German ISP doesn't have to block foreign 'illegal' betting sites

Court: Deutsche Telekom not on the hook for site's content

By OUT-LAW.COM, 18th January 2012

A German internet service provider (ISP) does not have to block its customers from accessing foreign betting websites even if they are considered illegal in the country, according to reports.

The Administrative Court of Düsseldorf ruled that Deutsche Telekom did not have to block access to the sites, according to a translation from a report by German news website Spiegel Online. The district government in Düsseldorf had requested the ISP block access to the sites because they were illegal under German law, but the court said the ISP did not have to act because it was not responsible for the content of the sites, the report said.

The EU's E-Commerce Directive protects service providers from liability for material that they neither create nor monitor but simply store or pass on to users of their service. The Directive says that service providers are generally not responsible for the activity of customers and that member states must not put service providers under any obligation to police illegal activity on their services.

The ruling followed a similar judgment by the same court last year in a case involving Vodafone, the Spiegel Online report said. German law places tight restrictions on sports betting and requires the activity to be carried out through certain state-controlled companies, according to a report by technology news service The Next Web.

Under EU law member states are permitted to restrict gambling activities for reasons of public policy and to stop money laundering or criminal activity. However, the European Court of Justice (ECJ) has previously ruled on the lawfulness of those restrictions and how they balance with the fundamental rights to free trade in the trading bloc.

In 2010 the ECJ ruled that Sweden could ban internet gambling as long as its penalties for foreign operators were no stricter than those for Swedish operators. Sweden allows gambling activity, but only that which is licensed by the state and has as its main purpose socially beneficial activities.

The Swedish courts asked the ECJ if Sweden could ban foreign gambling companies and unlicensed Swedish companies from operating there or whether that would break EU laws on cross border trade. The ECJ said that Sweden is permitted to bar foreign gambling companies from operating without a licence there, but only if the same rules and penalties apply to domestic unlicensed operators.

In France a court in the country ordered ISPs to block access to a betting website that operated out of Gibraltar. The operators did not have a licence to offer bets to French customers.

France made changes to its gambling laws in 2010 after the European Commission had launched an investigation into licensing restrictions the country placed on foreign operators. The Commission said the restrictions were "disproportionate" but dropped its case after France "introduced a national licensing system that allows for the cross border provision of sports betting on a non-discriminatory basis".