Italian Gambling Case Tests Google’s YouTube Liability Shield

Europe’s top court has said Google may lose its hosting liability protection when its review of a creator’s channel for a commercial partnership gives it specific knowledge of the content.

The case originated from an enforcement proceeding taken by the Italian communications regulatory authority, AGCOM. On July 19, 2022, AGCOM fined Google Ireland €750,000 and ordered it to remove several YouTube videos that promoted online gambling in breach of Italian law.

Partnership Review Changes the Liability Test

These videos were produced by an individual who had a business arrangement with Google. That deal included a share of advertising revenue generated before the videos. Before entering the partnership, Google had also analyzed the overall theme of the channel, the most recent popular video uploads, and the related metadata.

The Court of Justice of the European Union stated that these steps could push Google into the realm of not being a neutral hosting provider. A platform cannot claim a general liability exemption if its actions give it specific knowledge about the content that is being distributed.

Hosting Rules Still Cover Gambling Content

The judgment also rejected AGCOM’s argument that the hosting exemption could not apply because gambling activities are excluded from EU electronic commerce harmonization. The court made a distinction between gambling services and neutral hosting on the Internet.

Hosting user-provided gambling advertising is not automatically excluded from EU electronic commerce rules because neutral hosting is not intrinsically linked to gambling. Google may therefore rely on the hosting liability exemption in principle. However, the company’s activity must be technical, passive, and automated, and there must be no control or knowledge of the stored data.

Commercial examination of the creator’s channel may fail this requirement. Moreover, automated distribution does not mean a lack of control if the platform has established certain conditions of content ranking and distribution.

Italy Will Decide the Fine

The fine of €750,000 was not confirmed directly by the CJEU. Italy’s Council of State referred questions to the CJEU for a preliminary ruling on the interpretation of EU law.

In particular, it needs to establish whether Google could have been unaware that the channel covered gambling and featured commercial videos. Google said it was reviewing the judgment.

Creator Deals Come Under Scrutiny

The ruling does not deprive all monetized channels of their liability shield. Its importance lies in the data gathered during creator onboarding. By analyzing the content and metadata of the channel, the platform may get specific information that weakens its passive-hosting defense. Italy’s Council of State must now decide whether Google crossed that threshold in this case.