What happens if two people plan illegal activities over the phone? Clearly they can be investigated and prosecuted, and deservedly so. But could the phone company also be considered liable? What if you replace the phone company with information society intermediaries, such as access providers, hosting providers, search engines, auction platforms, and [web 2.0]  operators?
Let's look at the situation from a European angle. The [Electronic Commerce Directive], which regulates the liability of Internet service providers, implemented the principle of neutrality, recognizing limitations of liability for entities acting as intermediaries. The directive drew a clear line between those producing content for the Internet, and those who, in their capacity of technological intermediaries, simply provide the technological means and tools to make this content accessible and available
By doing so, the directive addressed the liability issue of Internet service providers, in a way that is consistent with their role of intermediaries, and set the basis for the development of the information society has we know it, creating a single market for information services by harmonising the legislation in different countries.
This legal regime has allowed the the rapid growth of the Internet and the development of the new economy within the European Union.
We are in the middle of revolution where new business models give to consumers the opportunity to enjoy free services (as Chris Anderson stated recently: "It's now clear that practically everything Web technology touches starts down the path to gratis, at least as far as we consumers are concerned"). A whole new economy is flourishing thanks to the stability created by the safe harbour for information society intermediaries. The consequences of regulatory change would definitely affect the way all of us are approaching the Web in Europe, increasing prices for Internet services and diminishing choices.
The impact of the electronic commerce directive on the European economy shows that affirming the principle of neutrality is the way forward if we wish to ensure the development of web 2.0 (user-created content), the importance of which was recently confirmed by the [OECD], showing that this phenomenon has moved away from individual use of technology and become an important driver of development and innovation for the European economy as a whole.
For this reason we believe the fight against illegal content online should follow the route suggested by the European Commission in its recent [report] on creative content online, providing incentives for self-regulation and private agreements between Internet service providers and right owners, involving all the relevant players and developing existing systems for reporting content.
This is an interesting article on the famous Italian case called Vividown about ISP liability from Cedric Manara: http://www.ecrans.fr/Un-proces-crucial-pour-le-futur-d,8103.html