Mexico's Senate has approved amendments to the Federal Copyright Law that will require internet service providers to operate a policy for cutting off repeat copyright infringers, or risk being held liable for what their subscribers do.
The amendments passed on Tuesday with about two thirds of the vote, with the opposition voting against. The Chamber of Deputies had approved the same text in October, so the decree now goes to President Claudia Sheinbaum.
The government proposed the changes in May to bring the law into line with the USMCA trade agreement. In January the International Intellectual Property Alliance said Mexico's 2020 copyright reform lacked a clear principle of secondary liability, and in April the United States Trade Representative moved Mexico to a lower tier of its piracy watch list, citing the draft amendments.
The 2020 reform had introduced safe harbours modelled on the American DMCA, protecting hosting platforms and search engines provided they maintained a policy for terminating repeat infringers. Consumer internet providers were not covered. They now are.
Under the new rules a provider must adopt a repeat-infringer termination policy, publish it permanently on its website and in its terms of service, and include a basic mechanism for notifying users. Termination can mean cutting off the internet connection itself. According to the business outlet EL CEO, access providers including Telmex and Izzi will need such a policy.
A provider that fails to meet the safe harbour conditions can then be held liable if it knowingly contributes to, induces or causes infringement, or if it can control the infringing user and profits directly from the infringement. Mexico's industrial property institute, IMPI, can impose fines of up to roughly 4.7 million pesos, about 250,000 dollars, depending on the infringement.
The amendments do not define a repeat infringer, and they do not say how many accusations are needed before a connection is cut.
Aurora Lopez-Portillo of the firm ClarkeModet says this leaves each provider to set its own threshold, and that providers should verify accusations and give subscribers a chance to respond, although the law does not require either. Opposition senators raised the concern that one person's downloading could disconnect an entire household sharing a connection. A proposal to require a court order before any suspension was not adopted.
The contrast with the United States is instructive. Following the Supreme Court's Cox decision, failing to meet the DMCA's repeat-infringer requirement does not by itself establish infringement; Justice Thomas wrote that a company is not liable "merely for providing a service to the general public". Mexico's drafting instead makes the failure to meet the safe harbour conditions the first step towards liability.
The rules take effect 180 days after publication in the official gazette, which had not happened as of TorrentFreak's report.
This newspaper has read the drafting carefully and wishes to record an administrative advance. The law creates a category, attaches the loss of a household's internet connection to membership of it, and then declines to say who is in it.
The definition is therefore written by the provider, published permanently on the provider's own website, and enforced by the provider against the provider's own customers. A repeat infringer in Mexico is whoever the terms of service say a repeat infringer is.
Our analysts note the immediate consequence, which is that the offence is now a property of the network rather than of the subscriber. The same conduct on the same laptop may constitute a third strike on one provider and a first on another, and a household can therefore reduce its offending by changing supplier.
This makes the number of strikes a competitive variable. It appears beside the download speed, the contract length and the included router, in the one document nobody reads.
The Department of Unnecessary Research has identified the stable equilibrium. Any provider that sets its threshold at one accusation will lose its customers to a provider that sets it at four, and the figure will settle wherever customers stop reading.