VIENNA, Austria — In a preliminary ruling that could have an enormous effect on online commerce in Europe, an Austrian court has ruled that YouTube is not a neutral host provider and must prevent third parties from uploading copyright infringing content.
The Commercial Court of Vienna, in a decision seeking monetary damages that can be appealed, held that YouTube “leaves the role of a neutral mediator” through interconnecting, sorting, linking, providing content tables with predefined categories, tracking the search behavior of users and making custom surfing suggestions.
If the ruling is upheld, it could have a major impact on not just YouTube but all other parties that host third-party content in Europe.
Online companies, including those in the adult entertainment industry that offer user-generated content in Europe, would have to comply and monitor sites or potentially face punitive damages if the decision stands.
The decision stems from a suit filed by Austrian TV channel Puls4 after it found copyright-protected content that was posted on YouTube.
In a rebuttal, YouTube argued that it operated solely as a host provider, and therefore fell under the provisions of the European Union's E-Commerce Act, which stipulates technical service providers are intermediaries and not liable for the content posted by their users.
But the court said that YouTube, because it includes such sorting, filtering and linking on its platform, can’t be considered a “neutral mediator.”
YouTube, in a statement issued today, said that it was analyzing the ruling and “holding all our options open, including appealing” it.
YouTube and Puls4 have one month to petition the Commercial Court of Vienna before it issues a binding ruling.
If the preliminary ruling stands, it is expected YouTube will appeal.