pay an administrative penalty of € 200,000.00 for unfair business practices concerning the conclusion of contracts by telephone.


 

Following complaints lodged by consumers, in early 2008, the ACGM started a preliminary investigation against Sky Italy aimed at verifying the integration of alleged unfair business practices, concerning the activation of television services through the conclusion of distance contracts (in particular, by telephone). The disputed measure condemned the conduct of the applicant on two counts, subject to separate analysis: i) the activation of additional services not consciously required by the nominee subscription, on the one hand, and ii) the activation of subscriptions, services and additional premium services with differing characteristics from those promised, on the other.

In the first case, the decision of the AGCM was confirmed by Regional Administrative Tribunal for Latium, which assessed that there was sufficient evidence to show that the call center operators of the applicant did not provide to the users – to whom the subscription of new offers was proposed – suitable and adequate information to enable them to understand that the purchase would have been finalized following the provision of the single telephone consent, and not as a result of the signing of documents sent later to their home. In addition, it was found that very often the enabling of the offers was subject to consent by people other than the subscription holder (i.e. cohabiting delegates in possession of information about the customer’s position) and that were not carried out further checks about the willingness of the real owner to subscribe the promotions. The commercial practice in question was therefore deemed, under this first aspect, aggressive and therefore prohibited.

In the second case, with reference to the extension of subscriptions, additional services and premium services with differing characteristics than those promised, the conduct of Sky Italy has been qualified as misleading, given that the differences mainly related to the actual cost of  the offers and in particular the lack of indication of the activation costs and a clear illustration of conditions and time limits for receiving the service. In particular, the Regional Administrative Tribunal pointed out how it should be recognized that there was an inherent weakness of the consumer with regard to the counterparty, due to the simultaneous physical distance of the contracting parties, which makes particularly significant the burden of providing clear and exhaustive information regarding the immediate purchase of the package and the content of the services offered.


AGCOM REGULATION ON COPYRIGHT HELD LAWFUL: REGIONAL ADMINISTRATIVE TRIBUNAL ISSUES VERY RECENT JUDGMENT. THE LAW FIRM LGV AVVOCATI HAS ALREADY DEALT WITH THE ISSUE ON THE 25TH EDITION OF THE PUBLICATION “QUADERNI DI AIDA – IL REGOLAMENTO AGCOM SUL DIRITTO D’AUTORE”.

4/04/2017

With an extremely recent decision dated 30 March 2017, the Regional Administrative Tribunal for Latium rejected the claim for annulment of the regulation adopted by the Communications Authority with resolution no. 680/13/CONS of 12 December 2013 concerning the protection of copyrighted works on electronic communications networks. The issue and the regulation have already been commented by Ms Simona Lavagnini just after its entry into force, in 2014, in the 25th release of the well-known publication “Quaderni di AIDA- Il regolamento Agcom sul diritto d’autore”.


 

AGCOM is the Italian Communications Authority, responsible for supervising the implementation of fair competition among market operators and for protecting fundamental rights in the telecommunications, mass media and editorial sectors. In December 2013, the Authority adopted a Regulation dealing with the protection of copyrighted works made available on electronic communications networks (foremost, the Internet). The most important provisions of the Regulation are those allowing the copyright holder to petition the Authority in cases where his or her digital work has been made available on an Internet page and he or she believes that doing so amounts to an infringement of the Copyright Law. The Regulation then provides for an examination phase involving the service providers and, if possible, the person or entity that has made the content available on the web (i.e. the “uploader”), as well as the administrator of the web page and Internet website. This procedure can either end with the archiving of the case; or, alternatively, where a violation has been found, the Authority can adopt different types of measures such as selective removal of the works, disabling access to said works or disabling access to the Internet website. The innovative powers conferred by the regulation to the Authority brought some Italian scholars to examine in depth the upcoming scenario in the on-line copyright enforcement. The results of said analysis have been published on the 25th release of the well-known publication “Quaderni di AIDA” to which Ms. Simona Lavagnini has actively collaborated.

