On 9 November 2023, the Court of Justice of the European Union (“CJEU”) has rendered a landmark decision which reiterates and reinforces the ‘country-of-origin principle’ and paves the way for more legal certainty for information society service providers in the European Union (KoPI-G, Case no. C‑376/22).

The ‘country-of-origin’ principle

The ‘country-of-origin’ principle is a cornerstone rule of the EU’s legal framework for online services. It is a central feature of both the Directive 2000/31/EC of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (“e-commerce Directive”) and the Directive 2010/13/EU on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services as amended by Directive 2018/1808 (“Audiovisual Media Services Directive”). This principle was left untouched by the EU’s Digital Services Act (Article 2(3) of the DSA).

The ‘country-of-origin’ principle essentially assigns regulatory competency to the Member State in which the information society service provider is established for matters falling within the coordinated field. Correlatively, other Member States “may not, for reasons falling within the coordinated field, restrict the freedom to provide information society services from another Member State”(Article 3(4) of the e-commerce Directive).

The inherent objective of the ‘country-of-origin’ principle is to ensure the free movement of services in the internal market by shielding online service providers from stricter requirements than those provided for under the law of the Member State where they are established.

Exception to the ‘country-of-origin’ principle

To take into account national societal and cultural specificities, Article 3(4) of the e-commerce Directive allows Member States to take measures that derogate from the ‘country-of-origin’ principle insofar as these measures are (i) necessary and proportionate to protect general interest objectives and (ii) targeted, i.e., taken against “a given” provider of digital services. In addition, Article 3(4)(b) of the e-commerce Directive lays out certain procedural requirements that must be met to derogate from the ‘country-of-origin’ principle.

In recent years, various national content moderation laws have been testing the boundaries of this exception to the ‘country-of-origin’ principle. For example, in only three years, France has adopted a law against the manipulation of information, a law to combat hateful content on the Internet and a law to ensure respect for the principles of the Republic. Finally, a very far-reaching digital safety bill is currently being discussed before the French Parliament. Germany has adopted a law to punish fake news and hateful content on social networks (Netzdurchsetzunggesetz – “NetzDG”) and Austria a law to protect users of digital forums and social media platforms from online hate speech (Kommunikationsplattformen-Gesetz – “KoPI-G”).

Landmark decision of the CJEU

In the context of the entry into force of KoPI-G in 2021, the Austrian Supreme Administrative Court has referred three questions to the CJEU with respect to the interpretation of the ‘country-of-origin’ principle. In answering these questions, the CJEU has interpreted the ‘country-of-origin’ principle in a way that clearly limits the way Member States can derogate from it.

The CJEU has unequivocally ruled that Member States cannot adopt, under Article 3(4) of the e-commerce Directive, general and abstract measures aimed at a category of information society services described in general terms and applying without distinction to any provider of that category of services.

In other words, according to the CJEU, the exception to the ‘country-of-origin’ principle under Article 3(4) of the e-commerce Directive does not allow to apply to service providers located in other States the abovementioned national content moderation laws enacted in the past few years.

The CJEU emphasizes that Member States when adopting such laws must therefore observe the ‘country-of-origin’ principle. The Court also reminds that their adoption is subject to the specific procedural requirements laid out under Directive 2015/1535¹.

The CJEU’s reasoning is a very welcome reminder of the importance of the ‘country-of-origin’ principle to ensure the free movement of services across Europe and the attractiveness of the EU internal market. The recent adoption of multiple and sometimes conflicting national laws has indeed created a significant level of legal uncertainty, despite the recent attempt to harmonise the EU’s legal framework for digital services with the adoption of the DSA.