X Internet UnLtd Company v Coimisiun Na Mean (Approved)

Factual and Procedural Background

This judicial review challenge was brought by the Applicant, Company A, against a decision of The Commission, the State's national regulatory authority established under the Online Safety and Media Regulation Act 2022, to adopt certain provisions of an Online Safety Code ("the Code"). The impugned decision was made on 10th October 2024 and published on 21st October 2024. The Code applies to video-sharing platform services, including those provided by Company A, and aims to regulate harmful content online in accordance with the Audiovisual Media Services Directive ("AVMSD") and the Digital Services Act ("DSA").

The procedural history includes verified affidavits from employees of Company A and The Commission, and a statutory consultation process that informed the drafting and adoption of the Code. The challenge focuses on the legal interpretation of the powers (vires) of The Commission to make and adopt the Code under the AVMSD and the DSA, specifically contesting certain provisions in Part B of the Code concerning terms and conditions and content restrictions.

Legal Issues Presented

1. Whether the provisions of the Code, particularly sections 12.1, 12.6 to 12.9 and 13.6 to 13.9, impermissibly exceed the requirements of Article 28b of the AVMSD by introducing content control measures rather than access control measures.
2. Whether the Code unlawfully conflicts with the Digital Services Act, which is a regulation of full harmonisation, thereby precluding national measures in the same field.
3. Whether The Commission exceeded its statutory powers under the Broadcasting Act 2009 as amended by the Online Safety and Media Regulation Act 2022 in adopting the challenged provisions of the Code.

Arguments of the Parties

Appellant's Arguments

• The Code goes beyond what Article 28b of the AVMSD requires by imposing outright prohibitions (content control) rather than access control measures to protect minors from harmful content.
• The Code applies the same content control measures to adults as to minors, which is inconsistent with the AVMSD's focus on minors in Article 28b(1)(a).
• The definition of restricted content in the Code is overly broad and may prohibit legal content on the basis of harm, exceeding AVMSD requirements.
• The Code introduces enforcement mechanisms such as suspension of accounts, which are not mandated by the AVMSD.
• The Digital Services Act (DSA) provides a fully harmonised regulatory framework that precludes national or member state measures in overlapping areas, rendering the Code ultra vires and conflicting with EU law.

Respondent's Arguments

• The Code faithfully transposes the AVMSD’s requirements, including appropriate measures in the terms and conditions of video-sharing platform services to protect minors and the general public.
• The AVMSD and the DSA are complementary legal instruments; the DSA expressly provides that it is without prejudice to other Union legal acts such as the AVMSD, which specify and complement the DSA.
• The challenged provisions of the Code do not conflict with Article 14 of the DSA, which regulates transparency obligations related to terms and conditions rather than the substantive content of those terms.
• The consultation process was extensive, evidence-based, and engaged all stakeholders, including Company A, supporting the reasonableness and legality of the Code.
• The Code’s provisions on suspension and enforcement are consistent with the AVMSD and do not impose general monitoring obligations prohibited by Article 8 of the DSA.
• The principle of lex specialis applies, with the AVMSD being the more specific instrument governing video-sharing platforms, thus taking precedence over the DSA in this context.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court undertook a detailed statutory and EU law interpretation exercise, focusing on the relationship between the AVMSD and the DSA. It acknowledged the settled principles that EU law must be interpreted by reference to the wording, context, objectives, and legislative history of the provisions. The Court recognized that the AVMSD, as a directive, imposes obligations on Member States to ensure video-sharing platform providers take appropriate measures to protect minors and the general public from harmful audiovisual content.

The Court found that the DSA and the AVMSD are complementary instruments. Article 2(4) of the DSA explicitly preserves the application of other Union legal acts regulating intermediary services, including the AVMSD, which is lex specialis in this context. The Court rejected the argument that the DSA's full harmonisation precludes Member States from adopting measures under the AVMSD, emphasizing the bifurcated approach in Article 2(4) and Recital (10) of the DSA, which allows for complementary regulation.

The Court analyzed the specific provisions of the Code challenged by Company A, particularly sections 12.1, 12.6 to 12.9, and 13.6 to 13.9, which impose restrictions in terms and conditions and provide for suspension of accounts upon infringement. It found that these provisions implement the AVMSD's requirements appropriately, including the application of a risk test and due regard to fundamental rights such as freedom of expression.

The Court noted that the Code’s provisions do not impose general monitoring obligations prohibited by Article 8 of the DSA. It also found no conflict with Article 14 of the DSA, which regulates transparency and communication of terms and conditions rather than the substantive content or enforcement mechanisms.

The Court emphasized that the Code was adopted following an extensive, evidence-based consultation process involving all stakeholders, including Company A, and that the measures chosen are within the Commission's powers and consistent with the objectives of the AVMSD and the DSA.

Accordingly, the Court concluded that the challenged provisions of the Code are neither ultra vires nor in conflict with EU law.

Holding and Implications

The Court REFUSED the reliefs sought by Company A in this judicial review challenge.

The decision upholds the validity of the challenged provisions of the Online Safety Code adopted by The Commission under the AVMSD and the Broadcasting Act 2009 as amended. It confirms the complementary relationship between the AVMSD and the DSA, affirming that national measures under the AVMSD can coexist with the DSA's harmonised framework. No new precedent altering the interpretation of these EU instruments was established; rather, the judgment clarifies the interplay and scope of the relevant legislative provisions. The Commission is entitled to recover costs as per the usual statutory rules, subject to any further submissions by the parties.