Shortly after its adoption a claim was put forward before the Regional Administrative Tribunal for Latium by a varied host of consumer and industry associations, who set forth a number of arguments which, summarily, were to the effect that with the adoption of the Regulation the Authority had exercised powers it had not been granted under the law. However, with its decision of 30 March 2017, the Tribunal held that such claim had no basis, for several reasons.

To begin with, it emerged that from a global reading of the applicable norms, the electronic communications providers are – contrary to what had been argued by the petitioners – required to collaborate with the Authority in pursuing copyright infringements carried out on their networks. More precisely, the Tribunal held that: “a systematic reading of the legislation confirms the existence of regulatory and supervising powers which the Authority can exercise with respect to the service providers, also by way of application of measures aimed at ending infringements of the Copyright Law, these being remedies that are concurrent and not substitutive of those conferred on the ordinary legislative authorities” (para. 6.4 of the judgment). Therefore, the Tribunal held that the Communications Authority is indeed the body responsible for monitoring copyright infringements occurring within the context of electronic communication, that it could and should have adopted means of exercising its functions, that it did so with the adoption of the Regulation and that this in no way encroached upon the jurisdiction of the ordinary courts (so-called “judicial and administrative double-track”). Furthermore, the Tribunal found that the adoption of the Regulation complied with the Italian Constitution. The Tribunal explicitly stated that, by adopting the Regulation, the Communications Authority had validly exercised its regulatory powers and, moreover, that the provisions of the Regulation “are not such as to raise any issues of unconstitutionality requiring intervention by the Constitutional Court” (para. 8).

In addition to the above, the Tribunal went on to consider the other points of the claim for annulment of the Regulation. In particular, the Tribunal held that the Authority can also issue blocking orders against infringers of copyrighted digital works, without thereby infringing EU law  (para. 11 of the judgment). It also addressed the claim set forth by the petitioners to the effect that the costs of removals of infringing content entirely fell upon the ISPs, whereas the copyright holder, who could unlimitedly report infringements, incurred no such expenses. The Tribunal was unpersuaded by such argument and rejected it completely, incisively noting that “omitted financial contributions cannot determine a lack of protection [for the copyright holder]” (para. 15 of the judgment). Finally, the Regional Administrative Tribunal found that the Regulation and its provisions complied with EU law, noting especially that the Communications Authority had, as early as September 2013, conveyed to the European Commission the text of the proposed scheme of the Regulation, as required by EU Directive 98/34 (so-called transparency directive). The Commission did indeed submit its own observations and, subsequently, upon receiving the updated version of the Regulation draft in January 2014, stated it had no further comments. Consequently, no issues could be raised with regard to the compliance of the Regulation with EU norms either, and for all those reasons the Tribunal rejected the claim for annulment of the Regulation adopted by the Communications Authority.


COURT COMPETENT TO DECIDE ON A CLAIM FOR PAYMENT OF DAMAGES CAUSED BY TRANSNATIONAL SALES VIA INTERNET WEB SITES? FOR THE ECJ IS THE COURT OF THE STATE IN WHICH DELIVERY OCCURS!

The European Court of Justice (ECJ) has declared that Art. 5, point 3, Council Regulation n. 44/2001, dated December 22, 2000, concerning the jurisdiction, acknowledgement, execution and implementation of civil and commercial decisions, must be interpreted – in order to ascertain the jurisdiction with reference to a claim for damages based on a breach of the rule prohibiting sales outside of a selective distribution network – in the sense that endowed with jurisdiction are the courts of the State where the damage (i.e. violation of the prohibition) has occurred. It is irrelevant that the internet websites offering goods in breach of the selective distribution network should operate in Member States different from that of the court in which proceedings have been commenced.


 

The French company Concurrence entered into an agreement with Samsung for the distribution of high range products bearing the Korean mark “Elite”. Such contract provided for a prohibition from selling those products also via the internet.

