Legislative Scrutiny: Equality Bill (second report); Digital Economy Bill - Human Rights Joint Committee Contents


Written evidence


1. Letter and memorandum to the Chair of the Committee from Rt Hon Lord Mandelson, Secretary of State for Business, Innovation and Skills, dated 25 February 2010

DIGITAL ECONOMY BILL

I am grateful for the Committee's Report (HC327) about the online infringement of copyright provisions of the Digital Economy Bill. Detailed responses to the Report's key recommendations are attached. In addition, the Government has tabled a number of amendments to the Bill, which address a number of issues raised both by the Report and in the Committee stage debate on the Bill. Nevertheless, I thought that it might be helpful if I highlighted our views on the four key issues raised by your report.

Copyright infringement reports

We welcome the Committee's recognition that it is unlikely that these proposals alone will lead to a significant risk of a breach of individual internet users' rights to respect for privacy, their right to freedom of expression or their right to respect for their property rights.

The Committee asked for a further explanation of why we think our proposals are proportionate. In essence this is due to two factors. The first factor is the harm suffered from online copyright infringement by those industries that rely on copyright to get a return on the investment of developing, producing and marketing innovative content; we set out further details of this in our attached response below.. The second factor is the difficulties that copyright owners face in using the legal mechanisms available to act against online infringement of copyright, particularly when it is on a mass scale as with peer- to peer file-sharing. Those difficulties centre around the fact that a substantial harm is done by millions of small infringements in the aggregate but the legal mechanisms available mean that separate action must be taken against individual infringers. Copyright owners cannot take action against every individual infringement so a way is needed to identify those responsible for the most serious infringements against whom the cost of legal action is likely to be justified by the harm done by those infringements. The proposals in clauses 4-8 of the Bill will help copyright owners to take action against individuals in relation to infringements causing serious harm in a way that they simply cannot now.

Technical measures

The Government hopes and expects that the initial obligations will produce a significant reduction in online infringement of copyright. However, in the event that this is not sufficient technical measures could be applied - this may include bandwidth shaping or temporary suspension. The Government has not suggested that technical measures should include permanent suspension. Indeed, as was mentioned in the Committee stage debate on technical measures, the dictionary definition of "suspension" is "an interruption or temporary revocation".

The amendments which we have tabled to clause 11 for Report give effect to the Government's graduated approach by providing that technical measures may not be introduced until at least 12 months after the introduction of the initial measures. In addition, we have tabled amendments that provide that the Secretary of State will have to take account of not only any reports produced by Ofcom on the introduction of technical measures but also any progress reports produced by Ofcom about online infringement of copyright. We have already made an amendment to ensure that technical measures under clause 11 can only be introduced in relation to those subscribers who are to be placed on a copyright infringement list under clause 5. Finally, we have tabled amendments for Report regarding appeals against technical measures; this is dealt with further below.

Right to a fair hearing

The Committee suggested that there should be greater clarity about the rights of appeal. The Bill provides for rights of appeal by subscribers to an independent body and, as regards technical measures, a further right of appeal from that body to a First-Tier Tribunal. The amendments which the Government has tabled for Report in relation to the subscribers' right to appeal under the initial and technical obligations provide clarity on the grounds of appeal, what is expected of copyright owners and ISPs by way of proving the existence of an infringement and its connection with a particular subscriber account and what the appeals body can do when an appeal is successful. They also require the technical obligations code to provide that a technical measure is not taken against a subscriber until the appeals process is exhausted and for costs of a successful appeal to be recoverable by the subscriber.

Reserve powers

The Government is clear that the power to amend the Copyright, Designs and Patents Act 1988 would only be used if considered necessary to address problems around online infringement of copyright. If we are to protect copyright we need to deal with nascent and emerging types of copyright infringement in an effective and timely way. And we remain firmly of the view that this power is a crucial tool to provide future proofing in an area of emerging technology. We agree with the Committee that there is a delicate balance to be struck between the right to freedom of expression and the property rights of copyright holders. But we believe that the amendments we have made and the further amendments tabled further narrow its scope and enhance the information that will be available to the Secretary of State and to Parliament in considering any orders made under this provision.

The Government believes that the super-affirmative procedure will provide the opportunity for adequate parliamentary scrutiny, including of human rights issues. The procedure provides that the Secretary of State must have regard to resolutions of either House of Parliament and recommendations of a committee of either House of Parliament charged with reporting on the draft order. This will allow the House to make clear its views on any orders, including any concerns relating to human rights issues. I would also like to offer the Committee an assurance that the explanatory document which must be submitted to Parliament together with the draft of any order will include an assessment of the Government's view of the compatibility of the proposals with human rights obligations.

