Coimisiún na Meán: High Court dismisses designation challenges of Reddit and Tumblr

1. Regulatory Background

Coimisiún na Meán ("An Coimisiún") is the statutory body established under the Online Safety and Media Regulation Act 2022 (the "2022 Act"), which amends the Broadcasting Act 2009 (the "2009 Act"). The 2022 Act transposes the Revised EU Audio-Visual Media Services Directive ("Revised AVMS Directive") (Directive 2010/13/EU as amended by Directive (EU) 2018/1808) into Irish Law. The Revised AVMS Directive defines a "video-sharing platform service" ("VSPS") (at Article 1(aa)) as:

"…a service as defined by Articles 56 and 57 of the Treaty on the Functioning of the European Union, where the principal purpose of the service or of a dissociable section thereof or an essential functionality of the service is devoted to providing programmes, user-generated videos, or both, to the general public, for which the video-sharing platform provider does not have editorial responsibility, in order to inform, entertain or educate, by means of electronic communications networks within the meaning of point (a) of Article 2 of Directive 2002/21/EC and the organisation of which is determined by the video-sharing platform provider, including by automatic means or algorithms in particular by displaying, tagging and sequencing.”

In implementing the Revised AVMS Directive into Irish law, the 2009 Act provides a definition in Section 2(2) of "video-sharing platform service" which mirrors that contained in the Revised AVMS Directive. Section 139G(1) of the 2009 Act requires An Coimisiún to designate as a category of services under Section 139E "the video-sharing platform services the provider of which is under the jurisdiction of the State" while Section 139G(2) requires An Coimisiún to designate as a named service under s. 139E "any relevant online service that appears to the Commission to be a video-sharing platform service the provider of which is under the jurisdiction of the State".

2. Designation

Section 139E of the 2009 Act, as amended confers the power upon An Coimisiún to designate relevant online services as services to which Online Safety Codes may be applied.

On 16 January 2024, after consultation with the service providers pursuant to Section 139H of the 2009 Act, An Coimisiún published its statutory register of designated relevant online services to which Online Safety Codes can be applied. The ten VSPS designated are:

• Facebook – effective date: 22nd December 2023
• Instagram – effective date: 22nd December 2023
• YouTube – effective date: 22nd December 2023
• Udemy – effective date: 22nd December 2023
• TikTok – effective date: 22nd December 2023
• LinkedIn – effective date: 22nd December 2023
• X – effective date: 29th December 2023
• Pinterest – effective date: 29th December 2023
• Tumblr – effective date: 29th December 2023
• Reddit – effective date: 29th December 2023

Once the code becomes legally binding, likely later this year, all designated VSPS must comply or potentially face significant fines. Section 47 of the 2022 Act inserts Part 8B into the 2009 Act. Under this Part of the Act, An Coimisiún will have authorised officers at their disposal who will be appointed to investigate suspected non-compliance, which if proven, can result in financial sanctions of up to €20 million or 10% turnover of the non-complying party.

3. Challenge

An Coimisiún has faced two challenges to designation to date.

The first challenge came from Reddit Incorporated ("Reddit") which is described as a forum based social media platform. The second challenge followed shortly thereafter from Tumblr Incorporated ("Tumblr"), which is described as a microblogging platform that allows users to share content including video content.

Both platforms sought leave to bring judicial review proceedings against An Coimisiún seeking to quash its decision to designate the platforms. The High Court granted leave to both platforms to judicially review An Coimisiún's decisions and ruled that both cases should be heard separately due to the legal differences and the types of services provided both each platform.

Reddit's Challenge

Issues

A primary issue arises in these proceedings as to whether An Coimisiún erred in determining that Reddit Inc is "deemed to be established" in the state in assuming jurisdiction to regulate Reddit. A further issue pleased was that An Coimisiún erred by treating "non-native" videos (including hyperlinks and embedded links) as audio visual programmes or user generated videos within the meaning of the Revised AVMS Directive in determining that Reddit is required to be regulated as a VSPS. It is further contended that An Coimisiún failed to properly apply the EC Guidelines on the application of the "essential functionality" criterion and failed to identify how its application of the indicators led it to conclude that Reddit is a VSPS.

