A new German law that defines Internet service providers' liability for illegal material found on their systems has been called both "liberal" and "vague" by legal and industry observers.
The so-called German Multimedia Law, approved Friday, states that ISPs will be held accountable for illegal material they publish as well as content posted on their services by customers.
But ISPs and online services won't be held liable for pornography or hate speech posted by third parties unless "they have knowledge of such content and blocking its use is both technically possible and can be reasonably expected."
Approved by the country's upper house of parliament, the regulation also states that service providers are not responsible for images downloaded by customers while they surf the Net. Still, Net access businesses based in Germany are wary of the new regulation, which gained quick passage after being introduced in late December.
Moreover, the legislation raises difficult questions for service providers based in the United States and other countries that do not enforce similar laws. The German law, as now cast, stand in apparent conflict with the recent U.S. Supreme Court rejection of the Communications Decency Act, as well as the White House's policy on electronic commerce, which advocates little government regulation of the Internet.
"There are a lot of provisions that sound good in theory. But the law tries to set technical and other standards that won't hold as the Internet evolves, which is happening rapidly," said Christopher Kuner, a Frankfurt attorney who represents America Online and Netscape Communications.
Resentment has lingered among U.S. online services with foreign divisions since the indictment of a CompuServe executive in February. The managing director of the second-largest online service's German subsidiary, Felix Somm, was held personally responsible for the distribution of child pornography over the service.
U.S. groups who protested Somm's arrest argued that online services are like telephone companies, simply providing a connection to the Net. The new law may be better than the system that led to Somm's arrest, some argue.
"It was clearly done to liberalize the controls on Internet content in Germany. There is some suggestion of content liability, but it's a really a light touch," said Marc Rotenberg, director of the Electronic Privacy Information Center, which fought the CDA.
The German law also enacts new online privacy provisions. For example, it says consumers should be able to conduct transactions anonymously.
"The service provider shall make it possible for the user to use teleservices and to pay for them either anonymously or using a pseudonym, insofar as this is technically possible and can be reasonably expected. The user shall be informed about this possibility," the law states.
Privacy advocates applauded the move as advantageous for consumers. So far, U.S. officials are relying on industry self-regulation, which often means consumers have to give up personal data to shop online or gain access to material in the Net.
Still, some in the online industry oppose the privacy provision. "To offer anonymity to users may not work for things like online banking," added Kuner.