The Committee asked about which Committees should consider any relevant proposal. That is a matter for the House but the Government would have no objection to the Committee considering any orders made. Should the Joint Committee on Human Rights consider any proposal made under this provision, the Government would consider very carefully any negative recommendation made, given its commitment to human rights.

I hope that you find this letter and the attachment helpful.

ANNEX: MEMORANDUM

DIGITAL ECONOMY BILL: GOVERNMENT RESPONSE TO JOINT COMMITTEE ON HUMAN RIGHTS (HL PAPER 44; HC327)

Below is the Government's detailed response to the Committee's recommendations.

Copyright infringement reports (Clauses 4-8)

2. We consider that despite the lack of information on the face of the Bill, it is unlikely that the operation of these proposals alone will lead to a significant risk of a breach of individual internet users' right to respect for privacy, their right to freedom of expression or their right to respect for their property rights (Articles 8, 10, Article 1, Protocol 1 ECHR). The limited impact on these rights by the operation of the copyright infringement reporting mechanism proposed is likely to be justifiable.

However, in the light of the concerns raised by internet users and human rights organisations, we recommend that the Government provide a further explanation of its views on why these proposals are proportionate, including by outlining the harm currently suffered by individual copyright holders and the wider public interest in promoting creativity, and why that harm cannot be appropriately addressed by existing civil and criminal penalties for copyright infringement. (Paragraph 1.23)

Online copyright infringement is estimated by the creative industries to cost them in the region of £230 m per year. In addition to the losses incurred because of lost sales, this extensive infringement acts as a significant dampener on the ability of the creative industries to build new, commercial, online models due to their inability of compete with "free". This is a threat to the ability of an important part of the UK economy to modernise and develop to take advantage of the significant opportunities offered by the digital age.

Estimates vary, but industry has estimated as many as 6.5m people regularly infringe copyright by filesharing online. Because of the nature of the infringement it is currently impossible for copyright owners to identify those who are infringing their copyright without going to court to get an order to require an ISP to release their name and address. Additionally, they can do so only in regard to a specific individual infringement, rather than focusing their efforts on serious infringers of copyright. This is a costly and time consuming process for the copyright owner and they therefore only do this where they are considering taking legal action against the infringer.

However, research indicates that many of those who infringe online do so because they don't appreciate that it is unlawful or because they don't know how to get access to the material lawfully. The copyright infringement report process established by the Bill will enable subscribers to be sent information which will make it clear to them that their infringement can be detected, that infringement of copyright online is unlawful, where to find legal online sources of content and how to protect their internet accounts to prevent others infringing copyright online over their connection but without their consent. This will introduce a simple, non-confrontational and relatively low cost way of educating the majority of infringers and hopefully changing attitudes and behaviour. As the Committee's report rightly notes, all this would be done without a significant risk of a breach of individual internet users' rights to respect for privacy, their right to freedom of expression or their right to respect for their property rights.

There is considerable evidence from surveys which indicates that people do react positively to notification letters of this type and change their behaviour. Across a range of surveys, typically between 30 and 70% of people surveyed say they would cease any unlawful filesharing activity if they were receiving such letters. A 2009 industry survey of unlawful filesharers indicated that 30% of respondents would stop such activities in response to a single letter with no sanctions implied. There is also some real world evidence to support this - one ISP which sent notification letters to subscribers found some 70% did not re-appear as copyright infringers within 6 months of the first alleged infringement. [11]

As noted in our letter to the Committee, the proposals in clauses 4-8 of the Bill will help copyright owners to take action against individuals in relation to infringements causing serious harm in a way that they simply cannot now. They will provide a way to identify those responsible for the most serious infringements against whom the cost of legal action is likely to be justified by the harm done by those infringements.

The Committee's report also questions the time limits within which infringement reports might be received to contribute to the copyright infringement list. We have proposed amendments for Report stage effectively limiting this to a twelve month period. The report further queried the rights of the individual to appeal against inclusion on a copyright infringement list; again, we have proposed amendments to this effect.

Finally, we would also like to reassure the Committee on the question of the minimum threshold for any copyright infringement list. We cannot see any reason for the threshold to be set at one; the system is designed with regard to multiple infringements, and would be inefficient for all parties with regard to individual infringements.

