Thursday 26 May 2016

The proposed new Audiovisual Media Services Directive: Key Features

Lorna Woods, Professor of Media Law, University of Essex

After a draft was leaked last week, the Commission proposal to revise the Audiovisual Media Services Directive (AVMSD) is now out.  Once again we see the Commission proposing the roll-out rather than the roll-back of regulation in the face of sector change.  The following provides an overview of some of the issues.

The first change is an extension of material scope.  The Commission explains in its Memo/16/1895 that a ‘limited extension’ will occur as the new proposal applies to ‘video-sharing platforms’, such as YouTube.  “Video-sharing platform services” are defined in new Article 1(aa) AVMSD (Art. 1(1)(b) of the proposal):

‘… a service, as defined by Articles 56 and 57 of the Treaty on the Functioning of the European Union, which meets the following requirements:
(i)                  the service consists of the storage of a large amount of programmes or user-generated videos, for which the video-sharing platform does not have editorial responsibility;
(ii)                the organisation of the stored content is determined by the provider of the service including by automatic means or algorithms, in particular by hosting, displaying, tagging and sequencing;
(iii)               the principal purpose of the service or a dissociable section thereof is devoted to providing programmes and user-generated videos to the general public in order to inform, entertain or educate;
(iv)              the service is made available by electronic communications networks within the meaning of point (a) of Article 2 of Directive 2002/21/EC.’

The phraseology and organisation here is different from the leaked draft. It makes clear the cumulative nature of the conditions but also clarifies that the organisational features of the video-sharing platforms identified are illustrative not an exclusive list.  It is also starting to engage with the issues surrounding editorial choice in an environment where ‘suggestions’ are made by programming – following big data profiling or just paid prominence. Moreover, the proposal integrates the point that such platforms can be caught if a ‘dissociable segment’ satisfies the definition, whereas the leaked version had a separate subclause (a ter) that applied a principal purpose test not just to video-sharing platforms but services defined in (1)(a)(i).

No doubt there will be much comment on the workability of this definition – not least where it draws the boundaries. Will there be difference in treatment between Instagram, Flickr and other photo-sharing sites, Twitter and Facebook (both of which have video capability, or link to videos) and Youtube, Vine and Vimeo; and are these sites similar to Dailymotion and For now, note the centrality of the concepts of ‘programme’, which by contrast to the leaked draft, gets a new definition (in Article 1(1)(b) AVMSD, replaced by Art. 1(1)(c) proposal), and ‘user-generated video’ (added to the AVMSD as (1)(ba)). This latter definition covers material created by end-users, but also material that such users may be re-using by uploading. This means the (unlawful) uploading of professional falls within the definition, but also material the creators of which are unknown.

The definition of programme does not apply just to video-sharing platform services, but is a central element in determining the scope of the AVMSD.  So, Rec. (3) (which was Rec 11 in the leaked draft) specifies that the AVMSD ‘should remain applicable only to those services the principal purpose of which is the provision of programmes to inform, entertain or educate’.  The purposes here are so broad that they can exclude nothing; the determinative element is therefore the programme.  This issue was the subject of litigation in the context of a press site which contained short video clips in New Media Online GmbH v. Bundeskommunikationssenat (Case C-347/14), in which the ECJ ruled that videos under a subdomain of a newspaper website could fall under the definition of a ‘programme’ within the AVMSD (an approach from which OFCOM has arguably differed in respect of its interpretation of the UK implementing regulations).   This position is reflected in Rec. 3, which notes that stand alone parts of newspaper sites can fall within AVMSD as can channels within video-sharing platforms.  Radio remains outside the AVMSD.

Under the current AVMSD,
(b)   ‘programme’    means    a    set    of    moving    images    with    or   without   sound   constituting   an   individual   item   within   a   schedule   or   a   catalogue   established   by   a   media   service   provider    and    the    form    and    content    of    which    are    comparable  to  the  form  and  content  of  television  broadcasting.   Examples   of   programmes   include   feature-length   films,   sports   events,   situation   comedies,   documentaries,   children’s  programmes  and  original  drama;

The proposal removes the phrase ‘and the form and content of which are comparable to the form and content of television broadcasting’ suggesting a move away from traditional television as the benchmark and towards a more open and arguably broader conception of just ‘an individual item’.

