Digital Economy Act 2010
Parliament of the United Kingdom
|Long title||An Act to make provision about the functions of the Office of Communications; to make provision about the online infringement of copyright and about penalties for infringement of copyright and performers’ rights; to make provision about internet domain registries; to make provision about the functions of the Channel Four Television Corporation; to make provision about the regulation of television and radio services; to make provision about the regulation of the use of the electromagnetic spectrum; to amend the Video Recordings Act 1984; to make provision about public lending right in relation to electronic publications; and for connected purposes.|
|Chapter||2010 c 24|
|Introduced by||Lord Mandelson|
|Territorial extent||England and Wales, Scotland and Northern Ireland|
|Royal Assent||8 April 2010|
|Related legislation||Copyright, Designs and Patents Act 1988, Communications Act 2003, Video Recordings Act 1984|
|Status: Current legislation|
|Text of statute as originally enacted|
|Official text of the Digital Economy Act 2010 as in force today (including any amendments) within the United Kingdom, from the UK Statute Law Database|
The Digital Economy Act 2010 (c. 24) is an Act of the Parliament of the United Kingdom regulating digital media. Introduced by Lord Mandelson, it received Royal Assent on 8 April 2010, and came into force on 8 June 2010 (with the exception of certain sections that came into force on 8 April; and certain other sections that will be brought into force by statutory instrument).
The act has been subject to judicial, parliamentary and regulatory review since coming into force.
Online infringement of copyright 
Section 3 to 16 
The Act's provisions against the act of copyright infringement proved controversial. It establishes a system of law which aims to first increase the ease of tracking down and suing persistent infringers, and after a minimum of one year permit the introduction of "technical measures" to reduce the quality of, or potentially terminate, those infringers' Internet connections. It also creates a new ex-judicial process to handle appeals.
The new process will come into force when Ofcom's regulatory code is approved by Parliament. It begins with rightsholders gathering lists of Internet Protocol addresses which they believe have infringed their copyrights (this data could be gathered by connecting to a Peer-to-Peer download of a work one owns, and noting the other IP addresses to which one's computer connects). They would then send each IP address to the appropriate Internet Service Provider, newly-defined in the Act as a provider of IP addresses, along with a "copyright infringement report".
The ISP must then determine whether the infringement report is valid and send a notification to the subscriber in question if it is. The standard of evidence required at this stage is not specified in the Act, but left to be defined in Ofcom's regulatory code. The report and the subscriber it refers to are recorded by the ISP, but no further action is taken.
The next stage in proceedings involves the rightsholder requesting a "copyright infringement list" from the ISP. This contains an anonymous list of all subscribers who have "reached the threshold set in the [Ofcom] code" with regard to infringement reports for the rightsholder's works. The rightsholder can then approach a judge to gain a court order to identify some or all of the subscribers on the list, and with that information launch standard copyright infringement litigation against them.
Ofcom's code 
Most operational details of the copyright infringement provisions are not defined in the Act, but left to a series of regulatory codes produced by Ofcom. The Act defines only the utmost limits within which these codes can work. On 28 May 2010 Ofcom published a draft initial obligations code for consultation.
According to the Act Ofcom must produce "progress reports" once every three months on the levels of copyright infringement in the country, with a larger report coming once every 12 months.
Technical measures 
After Ofcom's code has been in force for one year, the Secretary of State becomes able to lay down an order for ISPs to impose "technical measures" on subscribers who meet the copyright infringement report threshold (see above). These measures may limit Internet access in any way, including suspending it entirely. Unlike other areas of the Act Ofcom do not produce a code that defines what the measures are (though they are responsible for enforcing them): instead the Secretary of State decides all specifics, needing only to "take into account" Ofcom's recommendations.
The Act requires the provision of an independent appeals process, covering the grounds on which infringement reports are made. Cases are heard by a body set up by Ofcom, or if a technical measure has been applied a First-tier Tribunal.
Unlike in judicial appeals, the subscriber is innocent until proven guilty: the Act states that "an appeal on any grounds must be determined in favour of the subscriber unless the copyright owner or internet service provider shows that a) the apparent infringement was an infringement of copyright, and b) the report relates to the subscriber’s IP address at the time of that infringement". An appeal will also succeed if the subscriber can show that the rightsholder or ISP broke Ofcom's regulatory code in any way.