Statement of Grounds

Reddit filed an initial Statement of Grounds which was subsequently amended identifying the following distinct grounds of challenge:

1. An error of law in holding that Reddit, Inc, as a US corporate body, is not properly subject to the jurisdiction of the State on a proper interpretation and application of article 28a of the AVMS Directive.
2. An error of law in holding that an essential functionality of Reddit is devoted to providing audiovisual programmes and/or user generated videos by electronic communication networks to the general public in order to inform, entertain or educate specifically  insofar as An Coimisiún wrongly concluded that hyperlinks and/or embedded video links to audiovisual content that are hosted on a third-party service that are contained in the posts to Reddit constitute audiovisual programme and/or user-generated videos within the meaning of s. 2 of the 2009 Act;
3. An error of law in An Coimisiún's assessment of an essential functionality of Reddit by including embedded video and hyperlinks in its assessment of video content;
4. An error of law in the application of the EC Guidelines;
5. Errors of assessment in the treatment of quantitative and qualitative data, monetisation and revenue generation and tools aimed at enhancing the visibility or attractiveness of the audiovisual content.
6. An error of law in failing to determine what part of the content of Reddit constituted audio-visual programmes and/or user generated videos on the basis that said determination was a necessary component of the assessment of whether Reddit constitutes a VSPS.
7. It was also contended that An Coimisiún erred in its interpretation and application of articles 1(aa), 1(b), and 1(ba) of the Revised AVMS Directive and s.2(2) of the 2009 Act by treating not just "native video" but embedded or hyperlinked video as part of the video functionality of Reddit when determining whether an essential functionality of Reddit is devoted to video sharing such as to warrant its designation. It was further alleged that An Coimisiún erred in its assessment of quantitative and qualitative data aimed at enhancing the visibility or attractive of the audiovisual content.

Tumblr's Challenge

Issues

The issue at the heart of Tumblr's challenge was whether by reason of the scale or amount of video content shared, Tumblr was properly designated as a VSPS. Unlike Reddit's challenge, it was not disputed that Tumblr is subject to regulation in Ireland pursuant to the provisions of Article 28a of the Revised AVMS Directive as given effect to by s.2B of the 2009 Act if properly considered a VSPS.

It was Tumblr’s case that it is not properly subject to regulatory control as a VSPS because its video functionality is minor or merely ancillary to its activities. Tumblr contended that the decision of An Coimisiún to designate Tumblr as a VSPS based on an application of the "essential functionality" test prescribed under Article 1(aa) of the Revised AVMS Directive as implemented in Irish law by s.2(2)(c) of the 2009 Act (as amended) was vitiated by errors of law and fact and was invalid on various grounds, most specifically that proper regard has not been had to the quantitative data provided which shows low rates of video on Tumblr.

Statement of Grounds

Tumblr's Statement of Grounds identifies six broad grounds of challenge (the first five of which were pursued at hearing) as follows:

1. In making the Designation Decision, An Coimisiún misinterpreted and misapplied the definition of a VSPS contained in Article 1(1)(aa) of the Revised AVMS Directive and section 2(2) of the 2009 Act.
2. An Coimisiún failed to provide adequate reasons for the Designation Decision, in breach of the right to fair procedures and Article 41 of the Charter, such that Tumblr is unable to understand why it was designated a VSPS.
3. An Coimisiún failed to have any or any adequate regard to relevant considerations and placed undue weight on irrelevant considerations.
4. An Coimisiún failed to examine carefully and impartially all of the relevant aspects of the evidence before it relating to this case, as required by Article 41 of the Charter.
5. The Designation Decision is vitiated by manifest errors of assessment.
6. The Designation Decision is incompatible with the general principles of EU law.

4. Judgements

Ms Justice Siobhán Phelan delivered separate judgements in respect of both matters on 20 June 2024. In short, Ms Justice Phelan refused the relief sought by both platforms and dismissed the proceedings.

Before discussing the judgements in detail, it is worth noting that the parties in both proceedings sought to adduce ex post facto expert evidence.

Ex Post Facto Expert Evidence

An Coimisiún took the step of introducing an Affidavit from an expert, Mr Sykes, despite the fact that no expert third party opinion was sought by An Coimisiún for the purpose of making the Designation Decision. Both Reddit and Tumblr did file replying Affidavits and took issue with the admissibility of ex post facto Affidavit evidence from experts when no such evidence was available to An Coimisiún when making its Designation Decision. In both matters, the Court concluded that there was no necessity for expert evidence to enable it to address the specific issues raised in these proceedings relying on the long-established position in this jurisdiction that the decision should speak for itself and that the Designation Decision in both circumstances must stand or fall on its own terms. Accordingly, Judge Phelan decided not to attach any weight to the ex post facto expert evidence adduced in both matters.

