INTERNET LAW - Do Internet Licenses Constitute a 'Possession' under Art. 1 of the EU Convention on Human Rights?

Yes, according to a recent decision by the European Court on Human Rights, Internet licenses constitute 'a possession' under the meaning of article 1 of the European Union ("EU") Convention on Human Rights.  This decision was rendered on April 8th, 2008, when the Government of Moldova arbitrarily invalidated 2 Internet licenses held by a Moldovan company- supposedly the biggest Internet company in that country.    After being defeated in the national courts, the Moldovan company filed a complaint before the European Court on Human Rights alleging violation of art. 1 of the Convention on Human Rights; and this Court has finally ruled on its favor.  Following, there is a brief recount on this interesting EU/internet related case.

The parties to these proceedings before the European Court on Human Rights are the Government of Moldova- as defendant - and Megadat.com- as plaintiff.  Megadat.com was a Moldovan company, incorporated and operating within the territory of Moldova, and holder of 2 Internet licenses whose expiration dates were April and May 2007.  It is alleged that Megadat.com held over 70% of the Internet service in Moldova. 

In 2002, Megadat.com moved its headquarters offices and informed the respective Moldovan Tax and State Registration Chamber authorities; yet, it failed to inform the Internet national regulatory agency as it was required by this agency's administrative rules.  The regulatory agency rules required that holders of Internet licenses communicated any change of address within the following 10 days of the change. 

On September 2003, the government Internet agency cited 91 companies, including Megadat.com, and warned them to pay annual registration fees and/or inform this agency of any change of address within 10 days, or they could face suspension of their Internet licenses for up to 3 months.   Megadat.com received this letter on September 24th, 2003, and immediately sent the change of address notification.  Hence, on October 2003, the Internet agency questioned Megadat's office lease and requested additional documents, and without providing additional time for submission of the requested documents, the Internet agency invalidated Megadat's Internet licenses.  Megadat's company was closed and its Director arrested for a pacific-silent protest.  A year later, the agency rules were modified and it required a waiting period of 6 months for those companies whose licenses were invalidated and that were seeking to re-apply. 

After unsuccessful legal attempts before national courts, Megadat filed its complaint before the European Court on Human Rights.  As legal basis, Megadat argued that invalidation of its Internet licenses constituted violation of art. 1 of the First Protocol of the Convention on Human Rights because its Internet licenses were possessions under this article.   Additionally, Megadat argued that invalidation of its licenses was an unjustified and disproportionate action and it was not justified by any policy consideration.  In fact, Megadat proved that other companies cited were merely suspended and their licenses were not invalidated and that the law was suspiciously changed after its license was invalidated. 

 Art. 1 of the Convention on Human Rights says:

"Every natural or legal person is entitled to the peaceful enjoyment of his possessions.   No one shall be deprived of his possessions except in the public interest   and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."   

After lengthy arguments from both parties, the European Court on Human Rights held that it was undisputed that the company's Internet licenses constituted a possession for the purposes of art. 1 of  Protocol 1 to the Convention on Human Rights and that the invalidation of the license constituted interference with the right to the peaceful enjoyment of possessions guaranteed by art. 1 of Protocol 1 to the Convention.  Yet, invalidation of the Internet licenses, the Court said, was not a deprivation of possession according to the second sentence of art. 1 but a measure of control of use of property, which deserved analysis under the second paragraph of the art. 1. 

The Court considered that the measures taken by the Government of Moldova were disproportionate.  The government knew the new address of the company (its citation was directed there) and it had not problem in communicating with the company at its new address.  The court also pointed the irregularities it found in this case like the fact that the Internet agency had issued a third license to Megadat with the 'old address' on it despite Megadat's information about the new address;  the denial of time to provide the additional documents requested; the abrupt change on the re-application procedures; and the extremely harsh consequences to whish Megadat was subject (contracts cancelled, forced to sale assets in short term, and additional tax sanctions). 

Thus, the Court held that there was a violation of art. 1 of Protocol 1 to the Convention on Human Rights when the Government of Moldova invalidated these two Internet licenses.