Human Rights Regulation in the Tech Sector? The European Court of Justice’s Facebook Decision and California’s AB5 Gig Economy Bill

BigTech may well be the new BigPharma where local, national, or regional human rights-based litigation and human rights-based regulation is concerned.  While the recent exchanges between US presidential candidate Senator Elizabeth Warren and Facebook’s Mark Zuckerberg signal a looming antitrust showdown, recent regional judicial and local legislative developments concretely demonstrate the human rights-based trajectory of future tech regulation.  Both the 3 October 2019 Judgment of the European Court of Justice in Eva Glawischnig-Piesczek v. Facebook Ireland Limited (hereafter, ‘ECJ Facebook Judgment’, see reported summaries of this Judgment here, here, here, and here),and the recent passage of California’s new law (based on Assembly Bill 5 and taking effect in January 2020) – which limits the use of independent contractors on which the business models of the “gig economy” are based – significantly demonstrate that the freewheeling, thinly-regulated, and largely-unrestrained era of “creative freedom” and “digital disruption” for tech companies and online platforms may well be over.  What is most interesting from these recent developments is that they are distinct legal paradigms now originating from courts and legislatures, whereas the explicit application of international human rights law to the specific issues and idiosyncracies of BigTech thus far has often remained more a matter postulated by interdisciplinary academics, legal scholars and civil society advocates.

In this post, I highlight key features both from the ECJ judgment and California’s new law, signaling three key strategies that possibly herald the future of international, regional, and/or local human rights-based regulation for BigTech.  First, both the ECJ judgment and California’s law explicitly shift burdens of proving legal exemptions to BigTech, suggestive of some sensitivity towards the asymmetries and inequalities of circumstances between human rights victims and BigTech.  Second, both the ECJ judgment and California’s law seek to widen the range of applicable legal entitlements and human rights-based protections, whether for workers in the gig economy under California law or for those seeking injunctive relief against the storage (and or risk of disclosure) of illegal content by Facebook anywhere in the world.  Finally, both the ECJ judgment and California’s law recognize possible spaces where international human rights law can evolve or become more explicit in its application to BigTech issues, and thus do not foreclose future deepening of human rights-based regulation with respect to BigTech.  

Shifting Burdens

The ECJ Facebook Judgment arose from a request for a preliminary ruling on the interpretation of Article 15(1) of Directive 2000/31/EC of the European Parliament and of the Council, by Ms. Glawischnig-Piesczek, an Austrian Parliamentarian who had asked Facebook to delete a comment that was ultimately found by Austrian courts to be defamatory against her reputation. The court of first instance (commercial court) in Vienna issued a cease and desist order against Facebook to prevent further dissemination and/or publication of the defamatory content. The Austrian Supreme Court (Oberster Gerichtshof) stated that, “in accordance with its own case-law, such an obligation must be considered to be proportionate where the host provider was already aware that the interests of the person concerned had been harmed on at least one occasion as a result of a user’s post and the risk that other infringements may be committed is thus demonstrated.” (ECJ Facebook Judgment, para. 19).  The Austrian Supreme Court stayed the proceedings to refer the question to the ECJ on the interpretation of EU Law, specifically asking the ECJ to determine if Article 15(1) of the Directive included removal not just of illegal or defamatory information as posted, but also other “identically worded items of information”: 1) worldwide; 2) in the relevant EU Member State; 3) of the relevant user worldwide; and 4) of the relevant user in the relevant circumstance.  Facebook had always argued its “safe harbor” contractual defence – voluntarily committing since 2000 to protect EU data stored in the US (later invalidated by the ECJ in the landmark Maximillian Schrems v. Data Protection Commissioner 2015 ruling), but this time Facebook denied liability under Article 14(1) of the Directive (which exempts the host provider from liability where it satisfies one of the two conditions listed in that provision, that is to say, not having knowledge of the illegal activity or information, or acting expeditiously to remove or to disable access to that information as soon as it becomes aware of it; cf. ECJ Facebook Judgment, para. 23). 