Obligations on ISPs and copyright holders 
The Act gives Ofcom the responsibility of enforcing ISPs' obligations. A fine of up to £250,000 can be levied on ISPs in contravention; that limit can be raised by the Secretary of State with Parliament's consent.
The Act also allows the Secretary of State to define, with the consent of Parliament, the "sharing of costs" incurred from the Act's legal processes. The order can require reimbursements to be made by rightsholders and/or ISPs, and in the case of appeals, subscribers.
Section 17 and 18 - Blocking Internet locations 
- This section of the Act is due to be removed.
The Act allows the Secretary of State - with the consent of the Lord Chancellor, upper and lower houses of Parliament and a court of law - to block access to a location on the Internet "from which a substantial amount of material has been, is being or is likely to be made available in infringement of copyright", or a location which "facilitates" such behaviour.
In deciding whether to grant an injunction, the court is required to consider:
- Steps taken by the operator of the location to prevent infringement
- Steps taken by the copyright owner to facilitate lawful access to the material
- Any representations made by a Minister of the Crown
- Whether the injunction would be likely to have a disproportionate effect on any person’s legitimate interests
- The importance of freedom of expression
The Secretary of State must be satisfied before making the request that the location is "having a serious adverse effect on businesses or consumers", that the injunction "is a proportionate way to address that effect", and that "making the regulations would not prejudice national security or the prevention or detection of crime".
Other provisions 
Other provisions in the Act include an amendment to the Copyright, Designs and Patents Act 1988 to increase the criminal liability for "making or dealing with infringing articles" and "making, dealing with or using illicit recordings" in the course of business to a maximum of £50,000.
Age classification of content is also in the Act, which adopts the Pan European Game Information (PEGI) standard for video game ratings. The UK government is also able directly to intervene to control the use of the UK's domain name space, currently overseen by the independent body Nominet.
The Act also includes changes to DAB radio in the United Kingdom including the reorganisation and merging of some of the local DAB ensembles and a requirement for a digital switchover of terrestrial radio in the United Kingdom.
Further measures included:
- The management of
.ukInternet domain registries
- The functions of the Channel Four Television Corporation
- The regulation of television and radio services
- The regulation of the use of the electromagnetic spectrum
- The Video Recordings Act 1984
- Public lending right in relation to electronic publications (Authors receive a 10p royalty for physical books lent from UK libraries but not ebooks. This act extends that royalty to cover some ebooks and audio books lent by libraries electronically. However the appropriate legislation has not yet been amended for this to take place. http://www.plr.uk.com/registrationservice/faq.htm#sound )
The Digital Economy Act followed the Digital Britain report of 2009, a policy document which outlined the United Kingdom Government's strategic vision for its digital economy. Lord Carter, the former Digital Britain minister and Downing Street special adviser spent eight months considering the matter along with 25 civil servants for the report, released in June 2009. However, the proposed bill reversed Lord Carter's recommendation against cutting off internet access for alleged copyright infringement. The Digital Economy Bill was announced in the 2009 Queen's Speech before the United Kingdom parliament. The first reading of the bill was presented to the House of Commons of the United Kingdom on 16 March 2010. The bill received its second reading on the 6 April 2010 in a Commons debate and was given support by the Conservative front bench and as expected was not debated at length in the Commons, and was instead pushed through in the wash-up period. It passed third reading on 7 April with Royal Assent granted on 8 April. The Act is in force although none of the sections relating to online piracy (ss.3-18) have been implemented.
After the general election had been called, and before the dissolution of parliament the Digital Economy Bill entered what is called wash-up. The wash-up is an accelerated parliamentary process used after general elections have been called to rush unopposed legislation through parliament before dissolution. During the wash-up Conservative and Liberal Democrats introduced Clause 17 on website blocking for copyright infringement into the bill. Clause 17 was initially proposed by Liberal Democrats in the House of Lords, however Liberal Democrat parliamentarians subsequently tried to retract the amendment. Clause 17 was further amended in wash-up and became law as Sections 17 and 18 of the Act. Website blocking was not part of the approach proposed in the Digital Britain Report. In return for supporting the Digital Economy Bill in the final wash-up vote the Conservatives demanded the removal of Clause 43 which related to orphan works, copyrighted works for which the copyright owner cannot be located, which had been criticised by photographers. Other clauses that were removed during wash-up included provisions for the funding of regional news consortia.