Samsung subsequently notified Concurrence of the termination of their contractual relation, claiming breach on part of Concurrence of the online sale prohibition provided under the selective distribution agreement. Concurrence, for its part, disputed the validity of such clauses claiming, in particular, that they had not been uniformly applied to all distributors, some of which sold the products at issue on various Amazon websites, without thus provoking any reaction from Samsung.

What followed, then, were two proceedings (one before the Paris Court and the other before the Paris Court of Appeal), with Concurrence losing in both cases, who then appealed to the French Supreme Court. Concurrence argued that the judgment of the Paris Court of Appeal had erroneously declared the lack of jurisdiction of the French courts over proceedings involving proceedings concerning Amazon websites operating outside of the Member State territory. In particular, according to Concurrence, the Paris Court of Appeal had wrongfully failed to ascertain whether the sales system via Amazon internet websites allowed for the shipping of products sold not only within the Member State of origin of the internet website in question, but also within other Member States, and especially in France, which would have justified the finding of jurisdiction of the French courts.

The French Supreme Court decided to suspend proceedings and referred the question to the Court of Justice of the European Union, requesting the exact interpretation of art. 5, para. 4 of Regulation no. 44/2001, with a view to ascertaining the jurisdiction conferred by that provision with regard to a case of claims for damages put forward on the basis of a violation of the prohibition of sale outside of the selective distribution network determined by the offer, on websites operating in different Member States, and concerning products forming the object of said network.

With the judgment herewith considered, the European Court of Justice held that, in such cases, the judge endowed with jurisdiction is that of the Member State in which the damage actually occurs, taking into account the reduction of the volume of sales suffered by the store and his consequent loss of profits, also noting that it is irrelevant that the internet websites in which the offer of objects falling within the selective distribution network should operate in Member states different from that of the court in which proceedings have been commenced.

THE COURT OF ROME RULES IN FAVOR OF SIAE ON THE ANTE CAUSAM PETITION FILED AGAINST SECONDARY TICKETING ACTIVITIES

03/02/2017

The Court partially agreed with the requests made by SIAE in the ante causam petition against the companies Nation 2 S.r.l., Seatwave Lts, Ticketbis Sociedad Limitada and Viagogo AG in relation to the unlawful on line re-sale of Coldplay’s tickets for the concerts scheduled on July 3 and 4, 2017 at San Siro Stadium in Milan.


 

In October 2016 SIAE filed, before the Court of Rome, an ante causam petition to obtain i) the seizure of the website identified with the domain names www.seatwave.it, www.ticketbis.it and www.viagogo.it (including the IP addresses associated with said domain names, present and future), and/or the seizure of the tickets, of the Italian concerts of Coldplay, offered on sale on these web sites for a higher amount than the offer price, as well as ii) preventive measures, against the companies Live Nation 2 S.r.l., Seatwave Lts, Ticketbis Sociedad Limitada e Viagogo AG, consisting in the prohibition to further commercialize, directly or through third parties, the above mentioned tickets – setting a penalty in case of non-compliance with the order.

The action of SIAE, supported by the intervention in the proceedings of Federconsumatori, was aimed at contrasting the “secondary ticketing” phenomenon, a commercial trend according to which the tickets sold by the reseller authorized by the organizers of the events (so called primary re-seller), once bought through the “official channel”, are sold again on the internet on e-commerce web sites for a price that is consistently superior if compared to the price officially proposed on the primary market.

The Court of Rome has declared that the individual and occasional reselling of concert tickets on the secondary market cannot be considered unlawful according to Italian Copyright Law – not even if the price made is consistently superior than the original one or even if the sale is made through on line web sites which are able to make the transaction easier – because of the lack of rules which recognize in favor of the artists the right to obtain an ulterior reward for any successive resale of tickets which entitles spectators to participate to their events. Equally, the role of hosting provider played by the companies involved should have been considered lawful in itself, as it was executed respecting both national and European rules.

That being said, the Court stated that the secondary ticketing activities executed by the companies involved in the proceedings should have been considered unlawful since, in the case in question, the re-sale of the tickets was made professionally and was organized by the same companies which set up the event and/or that managed the e-commerce web sites, implementing lucrative operations placed between primary resellers and end users, consisting in a substantial avoidance of the disposition made in order to protect the economic rights of the authors, causing an economic prejudice both to the authors represented by SIAE and to the end users.