Rec 12 of the leaked draft is now found at Rec 26 and 27, slightly amended so as not to be limited to ‘video sharing’ platforms, though these are seen to raise particular issues.  Rec. 13 of leaked draft is now at Rec. 28 in a slightly amended form.  This change reflects the fact that the recitals refer to content restrictions rather than to scope, though Rec 28 contains the implicit acknowledgment that the proposal takes the possibility of regulation beyond those with editorial responsibility (even that at a very blunt level of choice – as in OTT services).  The Explanatory Memorandum skirts this issue, recognising that there will be a point of interplay with Articles 14 and 15 of the e-Commerce Directive (ECD). Those provisions provide immunity from damages for hosts with no knowledge of problematic content and prohibit the imposition of monitoring requirements (see also Rec. 30).  The proposal also recognises the need to include those services providers that are not established within the EU but are part of a group so as to ensure effectiveness of protection (Art. 28b).  In this context, we might be reminded of the reasoning of the Court in determining jurisdiction under the Data Protection Directive in Google Spain: legal form was not determinative of this question, but instead the business reality.  OFCOM in its response to the Commission’s consultation last year expressed concern about rules that would be ‘disproportionate and impractical’.  These provisions need also to be understood about the on-going trade negotiations with third countries, such as TTIP, which may affect their feasibility.

One of the main concerns with regard to video-sharing platforms is hate speech the understanding of which – in relation to all regulated platforms - ‘should, to an appropriate extent’ be aligned to Framework Decision 2008/913/JHA (concerning criminal expressions of racial hatred), specifically as regards the grounds on which hatred may be incited (Rec. 8).  What this means in practice, given the qualifiers used, as well as the relationship with the ECD in respect of video-sharing platforms, is uncertain (see Art. 28a(5)).  New Art. 6 AVMSD simply imposes on Member States the obligation to use ‘appropriate means’, the meaning of which is elaborated in Art. 28a. That provision points to a balancing of competing interests, which may allow for a certain degree of subjectivity and variation across Member States.  Art. 6a deals specifically with the protection of minors from a wider range of content – that likely to impair physical mental or moral development.   This envisages the need to give information to viewers so that they may make appropriate choices of viewing, rather than the imposition of technical measures. 

Another contentious issue has related to the country of origin (COO) principle, specifically where AVMS providers engage in forum shopping and ‘broadcast back’ to the ‘original’ target country.  This has always been problematic, with a body of jurisprudence on abuse of rights leading to specific exception provisions in the AVMSD.  The idea of COO, however, has always been popular with industry players as it avoids re-versioning costs and other costs associated with separate markets.  Whatever the view on COO, the anti-abuse provisions in AVMSD were complex and the issue of establishment open to interpretation.  The principle of freedom of re-transmission is restated but the possibility of derogating is extended to all audiovisual media services, not just broadcasting as is currently the case (see proposed Art. 3(2) – note differences in procedure between linear and non-linear services apply).  The grounds are those set out in Art 6, which contains an extended category of grounds of hate speech prohibited, and new Art. 12 which contains the ‘pornography provision’: transmission of relevant material is permitted, but in a way so that minors cannot access the material.  This applies to all AVMS providers.  The current broadcasting-only, protection of minors provisions (Art. 27 AVMSD), which currently act as triggers for the Art. 3 procedure, will be deleted.

While the AVMSD was a minimum harmonisation directive, recognised by Art. 4(1) AVMSD which allowed Member States to impose higher standards in respect of all fields coordinated by the directive, the proposal is now to limit the issues in respect of which Member States may impose stricter rules to Art. 5 (information obligations), 6 (hate speech), 6a (development of minors), 9 (standards for commercial communications), 10 (sponsorship), 11 (product placement), 12 (protection of minor- technical measures), 13 (on-demand quotas), 16 (tv European quotas), 17 (tv independent quotas), 19-26 (advertising and teleshopping rules), 30 (NRA) and 30a (ERGA).  In respect of the other provisions, it seems the AVMSD provides maximum standards.  It is notable that this latter category includes the provisions that are specific to video-sharing platforms as well as long-standing provisions such as the news reporting provisions.

