Recent media reports indicated that Germany was considering legislation that would fine social networks for failing to combat fake news and hate speech.  Today, German Justice Minister Heiko Maas introduced a “Draft Law to Improve Law Enforcement in Social Networks” (abbreviated as the Network Enforcement Act (Netzwerkdurchsetzungsgesetz), or “NetzDG”).  The NetzDG aims to curb “hate-based criminality” in large social networks that have the potential to drive public opinion, and to improve law enforcement access to evidence held by social networks.  The Justice Department’s NetzDG draft states it views a statute as necessary because “the self-regulation that was agreed with social networks has proven to be insufficient.”

The NetzDG contains an array of compliance requirements for “social networks.”  Social networks are defined as (a) providers of telemedia services that, (b) for purposes of generating profit, (c) operate platforms in the Internet, which (d) permit users share content, to make content public, or to exchange content with other users.   Internet platforms that offer their own “journalistic-editorially arranged content” do not count as “social networks.”  Also, platforms are not considered in-scope “social networks” unless they have 2 million registered users in Germany.  However, the NetzDG states that closed fora (“gated communities”) can still constitute in-scope social networks if they cross the 2-million-user threshold.

The NetzDG requires in-scope social networks to meet a number of new compliance requirements.  Among the most salient are:

• Complaint & Takedown Procedures for Illegal Content: Social networks must provide an “easily identifiable, directly accessible, and continuously available” mechanism for users to submit complaints about illegal content. When a complaint is received, the social network must “immediately” take notice and evaluate whether content is in fact illegal.  If content is “clearly illegal,” it must be removed within 24 hours.  Any other illegal content must be taken down within 7 days.  When removing content, the social network must (a) save a copy of the content in Germany for use as evidence; (b) remove all other copies of the illegal content from the network; (c) implement effective measures to prevent the illegal content from being re-posted; and (d) provide the user whose content was taken down with a reasoned explanation for its removal.

US readers unfamiliar with foreign speech-based crimes may ask what kind of content qualifies as illegal.  The NetzDG defines “illegal content” as 14 specific crimes set forth in the German Criminal Code.  Examples include Public Incitement to Commit Crime (§ 111 Criminal Code), Rewarding or Approving of Crimes (§ 140), Incitement of Hate-Based Violence (Volksverhetzung, § 130), and various forms of insult and defamation (§§ 185-187).

• Compliance Management: The NetzDG requires C-level management within social networks to conduct “monthly reviews” of how the company is handling complaints. Any “organizational deficiencies” must be “immediately redressed;” otherwise, the network risks a fine at the significant levels described below.  Any employees of the social network tasked with processing or responding to complaints must be provided with biannual, German-language training.  Additionally, “every complaint” as well as all “measures taken in remediation” must be documented, and the documentation maintained within Germany.

• Quarterly Reporting: The NetzDG requires social networks to publish a detailed quarterly report, in German, containing information on complaints and the network’s complaint procedures.  In particular, the mandatory quarterly report must contain (a) a general description of the network’s efforts to prevent “criminal acts” on its platforms; (b) the numbers of complaints received, and the reasons for the complaints; (c) the number of complaints that required “external consultation;” (d) the number of complaints that resulted in a takedown; (e) the average processing time for complaints; (f) a description of the complaint intake mechanisms and network’s criteria for granting a takedown; (g) a description of the personnel involved in processing complaints, as well as their professional qualifications, language abilities, and training.

• Appointing Representatives in Germany: Earlier this year, the Interior and Justice Ministers of several German states suggested that social networks should be required to appoint a representative in Germany to accelerate networks’ responses to subpoenas and other requests for evidence. The NetzDG implements this suggestion.  Under § 5 NetzDG, social networks are required to appoint a registered agent in Germany who is authorized to receive process in administrative proceedings that may result in a fine, or in civil proceedings.  Additionally, social networks must appoint a representative authorized to receive and respond to “requests for information” from law-enforcement agencies.

The NetzDG provides significant fines for non-compliance with the complaint and takedown requirements described above.  Individuals who violate those requirements can be fined up to € 500,000.  Companies that violate complaint and takedown requirements – including by failing to redress organizational deficiencies – can be fined up to € 50,000,000.

At this point, the NetzDG is a Justice Department draft.  It must still be debated among the Cabinet of Federal Ministers, after which it can be released to the houses of the German Parliament for debate and passage.  A copy of the NetzDG draft released today (in German) can be downloaded here.

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