File hosting service provider – a business model entitled to legal protection as a principle caught in the pitfall of liability?

File hosting services, often referred to as “file hoster” or “share hoster”, are cloud storage services, that provide storage space on the Internet either for a fee or free-of-charge. After a file is uploaded to the server of a file hosting service, the system generates an individual link to the relevant file which the user can – if he wishes – forward to an unlimited number of recipients. Recipients can then directly access the corresponding content via their web browsers by clicking on the link sent to them.

These services are equally practical (especially for memory–intensive content that overextends regular email services) as they are controversial. Since file hosting services are occasionally used to disseminate copyright-protected works, they have been a thorn in the side of right holders for years. Hence, proceeding against the hosting service provider, instead of taking action against the perpetrators and beneficiaries of the copyright infringement, who are often laborious to find or simply untraceable, would seem manifest. Nevertheless, there are numerous legal issues that arise in this context, i.a. in the fields of constitutional law, criminal law, data protection law and copyright law.

The research center for IT-law and network policy at the University of Passau – short For..Net – has profoundly examined the legal implications of file hosting services and drafted an academic legal opinion – particular by the example of – on behalf of the Cyando AG. The substantial research results will be summarized in the following, the original legal opinion can be consulted through the download-link provided below.

The business model of a file hosting service – without regard to its specific form in the individual case – is one of which the legal system approves as a fundamental matter and is hence deemed a legal service ...

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