Technical measures (Clauses 9-16)

4. The lack of detail in relation to the technical measures proposals - and in particular in relation to the scope of technical measures the criteria for their imposition and the enforcement process - has made our assessment of the compatibility of these proposals with the human rights obligations of the United Kingdom extremely difficult. As we have explained in the past, flexibility is not an appropriate reason for defining a power which engages individual rights without adequate precision to allow for proper parliamentary scrutiny of its proportionality. (Paragraph 1.28)

With regard to the Committee's recommendations 3 and 4, we remain of the view that the detail of any technical obligations and the criteria on which they are to be applied can only be considered if and when a decision is taken to introduce such obligations at all. Whilst the legislation does provide a list of illustrative measures we are clear that those are simply the options that seem likely to work at this time. Technology moves fast and by the time we might be considering technical obligations it is quite possible that there may be tools available that we simply don't know of now and conversely those that might be effective today may not be tomorrow.

We accept the Committee's recommendation that legislation must be sufficiently clear to allow proper Parliamentary scrutiny. It remains our intention to provide such clarity. To this end we have proposed amendments at Report Stage, to the process by which any order to introduce technical obligations may be made. Under our new proposals no technical measures can be introduced within a year of the initial obligations code coming into force. In addition the Secretary of State will have to take into account an assessment from Ofcom on whether technical obligations should be introduced and if so, what sort of technical measure, and any reports that Ofcom has produced under clause 9 on the progress of the initial measures.

The Committee also expressed a concern that there is no time limit on potential temporary suspension. I should make it clear that the Government has no intention of cutting anyone off the internet permanently.

Indeed, as was mentioned in the Committee stage debate on technical measures, the dictionary definition of "suspension" is "an interruption or temporary revocation". Furthermore, as the committee recognises, there is also no restriction on a subscriber who is subject to a technical measure taking an account with another internet subscriber. Thus although it is in principle possible for the Secretary of State to require long term suspension it would in practice result in subscribers moving to other ISPs.

This might not undermine the effectiveness of the measure (changing ISP is not without cost and difficulty, especially if you are part way through a contract) since people are unlikely to want to have to change ISPs regularly, but it would mean that no-one would be forced to be without an internet connection for an extended period of time. Under his duty in the Human Rights Act, the Secretary of State will need to be satisfied that any criteria set out in an order imposing technical measures are proportionate. And as we note below, the code governing technical measures would be scrutinised for proportionality before it could be implemented.

5. We reiterate our invitation to the Government to provide fuller justification for its proposals. (Paragraph 1.38)

In our response to your recommendation (2) above, we expanded on our case for the initial obligations proposed in the Bill. In relation to the justification for technical measures, we have said that we hope and expect that the initial obligations will lead to a significant drop in online copyright infringement. If that does not happen and the widespread and substantial harm to the creative industries continues then it will be important to take some steps to resolve the problem. Our proposals with regard to technical measures are intended to prevent or reduce infringement by limiting internet access where a subscriber's account is associated with significant and repeated infringements, despite all efforts to reduce this by other means.

In the 2009 BPI industry survey of unlawful file-sharers mentioned in our response to (2), further responses indicated that adding the potential for a sanction in the case of continued infringement may result in a reduction of 60 -70% of such activity.

We believe that the process we are putting in place in the Bill, with repeated warnings to those whose accounts are associated with multiple infringements, coupled with advice on how to ensure that internet connections are not subject to abuse, will give subscribers a reasonable opportunity to ensure that copyright infringement on their account is stopped. If this does not happen it is reasonable to take further action to prevent or reduce such infringement.

We are providing subscribers with a right to appeal at any stage of the process. At appeal the onus will be on the copyright owners and ISPs to prove that an infringement did take place and that it was associated with the relevant account. Furthermore, if the subscriber can show that they did not carry out the infringement, and that they took reasonable steps to prevent others from using their account to infringe then the appeals body will uphold the appeal. Any technical penalties will be designed to make it impossible, or more difficult to infringe copyright and we will expect Ofcom, in any reports under clause 10 - and the Government and Parliament, in considering any order under clause 11 - to look at the extent to which any proposed technical measure will have unintended consequences in case these might make it disproportionate.

We have further introduced an amendment to allow the appeals body to require the measure not to be taken or substitute another technical measure if there are exceptional circumstances that justify it.

