Recently, we have seen many rumours and half-truths about ACTA being circulated by campaigners on all sides. And, as the European Commission’s “fact sheet” 10 Myths about ACTA
shows, there are also still a lot of misunderstandings. Many decision makers and citizens seem not yet to be aware of ACTA’s serious implications.
In the following, we are focusing on the real problems and most important issues in ACTA:
- ACTA and its Impact on Fundamental Rights
- Privatised enforcement outside the rule of law
- Suspiciousless mass surveillance in violation of the Charter
- Undermining democracy, fundamental freedoms and the rule of law
- ACTA – Criminal Sanctions
- “Indirect” economic advantage
- What does this mean in practice?
- Conflict with existing international law –
- Conflict with European Parliament’s existing position
- ACTA – Innovation and Competition
- Chilling effect on innovation
- Anti-competitive consequences
- Competitive advantage for the USA
- ACTA and its Impact on the EU’s International Relations
- Concerns expressed by developing countries
- European Parliament Study points out exclusive nature of ACTA
- Ignoring the EU’s obligation to support the rule of law
- ACTA and its “Safeguards”
- Criminal sanctions restricted to “commercial scale” infringements
- Disclosure of information
- Digital chapter and support for “fundamental principles”
- Imbalance of rights
ACTA and its impact on fundamental rights
The Internet has become a key enabler of rights such as the fundamental rights to communication and
association. Any legislation which aims to regulate this medium must therefore be carefully considered to
ensure compatibility with the Charter. At least as importantly, when dealing with countries with less robust
fundamental rights protections, the EU must take care that any Internet-related policies it promotes fully
respect the EU’s Treaty obligation to consolidate democracy and the rule of law in its international relations.
Privatised enforcement outside the rule of law back
In Article 27, ACTA imposes an obligation on States to support “cooperative efforts with the business
community” to enforce criminal and civil law in the online environment. This obligation legitimises and
promotes the policing and even punishment of alleged infringements outside normal judicial frameworks.
The scale and extent of such measures is to be decided by private companies. More worrying still, a leaked
document published by the European Parliament itself, gives disconnection of users as an example of the
private sanctions that could be imposed in such “cooperation”. Worse, ACTA does not ensure effective
remedies against such interferences with fundamental rights: vague references to “fair process” in the text
are not backed up by mandatory processes requiring respect for the Rule of Law (Article 21 TEU).
The UN Special Rapporteur on Freedom of Expression warns of the dangers of this approach in his most
recent Annual Report: “[I]ntermediaries, as private entities, are not best placed to make the determination of
whether a particular content is illegal, which requires careful balancing of competing interests and
consideration of defences.”
Suspiciousless mass surveillance in violation of the Charter back
ACTA requires Internet intermediaries to disclose the personal information of alleged infringers to
rightsholders – along the lines of the current IPR Enforcement Directive, which is causing major problems for
citizens right across Europe. The practical effects of this Directive have never been assessed and the review
process is now starting. There is already evidence of serious problems with this approach, as shown
(particularly in Germany and the UK) by lawyers and alleged rightsholders using coercive tactics against
innocent users. They use the information obtained under the Directive to contact consumers and give them a
“Hobson’s choice” between a costly court battle or a “settlement” payment.
ACTA envisages disclosure orders to cover “alleged infringers” in addition to “infringers”. The text also
explicitly places the interests of rightsholders ahead of free speech, privacy, and other fundamental rights.
The EDPS warns that ACTA could lead to the “unnoticed monitoring of millions of individuals and all users,
irrespective of whether they are under suspicion”, and “the systematic recording of data [on Internet use]“
The ECJ recently ruled that such suspiciousless mass monitoring of Internet users is incompatible with the
ACTA flagrantly breaches this case-law.
Undermining democracy, fundamental freedoms and the rule of law back
ACTA jeopardises free speech by prioritising private-sector repressive measures aimed at copyright
protection over the fundamental rights to privacy and freedom of communication and association – rights that
are prerequisites of democracy – without guarantees of due process and equality of arms.
In Europe, this violates the European Convention on Human Rights and the EU Charter of Fundamental
In the context of international cooperation, this is a clear violation of Article 21 of the TEU which requires
support for democracy and the rule of law in the Union’s international relations.
1 Treaty on European Union, Article 21
2 Article 27.2 & Article 8.1, ACTA
4 Report of the UN Special Rapporteur on the promotion and protection of the right to freedom of opinion and expression
http://www.ohchr.org/Documents/Issues/Opinion/A.66.290.pdf (Page 12)
5 One prominent example: Law Society Gazette: “Two solicitors accused over file-sharing ‘bully tactics’” http://bit.ly/9aHDEn
6 This is unequivocal in, for example, footnote 13
8 See cases C-70/10 (Scarlet/Sabam) in particular, as well asC-275/06 (Telefonica/Promusicae) on balance of rights.
ACTA – Criminal sanctions
In theory, most policy-makers agree that intellectual property legislation should focus on ensuring that
dangerous products are not sold and that industrial-scale misuse of protected material should be targeted.
