Under Irish legislation, internet intermediaries are in a vulnerable position. This makes them less likely to set up operations here, writes KARLIN LILLINGTON

UNLESS CHANGES are made to Ireland’s legal and regulatory framework in areas like copyright and defamation, digital businesses will be discouraged from locating operations here, say legal experts and businesses.

Google Ireland chief John Herlihy told a seminar hosted at the company’s Dublin headquarters last Friday that he thinks there will be “a tremendous opportunity for content creation” in Ireland but that “we need to look at the rules of law in place, and how might we rethink them”.

According to TJ McIntyre, lecturer in law at University College Dublin and chairman of Digital Rights Ireland, “We have a very substantial problem in which are exposed unnecessarily and this will prevent businesses from setting up in Ireland.”

He said a company like TripAdvisor.com, which hosts reviews by users on hotels and attractions, could not set up in Ireland because the role of “intermediaries” – companies that host discussions or reviews, or provide hosting services or internet connections – is vulnerable under Irish law.

He said that where once Ireland provided a model for European law in the digital sector with its own groundbreaking electronic commerce legislation, which was “very much ahead of its time and put us in the vanguard of changing law in the EU”, Ireland now tended to follow where Brussels leads, implementing directives with little alteration.

He said that, after 2000, the focus of Irish lawmakers shifted to e-government rather than business and e-commerce, with the result that clumsy legislation such as the EU’s own e-commerce directive, where “intermediaries are in a very weak position”, were directly transposed into Irish law.

The legislation as it now stands gives no detail on how existing protections should apply, and offers no additional protections for new services that emerge in this fast-moving area of business and technology.

Search engines, content aggregators and hyperlinks all fall outside the legislation’s protections, said McIntyre.

Discussion sites like Boards.ie, where thousands of members post links, images and often strong opinions, are constantly under pressure from Irish defamation and copyright laws, said Boards.ie communications manager Darragh Doyle.

McIntyre said that due to uncertainties in Irish law, intermediaries such as discussion board operators “have to err on the side of caution” but noted that Irish law “also leaves intermediaries unclear on what they should do”.

Irish law gives grounds for taking action against intermediaries who fail to remove offending material they know has been posted. In practice, this means that those who are well-intentioned and try to moderate site content are more liable than those who leave their sites an unsupervised free-for-all, he said.

Defamation law in Ireland is too “print-centric”, he said, leaving online intermediaries in a grey area of applicability.

These ambiguous and often more punishing legal frameworks will chase away intermediary services from Ireland, McIntyre said, even though they are often at the leading edge of emerging internet business sectors and employment growth.

Companies like TripAdvisor “are businesses that I think couldn’t establish in Ireland without being exposed to crippling defamation orders”, he said.

Niall O’Riordan, Google’s head of public policy and government affairs and its senior legal counsel in Europe, told the seminar: “If we want to be a digital hub, we really need to consider whether our laws are fit for purpose.”

Copyright law needs to be flexible enough so that it doesn’t need to be reformed each time a new technology or online service becomes popular, he said.

He noted that “no policymaker, however brilliant, could have predicted” the quick development of services like microblogging site Twitter, video site YouTube and photo hosting service Flickr.

While Google, which owns YouTube, has come under fire for enabling copyright violations via users who post copyrighted video material or add copyrighted songs to their home-made videos, O’Riordan said Google was working to help create new markets and opportunities for copyright holders as well.

He pointed to a Chris Brown song used in a wedding video that went “viral” on YouTube with more than 60 million views. Google now enables the music publisher to add a button under such a video to purchase the song immediately. The Brown song, released over a year ago, rose to number four in the charts on Apple’s iTunes music store.

“Digital innovation doesn’t have to be something that is threatening to rights holders,” he argued. “There are win:win situations and opportunities to expand the pie.”

He said the American concept of “fair use” – allowing a small part of a work to be re-used in a new work – “is an idea whose time has come”. Israel brought in the same concept in 2008, he said, and was actively encouraging the development of all types of internet-based business.

If European law in the area doesn’t evolve, foreign direct investment could be discouraged, he said.

“We are so exposed to that sector, we would suffer disproportionally if we get punched. But there’s no reason we shouldn’t set best practice here.”

Johnny Ryan, author of A History of the Internet and the Digital Futureand senior researcher at the Institute for Irish and European Affairs, said that, with the internet, "we are dealing with a market that is so huge that nothing is beyond commoditisation".

“Do we have the legal situation to allow people to do this? No.”

McIntyre said change in Irish laws and regulations was needed “if we are to encourage these businesses to set up in Ireland”.

“The risk is that other jurisdictions are leaving us behind. They’re creating more internet-business friendly jurisdictions.”