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 reported by copyright holders.
Cloudflare stated it will contest 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 processes approximately 200 billion daily requests, would significantly increase latency and negatively impact DNS resolution for legitimate sites.
AGCOM rejected Cloudflare's arguments, asserting that the required blocking would not pose a risk to the DNS system. The agency said it applied a fine equal to 1 percent of Cloudflare's annual turnover, as the Piracy Shield law allows for fines up to 2 percent. The fine is related to a blocking order issued to Cloudflare in February 2025.
The Piracy Shield law, controversial in its own right, aims to combat online piracy by enabling swift blocking of websites deemed to be infringing copyright. It operates by requiring internet service providers (ISPs) and DNS providers like Cloudflare to implement blocking measures based on reports from copyright holders.
Cloudflare's refusal to comply raises questions about the balance between copyright enforcement and internet freedom. The company's 1.1.1.1 DNS service is known for its privacy-focused approach and commitment to net neutrality principles. Implementing blocking measures could be seen as a compromise of these principles.
The implications of this case extend beyond Italy. It highlights the challenges of applying national laws to global internet infrastructure. DNS, or Domain Name System, acts as the internet's phonebook, translating human-readable domain names into IP addresses that computers use to communicate. Blocking DNS resolution effectively makes a website inaccessible to users who rely on that DNS service.
The use of AI in identifying and blocking infringing content is also a relevant factor. While copyright holders may employ AI-powered tools to detect piracy, the accuracy and potential for false positives remain concerns. Overly broad blocking measures could inadvertently restrict access to legitimate content.
The case also touches upon the concept of "algorithmic sovereignty," which refers to the ability of nations to regulate and control the algorithms that govern online platforms and services. Italy's attempt to enforce its Piracy Shield law on Cloudflare is an example of a nation seeking to exert its algorithmic sovereignty.
The next steps involve Cloudflare's legal challenge to the fine. The outcome of this case could have significant implications for the future of internet governance and the role of DNS providers in copyright enforcement.
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