7. There are a number of issues which could helpfully be clarified; some on the face of the Bill, in order to reduce the risk that these proposals could operate in a manner which may be incompatible with the Convention. We recommend that the Minister clarify:

a) the precise intended impact of these proposals on individual accounts, including (i) whether technical measures may include indefinite suspension of an account and whether any service limitations imposed will be for a specified time-frame and/or renewable; and (ii) any potential impact the imposition of technical measures may have on the ability of a user to secure an alternative service; (Paragraph 1.40)

b) the minimum criteria which would be required to be satisfied before the imposition of technical measures. The Government has indicated that technical measures will follow the issue of copyright infringement notices. It would be helpful if the Government could clarify whether (i) the imposition of technical measures will be subject only to the initial assessment of the copyright holder that it appeared that the individual service user had breached his or her copyright; and (ii) if so, would the same standard of evidence and proof be required for the imposition of technical measures as would be required for the issue of copyright infringement reports? (Paragraph 1.40)

In relation to (7a), please see our answer to the Committee's recommendation (3) above. The Bill does not explicitly rule out indefinite suspension but we do not believe it would be a useful or practical option for the reasons set out above. The Bill does not place any restriction on a subscriber in relation to securing an alternative service.

In relation to b) we have now tabled amendments which make it clear that the imposition of technical measures can only be applied to some or all of the subscribers who meet the criteria to be on the copyright infringement lists - i.e. those who have passed the threshold set out in the code (most likely to be based on the number of CIRs received over a period of time). The standard of evidence expected in the first instance will, therefore, be the same as that required for a CIR, but in respect of multiple CIRs. As mentioned above, the subscriber will have the right to appeal at any time, and at such an appeal the copyright owner and ISP will have an obligation to prove the copyright infringement and its association with the particular subscriber account.

8. We recommend that the Bill be amended to make it clear that technical measures may only be introduced after an assessment by OFCOM of the necessity and proportionality of these new measures taking into account the impact of the initial obligations code. In so far as it is possible, we recommend that the Bill should be amended to provide additional details on the minimum criteria for the imposition of technical measures including the standard of proof which must be applied; the "trigger" for the imposition of such measures; and any relevant defences for service users who have taken all reasonable measures to protect their service from unauthorised use, and who have not knowingly facilitated the use of their service for the purposes of infringing copyright. (Paragraph 1.41)

We agree that Ofcom's assessment is crucial to the decision to proceed with technical measures, if needed. In Committee we made clear our intention - delivered by our proposed amendments - that technical obligations should not be introduced until a minimum period of 12 months from the coming into effect of the initial obligations code. The Government also agrees that the Secretary of State should take into account an assessment by Ofcom under clause 10 and any reports produced under clause 9. The Secretary of State's consideration of Ofcom's assessments under clause 10 will cover the necessity and proportionality of these new measures.

On defences and levels of proof, please see our answers to the Committee's recommendation 5 and 7. We have tabled amendments which make it clear that at appeal the starting point is that the copyright infringement and its association with a particular subscriber account will have to be proved. If the subscriber can demonstrate that they did not carry out the infringement, and that they took reasonable steps to prevent other people from infringing copyright on their account then the appeal will be upheld.

Right to a fair hearing (Article 6 ECHR)

9. We accept that there is no clear answer to whether the decisions taken during the process of issuing copyright infringement reports and infringement lists involve the determination of any individuals' civil rights and that it is unlikely that Article 6 ECHR is engaged. However in the light of the acceptance by the EU that a fair process is necessary for regulation of individual service users' access to the internet we consider that statutory provision for a right to appeal to an independent body against inclusion on any infringement list at this stage would lead to a fairer procedure and so be a human rights enhancing measure. (Paragraph 1.44)

The amendments the Government has tabled for Report provide further clarity in relation to the subscribers' right to appeal under the initial and technical obligations - the grounds on which they can appeal, what is expected of copyright owners and ISPs by way of proving the existence of an infringement and what the appeals body can do when an appeal is successful. In particular, we are proposing amendments to provide the following protections:

  • Clarification of possible grounds for appeal.
  • An explicit requirement that at appeal the onus will be on the copyright owner to prove an infringement occurred and on the copyright owner and ISP to prove that it was properly associated with the subscriber's account.
  • A provision that if an appeal is on the ground that there was no infringement of copyright or that it was not right to associate this with the subscriber's account and the appeals body is satisfied that the subscriber did not carry out the infringement, it should uphold the appeal if satisfied that the infringing act was not done by the subscriber and that the subscriber has taken reasonable steps to prevent others using his account to infringe copyright.
  • Provision that the appeals body may use its discretion not to uphold the imposition of a technical measure, or may impose an alternative measure, in the light of the particular circumstances of a particular case or user.
  • Following the report from the Committee, provision that a subscriber who successfully appeals may recover the costs of the appeal.

