YouTube may lose EU liability shield for videos on partnered channels

(CN) — The closer YouTube gets to the business of illegal gambling videos, the less protection it may have from lawsuits, the European Union’s top court ruled Thursday.

Google is challenging a 750,000-euro (about $860,000) fine imposed by Italy’s communications regulator, AGCOM, under the country’s 2018 ban on virtually all direct and indirect gambling advertising. The penalty followed claims that YouTube creators used five channels to promote gambling websites and encouraged viewers of any age to submit videos of their winnings in exchange for cash rewards. Along with the fine, the regulator ordered Google to remove 630 videos and similar content.

Google, meanwhile, argues that while gambling itself falls outside the EU’s e-commerce rules, platforms hosting gambling advertisements do not. It warned that requiring YouTube to inspect uploaded videos would amount to censorship and undermine both users’ freedom of expression and its ability to provide cross-border online services.

The Court of Justice of the European Union agreed on that point, holding that excluding gambling from the directive does not automatically strip a neutral hosting service of its legal protections because simply storing user-uploaded videos is treated as a neutral service under European law. “The activity of online hosting is not intrinsically linked to that gambling,” the judges said.

That protection can disappear, however, if a platform moves beyond acting as a passive host. To join YouTube’s Partner Program, creators must meet subscriber and viewing thresholds, while Google reviews a channel’s theme, its newest and most-watched videos and related metadata before allowing it to share advertising revenue.

“Where the activity of the operator of an online platform results in it knowing the essential content uploaded by a user to that platform, it cannot rely on the exemption from liability,” the court said.

The judges added that platforms do not lose that protection simply because users report illegal material or automated tools flag suspicious content. Here, however, Google reviewed the channels as part of its commercial partnership with the creators. Subject to verification by the Italian court, the judges said, “Google could not reasonably have been unaware that their main theme was gambling and games of chance and that they contained a number of videos advertising such games.”

That’s where the court may have moved the goalposts. Martin Husovec, an associate professor of law specializing in internet regulation at the London School of Economics, said the judgment appears to broaden what counts as a platform’s knowledge of illegal content. “It seems like the court is expanding the notion of knowledge, and thus opening another front of controversies, next to neutrality and scope of application,” he said.

Marco Bassini, an assistant professor of fundamental rights and artificial intelligence at Tilburg Law School, said the biggest surprise was that the court parted ways with Advocate General Maciej Szpunar. While the advocate general viewed YouTube’s checks before admitting creators to its partner program as a routine eligibility review, the court saw those same checks as enough to show Google knew what the channels were about.

Bassini said that could leave platforms in a difficult position. If reviewing a channel’s theme or top videos before allowing it to earn advertising revenue is enough to remove legal protection, platforms could have a “perverse” incentive to carry out fewer compliance checks, not more. He said that sits uneasily with the Digital Services Act, which was designed to encourage platforms to investigate potentially unlawful content in good faith without automatically losing their liability protections.

The real question now is where neutrality ends. Oreste Pollicino, a professor of constitutional law and artificial intelligence regulation at Bocconi University, said the judgment shifts the focus away from formal labels and toward how a platform actually operates. “The relevant threshold is not a generic awareness that unlawful activities may occur online, but specific knowledge of the essential content of the advertisements concerned,” he said.

Rather than creating a sweeping duty to screen everything before publication, Pollicino said, the court is signaling that liability protection cannot become a form of structural immunity once a platform acquires sufficiently detailed knowledge through its own commercial arrangements. He said the bigger constitutional significance lies in the court asking not simply who created the content, but whether a platform can still credibly present itself as a neutral intermediary once it has that level of knowledge and involvement.

Google and AGCOM did not respond to requests for comment.

Thursday’s judgment is final and cannot be appealed. The case now returns to Italy’s Council of State, which will decide whether Google crossed that line and whether AGCOM was right to fine the company.

Courthouse News reporter Eunseo Hong is based in the Netherlands.