Reddit

Reddit, Inc’s pleaded case in the Statement of Grounds in relation to jurisdiction was based on two main arguments: that Reddit, Inc. itself, rather than Reddit Ireland Limited, was the provider of the service to EEA users and that Reddit Ireland Limited did not maintain a stable and effective link with the economy of Ireland sufficient to ground jurisdiction in An Coimisiún as competent authority within the State. In this regard, the Court held that Reddit Ireland Limited maintains a stable and effective link with the economy of Ireland and that it was the subsidiary undertaking through which Reddit, Inc. first began its activity within the European Union, such that the Reddit, Inc. is deemed to be established within the jurisdiction of the State pursuant to section 2B(4)(b) in accordance with section 2B(5) of the 2009 Act. In making this decision, the Court made reference to the reasons set out by An Coimisiún in its Designation Decision and correspondence to Reddit.

The Court further held that an embedded or hyperlinked video is capable of constituting a "user generated video" within the meaning of the Revised AVMS Directive and that it was proper for An Coimisiún to have regard to the fact that this content existed. In its decision, the Court interpreted the Revised AVMS Directive in a manner which seeks to ensure its broad application, in line with its purpose and objective, in a manner which ensures its effectiveness in protecting users and consumers against harmful content. Turning to Reddit's contention that there was an error of law and/or fact in interpreting the EC Guidelines, the Court noted that its role in this respect was to guarantee legality in the exercise of its functions by An Coimisiún as a community authority before  holding that  An Coimisiún carried out its function in this respect.

The Court found that great care was taken by An Coimisiún, including a fully open and transparent engagement process, in arriving at the Designation Decision. The Court determined that Reddit failed to demonstrate an error in the interpretation and application of the essential functionality test before dismissing the proceedings.

Tumblr

In respect of Tumblr, the Court held that An Coimisiún properly interpreted and applied the "essential functionality" criterion applicable under the Revised AVMS Directive. The Court noted the fact that there is an average of 89,566 videos posted on Tumblr in the EU each month giving a total of more than a million videos a year shared on that platform in the EU. In this regard, the Court found it difficult to reconcile an argument that video functionality is minor and incidental with the presence of user generated videos on this scale on the platform. The Court held that the potential reach of these videos was a factor to which An Coimisiún was clearly entitled to attach weight when considering indicators identified under the EC Guidelines including reach.

When considering the reasoning provided by An Coimisiún to explain its decision that Tumblr was a VSPS within the meaning of s. 2(2) of the 2009 Act, the Court held that it was immediately apparent that An Coimisiún had a "faithful" consideration of the indicators identified in the EC Guidelines.

The Court was also not satisfied with Tumblr's ground of challenge that An Coimisiún failed to provide adequate reasons for the Designation Decision. In this respect, the Court made reference to the Decision, which runs to a total of 18 pages, setting out a "detailed statement" of the reasons why An Coimisiún considered that Tumblr ought to be designated as a VSPS. In response to Tumblr's contention that An Coimisiún failed to provide an explanation as how to how they formed the view that the qualitative data outweighed the quantitative data, the Court held that, in considering the EC guidelines, that the duty to give reasons does not extend to a duty to measure out the relative weight being ascribed to different indicators identified in the reasoning. In this regard, the Court was satisfied that the contested Designated Decision is reasoned to the requisite degree.

Furthermore, the Court was satisfied that Tumblr failed to identify any relevant consideration to which An Coimisiún ought to have had regard but did not, or any irrelevant consideration to which An Coimisiún improperly had regard, in making the Designation Decision. The Court also held that the Designation Decision was grounded in the evidence of a proper application of the legal test for an essential functionality informed by relevant considerations and the Designation Decision was no vitiated by manifest errors of assessment.

You can access to Tumblr judgement here and the Reddit judgement here.

5. What this means?

An Coimisiún published the below response:

"We welcome the Court’s Judgment and the confirmation our designation of Reddit and Tumblr as Video-Sharing Platform Services. We are moving forward with our draft Online Safety Code and expect to have it in place later this year, as part of our overall Online Safety Framework. We are committed to using our full range of powers to improve online safety for users in Ireland and across Europe."

Undoubtedly, this can be seen as a great victory for An Coimisiún and one the regulator will take confidence from as they move forward to implementing their Online Safety Code later this year. An Coimisiún will also note the Court's comments in respect of both judgements highlighting the transparent and engaging steps taken by An Coimisiún prior to the designations.

Insofar as the applicant platforms are concerned, these judgements mean that they may be subject to the Online Safety Code once it is implemented. Accordingly, these platforms may have to take proactive steps to ensure compliance with the Code once commenced.

For the wider online social media sphere in general, these judgements act as a gentle reminder that online safety regulation is here and is not going anywhere.

If you require any advice or assistance, please do not hesitate to contact Sinéad Taaffe or Damien Watson of this office.