In a significant ruling, the European Court of Justice has provided clarity on the application of Directive 2000/31/EC, a cornerstone of the European Union’s digital market regulation. This directive, central to the development of information society services, particularly concerns electronic commerce within the internal market. The judgment scrutinized the directive’s provisions, particularly Article 3(4) and (5), against the backdrop of a dispute involving tech giants Google Ireland, Meta Platforms Ireland, and Tik Tok Technology, all established in Ireland, and KommAustria, the Austrian communications regulatory authority. The core of the dispute revolved around the applicability of the Bundesgesetz über Maßnahmen zum Schutz der Nutzer auf Kommunikationsplattformen (Federal Law on measures for the protection of users of communications platforms), known as the KoPl-G, to these tech companies.

The Country of Origin principle is fundamental to the EU’s approach to regulating online platforms and services. It revolves around the idea that the primary regulatory rules and laws governing an online platform or service provider are determined by the EU member state in which they are legally established. This means that the platform must primarily comply with the legal framework of its member state of origin, rather than navigating a complex web of varying regulations in each member state where it operates. In simpler terms, if an online platform or service provider is legally based in one EU member state, it is primarily subject to the laws and regulations of that member state. This principle seeks to simplify and standardize the regulatory environment, aiming for a unified set of rules and responsibilities for online platforms across the EU’s internal market.

Directive 2000/31/EC, also known as the E-Commerce Directive, was enacted to bolster the internal market’s proper functioning by guaranteeing the free movement of information society services among Member States. A pivotal element of this directive is Article 3, which outlines the internal market principles. Specifically, Article 3(4) allows Member States to deviate from the freedom to provide information society services from another Member State under certain strict conditions. These conditions include the necessity of the measures for public policy, public health, public security, or the protection of consumers, and the proportionality of the measures to these objectives.

The European Court of Justice’s recent ruling brought clarity to the interpretation of Article 3(4) of Directive 2000/31/EC. The Court clarified that the measures envisaged under this provision must target a “given information society service” rather than a general category of services. This interpretation emphasizes the need for specificity and individualized consideration, rather than broad and abstract regulatory measures that apply indiscriminately to any provider within a general category of services.

The ruling underscores the directive’s intent to facilitate the proper functioning of the internal market through a clear regulatory framework. It reinforces the principle of control in the Member State of origin, ensuring that information society services are primarily regulated by the Member State where the service provider is established. This approach fosters mutual trust between Member States, underpinning the directive’s objective of ensuring the free movement of services while also respecting the principles of subsidiarity and proportionality.

This ruling has far-reaching implications for the regulation of information society services within the EU. It mandates a nuanced approach, where regulatory measures must be specific and directly linked to the individual service in question. This decision reinforces the internal market’s coherence, ensuring that service providers operate under a predictable and stable legal framework that respects the principles enshrined in Directive 2000/31/EC.

As the digital landscape continues to evolve, this judgment provides a cornerstone for future interpretations and applications of the E-Commerce Directive. It ensures that while Member States can take necessary measures to protect public interests, these measures should not unduly hinder the free flow of information society services, a fundamental tenet of the internal market.

János Tamás Papp, PhD is an assistant professor at Pázmány Péter Catholic University, Hungary and a research expert at the National Media and Infocommunications Authority of Hungary. He earned his JD and PhD in Law at the Faculty of Law and Political Sciences of the Pázmány Péter Catholic University where he has taught civil and constitutional law since 2015 and became a founding member of the Media Law Research Group of the Department of Private Law. His main research fields are freedom of speech, media law, and issues related to freedom of expression on online platforms. He has a number of publications regarding social media and the law, including a book titled „Regulation of Social Media Platforms in Protection of Democratic Discourses”.