Copyright infringement provisions 
The Secretary of State Lord Mandelson was widely believed to be responsible for the copyright infringement provisions that would see the disconnection of internet connections associated with copyright infringement by copyright owners. The provision of the bill which gives the Secretary of State the power to introduce such technical measures were highly controversial and were criticised by digital rights campaigners. Jim Killock, executive director of the Open Rights Group called the bill "an utter disgrace. This is an attack on everyone's right to communicate, work and gain an education." He said that "politicians have shown themselves to be incompetent and completely out of touch with an entire generation's values".
The Open Rights Group, privacy and consumer rights organisations criticised the online copyright infringement provisions of the bill, now section 3 to 18 of the Act, due partly to its proposal of a graduated response scheme, which may (if regulators and parliament feel the Act is not having enough impact) eventually reach as far as disconnecting Internet accounts used for persistent copyright infringement. The Group took their concerns to the House of Lords. Concerns have also been raised about the impact on businesses offering Internet access to their customers, such as libraries and universities.
38 Degrees, who worked with the Open Rights Group to mobilise opposition to the act, state that over 22,000 people have emailed their MPs through their web site. 38 Degrees have also raised over £20,000 in donations to fund newspaper ads against the bill. More than 35,000 people signed a Number 10 petition, started by Andrew Heaney at ISP TalkTalk, objecting to being disconnected without fair trial. Over 100 people protested outside Parliament on 24 March 2010, including Labour MPs Tom Watson and John Grogan, Liberal Democrat prospective parliamentary candidate Bridget Fox, and writer and activist Cory Doctorow.
TalkTalk, Britain's second-largest ISP, has been a vociferous critic of the Act. They opposed it from its earliest stages by staging media events, declaring that they would fight against the new laws in court, and commissioning research to demonstrate that music fans would simply transition to other, non-P2P tools (such as "applications which scan thousands of internet radio stations and download the desired tracks"). TalkTalk have also argued that the requirement in Ofcom's draft code of conduct that only ISPs with 400,000 customers or more would initially be subject to the Act "could [lead to] huge swathes of customers moving to smaller ISPs to avoid detection". BT said that they felt compelled to act "for our customers who otherwise run the risk of being treated unfairly".
Industry Lobbying 
In August 2009 Lord Mandelson has been accused of caving into a "big lobbying operation" after ordering for disconnection to be included in the Digital Economy Bill even though the Digital Britain report had rejected this type of punishment. The Independent reported that according their Whitehall sources First Secretary of State Peter Mandelson was persuaded that tough law were needed to reduce online copyright infringement following an intensive lobbying campaign by influential people in the music and film industry. The paper also reported that this included a meeting with DreamWorks co-founder David Geffen at the Rothschild family villa on the Greek island of Corfu. Lord Mandelson's spokesperson claimed that there had been no discussion of internet piracy during the Corfu dinner and suggested that the decision to reverse Lord Carter's findings had been taken in late July before the trip. The Times reported after the Corfu meeting that an unnamed Whitehall source had confirmed that before this trip, Mandelson had shown little personal interest in the Digital Britain agenda, which has been ongoing for several years. According to The Times, Mandelson returned from holiday and effectively issued an edict that the regulation needs to be tougher. At the time Mandelson denied that the two events were linked.
In August 2011 a Freedom of Information (FOI) request showed that Lord Mandelson had decided to approve the inclusion of technical measures, such as the disconnection of internet access, at least two months before public consultation had finished, and that he had shown little interest in the consultation. Letters from Lord Mandelson's office document talks with Lucian Grainge, CEO of Universal Music Group on the 2 June 2009, and that on the following day Lord Mandelson advised Lord Carter about the "possibility of [the Secretary of State] having a power to direct Ofcom to go directly to introduce technical measures". Mandelson made the formal announcement that technical measures, including disconnection, were to be included in the Digital Economy Bill two months later on the 7 August 2009.
LSE report 
A March 2011 report by the London School of Economics and Political Science concluded that the Act had "the balance between copyright enforcement and innovation wrong" and that it "focused on efforts to suppress the use of technological advances to protect out-of-date business models", which would "stifle innovation".