On the facts, the ECJ found that Facebook “did have knowledge of the illegal information at issue. Next, that company did not act expeditiously to remove or to disable access to that information, as laid down in Article 14(1) of Directive 2000/31.” (ECJ Facebook Judgment, para. 27).  This was the “specific case” which, in the view of the ECJ, took the matter out of the general prohibition under Article 15(1) of the Directive (forbidding Member States from imposing on host providers a general obligation to monitor information which they transmit or store, or a general obligation actively to seek facts or circumstances indicating illegal activity).  The ECJ took judicial notice of the genuine risk of subsequent reproduction of illegal or defamatory content and the relative positions of the victim of defamatory or illegal content and the host provider Facebook, and squarely placed the burden on Facebook to monitor and remove such specific and identifiable information, as described from a national court injunction that also contained its determination of the actual illegal or defamatory content:

“…[a national court] injunction specifically does not impose on the host provider an obligation to monitor generally the information which it stores, or a general obligation actively to seek facts or circumstances indicating illegal activity, as provided for in Article 15(1) of Directive 2000/31…such a prohibition does not concern the monitoring obligations ‘in a specific case’…Such a specific case may, in particular, be found, as in the main proceedings, in a particular piece of information stored by the host provider concerned at the request of a certain user of its social network, the content of which was examined and assessed by a court having jurisdiction in the Member State, which, following its assessment, declared it to be illegal…Given that a social network facilitates the swift flow of information stored by the host provider between its different users, there is a genuine risk that information which was held to be illegal is subsequently reproduced and shared by another user of that network.  

In those circumstances, in order to ensure that the host provider at issue prevents any further impairment of the interests involved, it is legitimate for the court having jurisdiction to be able to require that host provider to block access to the information stored, the content of which is identical to the content previously declared to be illegal, or to remove that information, irrespective of who requested the storage of that information.  In particular, in view of the identical content of the information concerned, the injunction granted for that purpose cannot be regarded as imposing on the host provider an obligation to monitor generally the information which it stores, or a general obligation actively to seek factors or circumstances indicating illegal activity…

…it should be made clear that the illegality of the content of information does not in itself stem from the use of certain terms combined in a certain way, but from the fact that the message conveyed by that content is held to be illegal, when, as in the present case, it concerns defamatory statements made against a specific person…It follows, therefore, that in order for an injunction which is intended to bring an end to an illegal act and to prevent it being repeated, in addition to any further impairment of the interests involved, to be capable of achieving those objectives effectively, that injunction must be able to extend to information, the content of which, whilst essentially conveying the same message, is worded slightly differently, because of the words used or their combination, compared with the information whose content was declared to be illegal.  Otherwise…the effects of such an injunction could easily be circumvented by the storing of messages which are scarcely different from those which were previously declared to be illegal, which could result in the person concerned having to initiate multiple proceedings in order to bring an end to the conduct of which he is a victim…

…in adopting [Directive 2000/31], the EU legislature wished to strike a balance between the different interests at stake…Article 15(1) of Directive 2000/31 implies that the objective of an injunction such as the one referred to in Article 18(1) of that directive…consisting, inter alia, of effectively protecting a person’s reputation and honour, may not be pursued by imposing an excessive obligation on the host provider…In light of the foregoing, it is important that the equivalent information referred to…contains specific elements which are properly identified in the injunction, such as the name of the person concerned by the infringement determined previously, the circumstances in which that infringement was determined and equivalent content to that which was declared to be illegal.  Differences in the wording of that equivalent content, compared with the content which was declared to be illegal, must not, in any event, be such as to require the host provider concerned to carry out an independent assessment of that content…the monitoring of and search for information which it requires are limited to information containing the elements specified in the injunction, and its defamatory content of an equivalent nature does not require the host provider to carry out an independent assessment, since the latter has recourse to automated search tools and technologies…

…[As regards the geographic applicability of the Directive]…Article 18(1) Directive 2000/31 does not make provision in that regard for any limitation, including a territorial limitation, on the scope of measures which Member States are entitled to adopt in accordance with that directive…Consequently…Directive 2000/31 does not preclude those injunction measures from producing effects worldwide.” (ECJ Facebook Judgment, paras. 34-50, emphasis and italics added.)

In similar vein, California’s recently passed Assembly Bill No. 5 also shifts the burden of seeking legal exemption from labor benefits coverage to employers by specifically legislating what had been thus far a jurisprudentially created presumption (Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903 (Dynamex), creates a presumption that a worker who performs services for a hirer is an employee for purposes of claims for wages and benefits arising under wage orders issued by the Industrial Welfare Commission, leaving to the employer to satisfy a 3-part test to show that the employee is an independent contractor and not an employee).  This shift in burdens is highly significant for ‘gig economy’ or ‘sharing economy’ workers, which had, up to this point, been forced to litigate to dispute allegations of tech companies (most famously by Uber) that they were not employees but merely independent contractors.

