The recent case (March 2000) involving Demon Internet and academic Dr Laurence Godfrey has caused tremors in the ISP and web-hosting industry in the UK.
Godfrey alleged that he had been libelled in newsgroups hosted by Demon. Demon denied liability, but eventually, following proceedings issued by Dr Godfrey, settled out of court. A preliminary court hearing in March 1999 paved the way for the settlement.
ISPs have continually argued that they have no responsibility for content on the net, and that they are merely conduits who facilitate a presence on the web.
I have much sympathy with this approach: why should an ISP have liability for defamatory material on the Internet? Take for example the position of a telephone company. A person who indulges in a slanderous conversation over the telecommunications infrastructure does not incur liability for BT for having provided the telecommunications system.
The law just hasn't kept pace with technology. The defamation laws in this country are currently covered under the Defamation Act 1966 really relates to "publishing" in the traditional sense. The courts have placed ISPs into the same category as book distributors - clearly inappropriate for this technology.
Because this case was settled, it has not set a precedent and is not binding. But clearly the earlier decision by the Court before the full trial lays the foundations of concern, and ISP's on that thinking will be held liable if material distributed is defamatory.
ISPs must wait with bated breath for the implementation of the Draft Directive on Electronic Commerce.
In its draft form, this excludes the liability of ISPs for content, provided that they merely transmit or host information without initiating, selecting or modifying the information.