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, issued under Italy's Piracy Shield law, requires Cloudflare 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 significantly increase latency and negatively impact DNS resolution for legitimate sites. "Installing a filter applying to the roughly 200 billion daily requests to its DNS system would significantly increase latency and negatively affect DNS resolution for sites that aren’t subject to the dispute over piracy," Cloudflare said in a statement.

AGCOM rejected Cloudflare's arguments, asserting that the required blocking would not pose a risk to the overall system. The agency said it applied a fine equal to 1 percent of Cloudflare's annual turnover, within the Piracy Shield law's provision for fines up to 2 percent. The fine relates to a blocking order issued to Cloudflare in February 2025.

The Piracy Shield law is controversial, raising concerns about potential censorship and the impact on internet freedom. The law aims to combat online piracy by enabling rapid blocking of websites deemed to be infringing copyright. Critics argue that such measures can be easily circumvented and may lead to the blocking of legitimate content.

Cloudflare's 1.1.1.1 DNS service is a public DNS resolver designed to provide faster and more private internet browsing. DNS, or Domain Name System, translates domain names (like example.com) into IP addresses that computers use to connect to websites. When a user types a website address into their browser, the DNS resolver looks up the corresponding IP address. Blocking DNS resolution effectively prevents users from accessing specific websites through that DNS service.

The conflict highlights the ongoing tension between copyright enforcement and the principles of an open and accessible internet. The case raises questions about the role of DNS providers in policing online content and the potential for such measures to impact internet performance and user privacy. The implications extend beyond Italy, as other countries grapple with similar issues of online piracy and content regulation.

The next steps involve Cloudflare formally contesting the fine and potentially initiating legal action. The outcome could set a precedent for how DNS providers are regulated in Europe and elsewhere, impacting the future of online content accessibility and copyright enforcement.