Despite the fact that such an approach is essential for proportionality, ACTA fails to deliver on both of these
priorities. It attempts to address potentially life-threatening physical products and duplication of digital
material as if these two very different phenomena were of the same importance and functionally identical.
“Indirect” economic advantage back
ACTA provides an extremely low threshold for imposing criminal sanctions. Article 23.1 starts by limiting (as
a minimum that can be exceeded by parties) criminal procedures/penalties to wilful offences undertaken on
an undefined commercial scale. It then broadens the scope to “acts” which are for direct commercial
advantage but also for, also undefined, “economic advantage” or “aiding and abetting” (also undefined).
Such unclear wording is simply inappropriate in a key provision, on whose meaning the proportionality and
the legality, of the Agreement rests. As the EDPS stated, “the ‘commercial scale’ criterion is decisive”.
What does this mean in practice? back
A member of the German parliament unintentionally put multiple copyright-protected images on his website.
Large numbers of visits to the page led to a “commercial scale” reproduction of the image. He received an
“indirect economic” advantage by not paying for the images and his service provider “aided and abetted” the
“infringement” by not taking action against this repeat “offender”. Is he or his Internet provider a criminal?
According to ACTA, they are. Unquestionably.
Conflict with existing international law – World Trade Organisation (WTO) back
The European Parliament has stated (resolution of 24 April, 2008) that “the WTO plays a key role among the
multilateral organisations which contribute to international economic governance.” However, the Parliament
study on ACTA highlights the fact that the proposed Agreement’s focus on intent (“wilful” “offences” for “direct or indirect” “economic or commercial” advantage) contradicts the recent WTO decision, which defined
commercial scale in relation to the “typical or usual commercial activity with respect to a given product in a
given market”. The Parliament study comes to the conclusion that “[i]t must therefore be considered that
ACTA is not in line with the WTO Panel decision”.
Conflict with European Parliament’s existing position back
When previously seized to give a position on criminal sanctions for IPR enforcement , the European
Parliament adopted two amendments on “commercial scale” in order to ensure a degree of proportionality:
- it requested that acts “carried out by private users for personal and not-for-profit purposes” be
excluded. In the absence of a de minimis clause, a definition of “commercial scale” and a definition of “indirect economic advantage”, ACTA contradicts this amendment;
- it requested that “fair use” of works for comment, criticism, news reporting, teaching, scolarship and
research be excluded from the scope. ACTA’s provisions directly contradict this approach.
The fact that the Commission ignored the Parliament’s demand for a de minimis clause in the ACTA negotiations reinforces the damage done by ACTA’s lack of clarity. It will inevitably lead to restrictions on the right to communication both in the EU (at least until ruled illegal by the Court of Justice) and internationally.
An explicit de minimis rule and an explicit public interest defence would be the minimum required to bring
Article 23 into line with the European Convention on Human Rights (ECHR) and the EU Charter.
1 Opinion of the European Data Protection Supervisor on the current negotiations by the European Union of an Anti-Counterfeiting Trade Agreement, paragraph 44
3 Position of the European Parliament adopted at first reading on 25 April 2007 with a view to the adoption of Directive 2007/…/EC of the European Parliament and of the Council on criminal measures aimed at ensuring the enforcement of intellectual property rights
ACTA – Innovation and Competition
The logic behind intellectual property protection is to create temporary monopolies on the use of inventions
and creations in order to develop an incentive to innovate. By expanding the protection of these monopolies
and reducing flexibility, ACTA builds barriers to innovation and competition, thereby undermining its goals.
Chilling effect on innovation back
In a knowledge society, exceptions and limitations on copyright create important opportunities for new
companies, such as search engines, online video services, digital libraries, etc. In the EU, these exceptions
and limitations are not harmonised. 27 Member States must choose to apply some, none or all of the 21
optional exceptions or limitations to the right of reproduction provided for in EU legislation (Directive
2001/29/EC). Innovators can only guess at what is likely to be accepted by the courts in each of the 27 Member States. Because of the complexity of copyright legislation in general and the particular complexity of the patchwork of EU copyright laws, innovative businesses are often forced to operate in a legal “grey zone”.
Innovators therefore risk accidentally breaching civil law if they misunderstand the complex current
arrangements. Under ACTA, innovators, start-up companies and digitisation projects risk criminal charges
and almost unlimited “damages” payments based not on actual losses to the rightsholder but on the retail
price of each potential accidental infringement. This goes far beyond current EU law on damages, which,
logically and proportionately, is based on actual loss suffered. The companies and projects may also face
ACTA’s injunctions which go beyond current EU law injunctions.