There has been some ‘alignment’ of rules for linear and video on demand services (e.g. Art. 12).  This at an abstract level makes sense.  Commentators suggest that the industry trend is for entertainment, television and similar companies to focus on making and assembling content for distribution across the multiplicity of digital platforms available, in ways appropriate to those platforms but between which there may be overlap of form and content. Certainly, there is inter-platform competition.  So these changes are aimed at ensuring the mythical ‘level playing field’.  

The provision that has caught some attention when the proposal was leaked was that which imposes a European quota requirement on on demand AMS providers: at least 20% of the catalogue has to be European, and these works should be given prominence (Art. 13(1)).   It replaces the current provision which, in the words of the Commission ‘leaves room for testing different approaches’ but which potentially ‘unlevels’ the playing field.  Note that there is no ‘so far as practicable’ phraseology in this obligation (by contrast with the long-standing obligation on broadcasters), although member States may waive obligations in relation to small and micro enterprises (Art. 13(5)).  The obligation of ‘prominence’ is also not qualified (contrast the UK rules regarding ‘due prominence’ of PSB). Presumably it is intended at address the point made by the Society of Audiovisual Authors that currently on Netflix ‘where you have to look for European works (or even national works) under the rubric “Foreign Films”’ – not necessarily the most enticing branding.  

The current TV quotas rules have not addressed the problem of scheduling undermining the effectiveness of the quotas, a point noted in the response to the Commission’s consultation.   The definition of “European” has been left unchanged – as have the tv quotas.  This proposal will no doubt please the EU film industry, though it is likely to be less popular with the distribution sectors, which are already warning about strangling a still not mature industry.  Against this background it is noteworthy that Netflix has produced a series in Europe (Marseille – perhaps to get a stronger foothold in the French language market) and is about to launch a second, as well as engaging with local broadcasters (e.g. “Kiss Me First” with Channel 4; “Suburra” with RAI). 

The proposal also introduces a requirement for Member States to set up legally distinct and functionally independent regulators, in many aspects following the Recommendation of the Council of Europe (Rec (2000) 23). While the desirability of independent regulators is recognised in most Member States as a way of safeguarding freedom of expression while achieving other societal and political goals, there is no such obligation in the current AVMSD framework. The need to introduce such a requirement may be a response to developments in some of the Member States where there have been changes to the regulatory architecture in respect of the media with consequent concerns about media independence. It further specifies with a non-exhaustive list the remit on such regulators:  media pluralism, cultural diversity, consumer protection, internal market and the promotion of fair competition.  These roles must be established in law and carry with them enforcement powers.  A right of appeal for viewers/end-users must be provided.  Significantly, this requirement applies across all AVMS providers, including video-sharing platforms. 

The proposal also formalises the European Regulators Group for Audiovisual Media Services (ERGA) (which was established on the basis of a Commission Decision in 2014), in response to a perceived need for greater senior level cooperation in European audiovisual policy developments. The response to the group has been mixed, some questioning whether it adds anything to the existing groups, such as the Contact Committee and the European Platform of Regulatory Authorities (EPRA) which exists outside the EU framework. Alternatively, given the proposed expansion of the AVMSD and the uncharted territory awaiting the regulators, a mechanism for coordination may be important for the functioning of the COO principle.  ERGA has already produced reports for the Commission on independence; on the protection of minors in a converged environment; and on material jurisdiction as part of the preparation for the review of the AVMSD.

Historically, the broadcasting and now the audiovisual sector has revealed deep divides between member states and also between various sectors of industry.  The Commission has no doubt attempted to produce a balance of interests after an extensive review process.  What will remain once the Council and the European Parliament start to look at this, especially after what is likely to be intensive lobbying, is anybody's guess.  It may even be affected by Brexit; while the directive should be agreed before any UK exit, surely the UK’s negotiating position would be weakened between any ‘no’ vote and actual exit, shifting the balance between the free market and dirigiste Member States.

Barnard and Peers: chapter 14
Photo credit: Theon Greyjoy

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