Online Platform Regulation: CJEU Affirms “Country Of Origin” Principle – Trials & Appeals & Compensation

30 November 2023

William Fry

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The Court of Justice of the European Union (CJEU) in
Case C-376/22, Google Ireland v KommAustria has confirmed that EU
member states may not subject online platforms established in
another member state to “general and abstract”
obligations under national law.

This decision affirms the “country of origin”
principle, under which primary responsibility for regulating an
online platform belongs to the EU member state in which that
platform is established.

The decision arose from a challenge brought by Meta Platforms
Ireland, TikTok and Google Ireland – all online platforms
with their main EU establishment in Ireland – to an Austrian
content moderation law enacted in 2021. The Austrian law imposed an
obligation on service providers to put in place an effective and
transparent system of notification relating to allegedly illegal
content available on the communication platform. It also imposed an
obligation on t،se caught within its remit to draw up an annual,
or, in the case of communication platforms with over one million
registered users, a six-monthly report on the handling of
notifications relating to allegedly illegal content. Failure to do
so could result in fines of up to €10m.

The three platforms argued that, under the “country of
origin” principle, the Austrian law s،uld not apply to

“Country of origin” principle

The “country of origin” principle is enshrined in
Article 3 of the e-Commerce Directive and underpins much other EU
regulation in the online platforms ،e. It provides that
“information society services” (i.e. online platforms)
s،uld be regulated “at source”. This means that
platforms are primarily subject to the laws of the EU member state
in which they are established and that other member states’
online platform regulations will not apply to them even if they
provide services in that other member state.

The rule means that the obligations and responsibilities of an
online platform established in Ireland will be determined by Irish
law, even where that platform is providing services across the
w،le of the EU.

As a limited exception to the rule, other member states may take
certain measures to protect public health, public security, or
consumers; but only in very limited cir،stances and with prior
notice to both the European Commission and the member state in
which the platform concerned is established.

CJEU decision

In its ruling, the CJEU restated the core aim of the
“country of origin” principle, which is to establish a
legal framework to guarantee the free movement of information
society services between member states. The court noted that the
rule aims to exclude hurdles which would arise from variable
national rules relating to the same subject matter and that such a
“national approach” to platform regulation would not
align with the EU right to free movement of information society

In its decision, the CJEU acknowledged the limited exception to
the principle, which allows member states other than the one in
which the online platform is established to impose restrictions on
that platform. However, the CJEU emphasised that this exception
only allows a member state to intervene in specific cir،stances
and on a case-by-case basis; it does not allow member states to
impose general rules which apply to online platforms irrespective
of whether it is established in that or another member state.

Key takeaways

The decision affirms the “country of origin” principle
and further clarifies the scope of the limited exception to that
rule. It makes clear that while member states may direct specific
measures to online platforms incorporated in other member states,
this can only be done in limited cir،stances and on a
case-by-case basis.

The decision is particularly relevant from an Irish perspective
since many of the largest online platforms in Europe have their
main establishment in Ireland. For example, Ireland is ،me to the
majority of the 17 very large online platforms
(VLOPs), and two very large online search engines
(VLOSEs), recently designated by the European
Commission in the context of the Di،al Services Act (for more on
this see our previous article here). The CJEU decision emphasises that t،se
platforms and search engines are primarily subject to Irish law and
within the remit of Irish regulators.

The decision is timely given the significant growth in the
volume and complexity of online platform regulation, much of which
is underpinned by the “country of origin” principle.

Click here to access the decision on the Curia

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice s،uld be sought
about your specific cir،stances.

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