11. Without a clear picture of the criteria for the imposition of technical measures, it is difficult to reach a final conclusion on the fairness of the substantive decision making process for the imposition of technical measures and its compatibility with Article 6 ECHR and the common law. We recommend that at a minimum, the Government must be required to confirm that the First Tier Tribunal will be able to consider whether an infringement of copyright has occurred and any defence that no infringement of a copyright holders' rights has been committed or knowingly permitted by the account holder. Further information about the quality of evidence to be provided and the standard of proof to be applied should be provided, ideally on the face of the Bill, and at a minimum by the Minister during the course of debates on these provisions. In addition, we recommend, for the avoidance of doubt, that the Bill require that the technical obligations code must provide for any appeal rights to suspend the application of technical measures and for costs of any successful appeal to be recoverable by any successful applicant. (Paragraph 1.50)

We appreciate the importance of this issue and believe that the amendments to the appeals provisions of the Bill described above that we have tabled for Report meet the concerns of the Committee. Our amendments also require the technical obligations code to provide that a technical measure is not taken against a subscriber until the appeals process is exhausted and for costs of a successful appeal to be recoverable by the subscriber.

Reserve powers (Clause 17)

12. In the light of the breadth of this proposed reserve power and the need for a delicate balance to be struck between the right to freedom of expression and the property rights of copyright holders in any changes to copyright law, we are concerned that Clause 17, as amended, remains overly broad. (Paragraph 1.55)

13. We welcome the Government's decision to introduce the use of the super-affirmative procedure. However, we recommend that:

a) The Minister should explain why parliamentary scrutiny of any relevant human rights issues will be adequate without any power for Members of either House to propose amendments to the draft order. (Paragraph 1.56)

b) Any explanatory memorandum accompanying an order made under Clause 17 should include an assessment of the Government's view on the compatibility of the proposals with the human rights obligations of the United Kingdom, including the European Convention on Human Rights. (Paragraph 1.56)

c) The Government should be required to clarify which Committees it would consider 'charged' to report on any relevant proposal, other than the Joint Committee on Statutory Instruments (JCSI). We are not required to report on any secondary legislation other than remedial orders laid under the Human Rights Act 1998, but we do report from time to time on proposals in secondary legislation which we consider raise particular human rights concerns. We would be grateful if the Government would explain how a negative recommendation from our Committee or its successors would affect the Government's approach to an order. (Paragraph 1.56)

Breadth of the power

The Government remains firmly of the view that there is a need for this power. It is, in our judgement, the most effective and proportionate way to ensure that we do not have to continually react to crises but can consider and act within specified limits if Parliament agrees and depending on the results of consultation. While the power is necessarily flexible in order to function as intended and allow future unknown challenges to be addressed, the safeguards surrounding its use, and the wording of the clause itself, limit its application to a specific focus.

For example, the power cannot be used to create or amend criminal offences. Due to the way the Copyright Designs and Patent Act is structured, this means that no changes can be made to the definition of an infringing act, i.e. what is lawful and reasonable now, will remain so in the future. Furthermore, the power can only be used to address 'on-line infringement of copyright' as explicitly stated in the clause. This again targets the allowable uses of the power at just those issues it is intended to address. The power cannot be used to make arbitrary changes to copyright law for other purposes.

Nevertheless, we have proposed an amendment which makes clear that the scope of the clause is limited to Chapter 6 of Part 1 of the Copyright Act, which deals with "Remedies for Infringement". This makes clear that the clause can only be used to change civil enforcement measures (the power cannot be used to create or modify a criminal offence, already an important and proper restriction), not the definition of what constitutes copyright infringement.

Super affirmative procedure

As detailed in the amended clause, super affirmative procedure introduces a number of safeguards to the exercise of the power. One of these is that a draft order cannot continue through parliament if a relevant Committee of either House recommends that it does not. This means that if, for example, the Joint Committee on Human Rights recommended against any planned used of the power, no further progress could be made unless the recommendation of the Committee is overturned by resolution of the whole House. Given the support shown by all parliamentarians for Human Rights considerations, this in effect provides a very powerful safeguard against misuse.

It is best practice that any legislative proposal with Human Rights implications should be accompanied by an assessment of those implications when introduced to parliament. It would certainly be the Government's intention to provide for such an assessment to accompany any order made under this power if there are any Human Rights implications to the content of that order.

Given the freedom of Committees of both Houses to consider statutory instruments if they raise concerns in their particular areas of practice, we do not consider it is appropriate for the Government to say which Committees would consider themselves 'charged' to report on a draft order made under this power. If a draft order made under this power had Human Rights implications of any sort, then it would certainly seem that the Joint Committee on Human Rights could consider itself charged to report on the order. As such a negative recommendation would have the effect detailed above, and stop the progress of the order unless subsequently overturned by the whole House.


11   IPOS 2006 survey; Harris Survey (2009) commissioned by the BPI; THUS response to the BERR P2P 2008 consultation. Back


 
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