Italy's communications regulatory agency, AGCOM, yesterday announced a 14.2 million euro fine against Cloudflare for refusing to block access to pirate sites on its 1.1.1.1 DNS service. The fine was issued under Italy's Piracy Shield law, which requires internet service providers and DNS resolvers to disable DNS resolution of domain names and routing of traffic to IP addresses identified by copyright holders.

Cloudflare stated it would fight the penalty and threatened to remove all of its servers from Italian cities. The company argued that implementing a filter on its DNS system, which handles approximately 200 billion daily requests, would substantially increase latency and negatively impact DNS resolution for websites not involved in piracy disputes. AGCOM rejected this argument, asserting that the required blocking would not pose a significant risk.

The Piracy Shield law allows for fines of up to 2 percent of a company's annual turnover. AGCOM said it applied a fine equal to 1 percent. The fine is related to a blocking order issued to Cloudflare in February 2025.

The dispute highlights the ongoing tension between copyright enforcement and the technical realities of internet infrastructure. DNS, or Domain Name System, acts as the internet's phonebook, translating human-readable domain names (like example.com) into IP addresses that computers use to locate websites. Cloudflare's 1.1.1.1 is a public DNS resolver, offering a faster and more private alternative to the default DNS servers provided by internet service providers.

Blocking access to websites at the DNS level is a common method used to combat piracy, but it can also lead to overblocking and censorship. Critics argue that such measures can be easily circumvented by tech-savvy users while potentially harming legitimate websites that share IP addresses with infringing content.

The use of AI in identifying and blocking infringing content is also a growing area of concern. While AI algorithms can quickly scan vast amounts of data to detect copyright violations, they are also prone to errors and biases. This raises questions about due process and the potential for legitimate content to be mistakenly blocked.

Cloudflare's stance against the Piracy Shield law reflects a broader debate about the role of internet infrastructure providers in policing online content. The company has consistently argued that it should not be held responsible for the content that passes through its network, and that imposing such obligations would set a dangerous precedent.

The outcome of Cloudflare's challenge to the fine could have significant implications for the future of internet regulation in Italy and beyond. It remains to be seen whether other countries will adopt similar measures to combat online piracy, and whether internet infrastructure providers will be willing to comply with such demands. The case also underscores the complex interplay between technology, law, and policy in the digital age.