The undefined “commercial scale” limitation in ACTA is of little practical value as the proposed text goes
beyond the simple commercial scale to cover undefined “indirect economic advantage” and further still to
undefined “aiding and abetting” – which can only serve to push Internet providers to pre-emptively censor
services which they fear might be infringing, in order to avoid possible criminal prosecution.
The European Parliament1 called on the Commission to harmonise copyright law and for a removal of the
obstacles to a single online market. It was ignored. The Parliament asked the Commission to ensure that the
provisions of ACTA fully comply with the acquis. It was ignored. If ACTA is adopted, the EU is effectively
prohibiting itself from amending key pieces of legislation, such as the IPR Enforcement Directive –
abandoning flexibility and democracy and replacing them with an inflexible international agreement.
Anti-competitive consequences back
ACTA will have anti-competitive effects stretching beyond the markets it seeks to regulate. It will create an
environment where large competitors will have major advantages over smaller firms and start-ups. For
example, Internet intermediaries, to avoid the new risks of being found guilty of indirect infringement created
by ACTA, will be pushed into investing in more extensive monitoring/filtering technologies. Economies of
scale mean that these will be cheaper for larger intermediaries than start-ups.
This monitoring/filtering technology can be re-used by intermediaries to discriminate between online services
– discrimination that they are already lobbying in favour of on an EU and international level. These
disadvantages will not be suffered by Europe’s trading partners that have chosen to avoid restrictive and
counterproductive international obligations.
Competitive advantage for the USA back
The USA starts from a stronger position than the EU. It has a single market with an innovation-friendly “fair
use” regime for the use of copyrighted works. The EU has a fragmented “exceptions and limitations regime”.
The USA has said that it will not consider itself to be legally bound by ACTA  while the EU will be legally
bound. The significant innovation gap between the EU and the USA and Japan, highlighted by the European
Parliament Study for the INTA Committee, would therefore be reinforced and made permanent by ACTA.
4 DG Expo Study for the INTA Committee quotes the European Innovation Scorecard, published by PRO INNO Europe p. 39
The impact of the ACTA on the EU’s international relations
Negotiations for the Anti-Counterfeiting Trade Agreement (ACTA) started off with the intention to set
a “gold” standard for the enforcement of intellectual property rights. The initial intention was to
create a “coalition of the willing” to address important countries, such as India, China or Brazil, that
take a different approach from that of the EU. However, the secrecy and exclusionary nature of the
negotiations, as well as the rejection of agreed multilateral forums have served to alienate exactly
those countries that were the ultimate target of ACTA.
Concerns expressed by developing countries back
As far back as 2009, India publicly attacked ACTA saying that it “was being negotiated in secrecy and with
the exclusion of a vast majority of countries, including developing countries and LDCs” [less developed
countries]. In 2010, India held talks with like-minded countries, such as Brazil, China and Egypt, to jointly
oppose ACTA. Then, on 25 October 2011, at the WTO TRIPS Council, India raised concerns on the scope
of ACTA’s civil enforcement measures, the potential role of border measures in the seizure of generic
medicines, third party liability, and potential damage to WTO Most Favoured Nation status for countries that
are not parties to ACTA.
European Parliament Study points out exclusive nature of ACTA back
The best approach to gaining broader acceptance would have been to include those countries in the
negotiations, “not leave them on the outside in the hope of later pressuring them to comply with an
agreement from which they were deliberately excluded.”  The European Parliament study on ACTA confirms
that “the major emerging economies, China, Brazil and India appear not to have been formally invited to
In October 2010, the Mexican Senate demanded a suspension of negotiations.6 In June 2011, the Mexican
Congress approved unanimously a resolution rejecting ACTA.
Ignoring the EU’s obligation to support the rule of law back
If the EU ratifies ACTA, it would ignore its obligation to support the rule of law in its international relations.
The EU is protected by safeguards in the field of fundamental rights such as the EU Charter and the
European Convention on Human Rights. The preamble of ACTA, as well as the “Digital Chapter” specifically
promotes policing and enforcement through “cooperation” between private companies. This is an obvious
violation of Article 21 of the TEU which re-states the EU’s obligation to support democracy and the rule of law
in its international relations.
Not only were multilateral forums bypassed by ACTA, their norms have been partly rewritten. The European
Parliament study points out “the apparent re-interpretation of the meaning of the term ‘commercial scale’ as interpreted by the recent China IPRs WTO case “. In contrast to that ruling, the logically open-ended norm of
‘indirect economic or commercial advantage’ (also covering indirect infringements) in ACTA focuses on the
intent of the alleged infringer, rather than on assessment of the adverse effects on the market 9. ACTA’s
approach therefore is both extremely unclear and in contradiction with agreed international norms.