It suggested instead "providing user-friendly, hassle-free solutions to enable users to download music legally at a reasonable price".
Political opposition 
The UK's three major parties played a part in the passing of the bill into law, the Pirate Party UK were strongly opposed to it. The Green Party, whose Members of the European Parliament (MEPs) sit with the two Swedish Pirate Party MEPs in the same group, opposed the bill. "The Digital Economy Bill is deeply flawed and illiberal. ... Any Green MPs will provide a rallying point for opposition to the Digital Economy Bill." The Liberal Democrats opposed the parts that relate to the blocking of people's Internet connections. These parts were later dropped by the Conservative and Liberal Democrat coalition Government (see below).
The Design and Artists Copyright Society and the British Association of Picture Libraries and Agencies support the orphan works provision. The Community Media Association supports the Act for the radio clauses stated to bring significant benefits to the community broadcasting sector as FM spectrum becomes available following digital radio switchover. Attitudes of Internet Service Providers (ISPs) towards the copyright infringement provisions in the bill were mixed. In interviews with ISPs by TechRadar, Virgin Media said that they shared the commitment to address copyright infringement, but that persuasion not coercion is the key; a heavy-handed, punitive regime would simply alienate Internet users. Sky, which is both an ISP and a content provider, was supportive of the government's commitment to underpin the fight against illegal file sharing through legislation, but not directly of the 'website banning' proposal.
Reviews of the copyright infringement provisions 
Judicial review 
On 8 July 2010 TalkTalk were joined by BT, Britain's biggest ISP, in seeking a judicial review of the Act on the grounds of it receiving "insufficient scrutiny" and having the potential to "harm citizens and impact both businesses". They questioned whether the provisions were proportionate, respected privacy law, complied with EU law on ISP liability, and suggested that they would hinder a single European market in telecommunications services.
The High Court of Justice granted the review permission on 10 November 2010. Mr Justice Kenneth Parker ruled in favour of the government on 20 April 2011. BT and TalkTalk sought permission to appeal the ruling, but were denied.
Parliamentary inquiry 
On 10 November 2010 (the same day as the judicial review), the Culture, Media and Sport Committee of Parliament announced an inquiry into the act. The inquiry will consider "the implementation, practicality and likely effectiveness of the relevant measures contained in the act", and "the scope for additional and new approaches to ensure that original work is appropriately rewarded in online".
Ofcom review of sections 17 and 18 
Following calls by citizens to repeal all or part of the Digital Economy Act on the Your Freedom website, the government asked Ofcom in February 2011 to review whether sections 17 and 18 of the Act on website blocking are technically workable.
Following the review by Ofcom, the Government announced on 3 August 2011 that sections 17 and 18 of the Act were to be dropped as they were not practically enforceable, and also as the Copyright, Designs and Patents Act 1988 had been successfully used to block access to a website on the grounds of copyright infringement.
Cost of implementation 
In response to a Freedom of Information (FOI) request Ofcom disclosed that it had spent £1.8 million in the 2011/12 financial year on the implementation of the online copyright infringement provisions, section 3 to 16 of the Digital Economy Act, and the site blocking provisions, section 17 and 18. Ofcom planned to spend another £4.0 million in 2012/13. These figures include £100,000 spent on reviewing the technical workability of section 17 and 18, a review commissioned by the Government in February 2011. According to Ofcom the Digital Economy Act provides that internet service providers and copyright owners bear the cost of section 3 to 16, including the cost to Ofcom and an appeals body. They are also liable to pay Ofcom's cost incurred prior to actual implementation. However, Ofcom notes that the April 2011 ruling by the High Court on the judicial review of the online copyright infringement provisions provides that internet service providers are not liable to pay towards Ofcom' cost or that of an appeals body.
See also 
- Internet censorship in the United Kingdom
- British Phonographic Industry (BPI)
- International Federation of the Phonographic Industry (IFPI)
Related international law 
- EU Copyright Directive (European Union)
- DADVSI & HADOPI law (France)
- Digital Millennium Copyright Act (USA)
- Ley Sinde (Spain)
- Telecoms Package (European Union)
- Telecommunications Plc & Anor, R (on the application of) v The Secretary of State for Business, Innovation and Skills  EWHC 1021 (Admin) (20 April 2011)
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