The shift in burdens significantly tips the field somewhat for individual human rights claimants, who often have to navigate not just the many jurisdictional objections that could be raised by BigTech before national or regional courts (e.g. on territoriality, lex loci contractus, effects, or other ‘locus of jurisdiction’ grounds), but even more the heavier burden of proving their entitlement to protections (e.g. privacy and reputational rights, as shown in the ECJ Facebook Judgment; or labor rights as in the case of California’s Assembly Bill No. 5), and usually without recourse to the powerhouse litigation resources and counsels that BigTech could afford.  It will be interesting to see if other regional or national courts and legislatures follow suit, recognizing the relative disparities in positions between human rights victims and BigTech.

Widening Applicable Law 

The ECJ Facebook Judgment significantly pointed out that, given EU rules in the “global dimension of electronic commerce” (para. 51), any measures that EU Member States would adopt in regard to host providers pursuant to the Directive “and which produce effects worldwide [such as national court injunctions] [should] take due account of such [international] rules.” (para. 52).  Thus, while a national court of an EU Member State could order a host provider such as Facebook to “remove information covered by the injunction or to block access to that information worldwide”, it must do so “within the framework of the relevant international law”.  (para. 53)  The ECJ did not specify what relevant international law applies in this case – whether it be international human rights law, international economic law, international competition law, among others.  This opening could thus widen the applicable laws to these types of disputes, whether as pleaded by human rights victim claimants or BigTech companies.

Similarly, California’s AB No. 5 legislated a broad 3-part test for employers (hiring entities) to satisfy before they could establish that a person is an independent contractor and not an employee:

“(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
(B) The person performs work that is outside the usual course of the hiring entity’s business.
(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
(2) Notwithstanding paragraph (1), any exceptions to the terms “employee,” “employer,” “employ,” or “independent contractor,” and any extensions of employer status or liability, that are expressly made by a provision of this code, the Unemployment Insurance Code, or in an applicable order of the Industrial Welfare Commission, including, but not limited to, the definition of “employee” in subdivision 2(E) of Wage Order No. 2, shall remain in effect for the purposes set forth therein.
(3) If a court of law rules that the three-part test in paragraph (1) cannot be applied to a particular context based on grounds other than an express exception to employment status as provided under paragraph (2), then the determination of employee or independent contractor status in that context shall instead be governed by the California Supreme Court’s decision in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 (Borello).” (Emphasis added.)

The Borello decision further introduces other cumulative factors to verify the existence of an independent contractor, such as 1) the right to control the work; 2) the alleged employee’s opportunity for profit or loss depending on his managerial skill; 3) the alleged employee’s investment in equipment or materials required for his task, or his employment of helpers; 4) whether the service rendered requires a special skill; 5) the degree of permanence of the working relationship; and 6) whether the service rendered is an integral part of the alleged employer’s business. These factors widen the possible laws that may be applied (e.g. labor and employment laws, contract laws, trade and industry laws, regulations, and commercial/technical usages among others) to intensively verify any employer’s assertion that a person is an independent contractor for purposes of denying workers’ compensation and other benefits.  Where such contracts, laws, regulations, and usages purposely incorporate international human rights norms, the latter could potentially inform the application of verification tests to determine independent contractorships.

Elaborating the Future of International Human Rights Law

Both the ECJ Facebook Judgment and California’s recently passed AB No. 5 indicate regional and local developments that could help inform future formal elaborations of digital rights and labor protections under existing international human rights treaties.  Thus far, there is no benchmark General Comment by any of the human rights treaty bodies that deliberately focuses on the idiosyncratic challenges of human rights protection in the digital and gig economies (see current attempts to draft a general comment on children’s rights in the digital era by the CRC here), although there are some early publications from the UN Office of the High Commissioner for Human Rights (see here); a UN General Assembly resolution that focuses on challenges to privacy in light of mass surveillance in the digital economy; a recent Digital Cooperation Report (“The Age of Digital Interdependence“) of the UN Secretary-General’s High-Level Panel on Digital Cooperation, among others.  The ECJ Facebook Judgment and California’s AB No. 5 are distinct judicial and legislative examples in regional and local jurisdictions that may thus also herald future elaborations in the application of international human rights law to the digital era.