In other words, the EU finds itself further away from its destination than it was when the ACTA
process started – which is the definition of being on the wrong track.
1 Minutes of Meeting Held In The Centre William Rappard on 27-28 October and 6 November 2009
Council on Trade-related Aspects of Intellectual Property, IP/C/M/61, 12 February 2010, para. 264.
2 India Times, India plans to nip new piracy law, 29 May 2010 http://articles.economictimes.indiatimes.com/2010-05-
3 Knowledge Ecology International, WTO TRIPS Council: India raises concerns http://keionline.org/node/1300
4 Prof. Michael Geist, India Seeking Allies to Oppose ACTA http://www.michaelgeist.ca/content/view/5076/125/
5 DG Expo Study, The Anti-Counterfeiting Trade Agreement (ACTA): An Assessment, June 2011, p.6.
6 Resolution adopted by the Mexican Senate, 5 October 2010 http://www.senado.gob.mx/index.php?ver=sp&mn=2&sm=2&id=5385&lg=61
7 European Parliament, DG for External Policies of the Union, Directorate B, Policy Department,
EXPO/B/INTA/FWC/2009-01/Lot7/12, PE 433.859, June 2011 (PE 410.207)
8 China – Measures Affecting the Protection and Enforcement of Intellectual Property Rights (China – IPRs), WT/DS362/R, 09/0240, 26/01/2009
9 DG EXPO study, Section 4.1.2
ACTA and its “safeguards”
In any national or international legal document which touches on fundamental rights, such as the freedom of
communication and the right to privacy, it is clearly crucial to build in robust safeguards. This is essential to
ensure balance and proportionality. ACTA contains far-reaching demands on injunctions, access to personal
information, criminalisation and policing of communications by private companies. Are its safeguards robust
enough to ensure balance, both in the EU and – in order to respect the EU’s treaty obligations to advance
fundamental rights in international relations – in third countries?
Criminal sanctions restricted to “commercial scale” infringements back
ACTA refers to “commercial activities” but fails to define them. It then broadens its scope to activities
undertaken for “direct or indirect” economic advantage. As any infringement of any intellectual property right
involves an indirect economic advantage, this broadening of the scope appears to render the restriction
meaningless. The scope is then further extended to “aiding and abetting” which would apply to third parties,
such as Internet intermediaries. Would failure to incur the cost of imposing widespread surveillance of
networks be considered an indirect economic advantage? Would failure to disconnect a paying customer,
who is accused (but not convicted) of infringements be considered “aiding and abetting” the alleged
infringement? This would clearly be grossly disproportionate but possible, despite the “safeguards”.
Disclosure of information back
Article 4.1 of ACTA is written wholly as a safeguard clause. However, it only relies on whatever privacy
legislation that may have already existed in the countries that sign up to the Agreement. ACTA’s provisions
include disclosure of personal information and processing of personal data within the context of enforcement
and cooperation in the private sector. Parties to ACTA have no obligation whatsoever to protect privacy as a
result of this “safeguard”. The only protection provided is that ACTA does not oblige (but does not prohibit)
parties to contradict their existing privacy legislation.
Digital chapter and support for “fundamental principles” back
The digital chapter (Articles 27.2, 27.3 and 27.4) refers to the need to preserve “fundamental principles such
as freedom of expression, fair process, and privacy”. In the absence of any clarity about what “fundamental
principles” might mean (the drafters chose not to refer to “fundamental rights”), this appears to be entirely
unenforceable and, as a result, meaningless.
Worse still, the negotiators chose to avoid referring to either the right to a “fair trial” or the right to “due
process” and referred to a “fundamental principle” of international law: “fair process”. Fair process, as
confirmed by the European Commission in response to Parliamentary question (E-8444/2011) is not a
principle, let alone a “fundamental principle” of international law at all. This legal fiction is repeated no fewer
than three times in Article 27 of ACTA.
Imbalance of rights back
The basically meaningless “safeguard” in Article 27 is further undermined by the associated footnote. It
explains that Internet intermediary liability protections – which are a core element of an open Internet and are
central to its success – are only permissible if the interests of rightsholders are first taken into account. A
situation where one narrow business interest (IPR) is given the same importance as both the interests of
another business interest (Internet providers) and the whole of society, is in direct contradiction to the case-
law of the European Court of Justice in the Telefonica/Promusicae (C275/06) and, in particular, the
Scarlet/Sabam (C70/10). The latter explained that one set of rights (as in ACTA) may not be given
precedence over another, but that a “fair balance be struck between the right to intellectual property, on the
one hand, and the freedom to conduct business, the right to protection of personal data and the freedom to
receive or impart information, on the other.” Footnote 13 of ACTA gives the interests of rightsholders clear
precedence and is, consequently, in contradiction with EU law.
The “safeguards” in ACTA are meaningless.