In light of the above, the Court ruled partially granting the requests made by SIAE, issuing the sole preventive measures consisting in the prohibition to further commercialize, directly or indirectly, on the secondary market the Coldplay’s concert tickets, bought on on line and off line primary market, excluding instead the possibility to  grant the seizure as requested. Since the companies involved own web sites as hosting providers, the seizure of the tickets has been declared impossible because the inability to distinguish which tickets were sold through these web sites between end users (and so licitly) or by the owners of the said web sites.

COURT OF JUSTICE OF THE EUROPEAN UNION: AN OPERATOR WHO PROVIDES ACCESS TO A WI-FI NETWORK IS ALSO SUBJECT TO AN OBLIGATION TO PREVENT INFRINGEMENTS OF COPYRIGHT

25/01/2017

A private person operating a Wi-Fi network with internet access, albeit not directly responsible for copyright infringements carried out by third parties, may be ordered to prevent such third parties from making available to the public a certain work or parts of it protected by copyright, if said person has the option of choosing the technical measures necessary for conforming to the injunction, and even where such choice consists in no more than protecting the Internet connection with a password.


 

With judgment of 15 September 2016 in case C-484/14, the Court of Justice of the European Union affirmed, among other things, the principle that a private person operating a Wi-Fi network with internet access may be subject to an order to prevent third parties from making available to the public a certain work protected by copyright, if such person can adopt the technical measures required for conforming to the injunction. The issue becomes relevant when thinking about a private person operating a Wi-Fi network with internet access (in the case scrutinized by the Court it was one Mr. Tobias Mc Fadden) who not only directly takes part in the infringement of a third party copyright (as an “active” service provider, capable of memorizing and re-transmitting the infringing information, would be able to) but also exercises a function of “mere conduit” of information conveyed by others (and therefore enacts a technical, automatic and passive process for the transmission of the required information).

Among the issues submitted to the Court of Justice by the Regional Tribunal I of Munich was that of the interpretation of directive 2000/31, and more precisely whether it should be understood as establishing an impediment for issuing an injunction to obligate a person who provides access to a free Wi-Fi network from stopping third parties who make available to the public, via the Internet connection and on a sharing (peer-to-peer) platform, a specific work or parts of it protected by copyright, when the provider can choose the technical measures required for conforming the injunction. The technical measures suggested by the German Regional Tribunal included shutting down the Internet connection, protecting it with a password and examining all the information conveyed through the connection.

With regard to the technical measures that may be adopted by the network access provider, the Court initially denied that a supervision of the entirety of the conveyed information could be imposed, in that such measure would contrast with the provisions set out in article 15, para. 1, of Directive 2000/31, which, particularly with regard to providers of access to a communication network, prevents the imposition of a general obligation of supervision on conveyed information. With respect to the option of completely shutting down the Internet connection, the Court held that its implementation would result in a serious violation of the Internet access provider’s right to free trade, in so far as the provider would unfairly be prevented from carrying on its activity. However, the Court also held that the provider must adopt adequate measures, having regard to a proper balancing of the relevant fundamental rights (right to free trade, freedom of information and copyright). The technical measures that may be imposed on the service provider must be sufficiently effective to prevent or, at least, make it difficult to carry out infringements of third party copyright of the work being transmitted via the Wi-Fi network. To that end, the measure involving protection of the Internet connection with a password may discourage users of the connection from infringing copyright or related rights, in so far as said users would be obliged to reveal their identity for the purpose of obtaining the password and thus preventing them from proceeding anonymously.

For these reasons, the Court of Justice ruled on the preliminary issue by holding that a private person operating a Wi-Fi network with internet access may be ordered to adopt reasonable technical measures that are necessary for preventing third parties from making available to the public a specific work protected by copyright. However, the Court specified that the technical measures imposed on the Internet connection provider must be evaluated by the judge on a case-by-case.