Revision of Audiovisual Media Services Directive – Video-sharing Platforms

Professor Lorna Woods, University of Essex

The revision of the Audiovisual Media Services Directive has been discussed since 2016.  There were significant differences between the responses of the Council and the European Parliament to the Commission’s proposal.  There have been 9 informal trilogue meetings up to and including that of 26th April 2018.  Although the institutions state progress has been made, the text has not yet been finalised - ‘technical details’ remain to be agreed in June. In response to a request to see the preparations for trilogue negotiations, the Council rejected the request even to access the agreed compromise positions, stating that “this file is under heavy pressure from interest groups which are particularly interested in the negotiations on commercial communications (i.e. advertising) where economic stakes are high”.  The concern is that even existing agreements may be undermined. Nonetheless, from the documents that are available some comments can be made. 

This note focusses on one of the more startling innovations from the Commission’s proposal – the provisions on “video-sharing platforms” - a further extension in scope of the AVMSD (or some parts of it).  So, the first point to note is that although there might be significant differences between the institutions as far as the nature of the obligations to be imposed on video-sharing platforms, and even understanding as to what constitutes such a platform, it seems that the institutions are agreed that some obligations should be imposed.  The question is not ‘if’, but ‘how’.

What is a Video-sharing Platform?

The proposal added at Article 1(1)(aa) a definition of “video-sharing platform” (VSP), with a corollary definition of “video-sharing platform provider” at Article 1(1)(aa).  As originally drafted, the definition of VSP contained 6 elements:

-          that there be a service within the meaning of the TFEU – in this, there is the same starting point as for audiovisual media services;

-          the service consists in the storage of a large amount of programmes (as defined in the directive, and this definition is proposed to be changed from its current formulation too);

-          that the provider of the service does not have editorial responsibility (another defined term) for the content stored – this seems to be a key element for drawing a boundary between on-demand audiovisual media services and VSPs, as on-demand AMS providers may also organise content;

-          the organisation of the stored content is determined by the service provider, whether automatically or not;

-          the principal purpose of the service (or of a ‘dissociable part thereof’) is “devoted to providing programmes and user-generated videos to the general public, in order to inform, entertain or educate’; and

-          as for other services within the AVMSD, the service is made available over an electronic communications network.

The obvious comment that was made – and that was made about the definitions in previous incarnations of the directive – is that there will be some very difficult boundary cases, especially as services and technologies develop.  This remains the case, but it seems that this definition is broad enough to catch most social networking sites, providing the requirement of ‘to the general public’ does not mean that open to all free to use sites that have a brief registration process are not open ‘to the general public’.

Some points of difference in the approach of the various institutions can be noted.  The Council proposal sought to remove the phrase ‘large amount of’, while the European Parliament suggested that the activity was not ‘storage’ but the ‘making available’ of such videos ‘to the general public’.  The first part of the European Parliament’s amendment makes the scope of the definition wider. One might infer that the Council’s concern was to make it clear that live streaming sites did not fall within the AVMSD and might be regulated under national rules, as can been seen in Council proposed recital 29a (subject to the constraints of the e-Commerce Directive or general principles of Union law – depending on the content of the service), though the Council has also proposed the removal of the word ‘hosting’ from the list of means by which the content may be organised.  Whether or not this is a ‘technology neutral’ approach – which is part of the motivation for revising the AVMSD -depends on what is meant by ‘technology neutral’ and the level of granularity as which the technology is to be assessed.   

The inclusion of the requirement that the videos must be ‘in order to inform, entertain or educate’ tracks the terminology used to define audiovisual media services which is so broad that one might have thought that nothing could fall outside scope.  The Court in Peugeot (Case C-132/17) ruled that self-promotional audiovisual media channels on YouTube did not satisfy this requirement – a conclusion that will make decisions about the applicability or otherwise of advertising rules to user-generated content more significant – and bring into focus questions about the extent to which general consumer protection rules would apply in this field.

There is a definition of “user-generated video” added at Article 1(1)(ba) which tracks the definition of “programme” in so far as it describes the format of the material, but is limited to such audiovisual material that “created and/or uploaded to a video-sharing platform by one or more users”.  This requirement, as drafted by the Commission, does not require the user to be uploading their own material, or that of other users of the VSP.  The definition could cover the uploading of pirated material. The EP amendment proposed the removal of the word ‘created’ and the phrase ‘by one or more users’. While the former change seems to narrow the definition slightly, this latter change would remove some superfluity, as to upload one would have to be a user of the platform in its normal sense of the word (“user” is not a defined term).  The Council proposed changes would also narrow the definition, as it proposes limiting user-generated to that created by the user.  This seemingly excludes pirated material. While this seems to have some logic, generate is not the same as create. This impact of this proposed narrowing may be slight because the focus of regulation is the sharing platform, which does not have to exclusively carry user-generated video.  Would the effect of this change be to exclude video-sharing sites the dealt primarily in pirated videos from the directive’s ambit?

What Rules Apply?

The rules are found in Article 28a, with Article 28b dealing with questions about group companies and attribution of responsibility in that context.  It seems that the intention is that only the rules in this section should apply to VSPs and not the provisions in the directive generally, though the position is not entirely clear – particularly as regards advertising rules.

The Commission proposal required Member /states to put an obligation on VSP providers to take ‘appropriate measures’ to protect two groups of people from two groups of harms:

-          minors as regards impairment of physical, mental or moral development; and

-          all citizens (but not non-citizens – the Council suggested changing this to ‘general public’) from content containing incitement to violence or hatred in respect of certain protected characteristics (sex, race, colour, religion, descent, national or ethnic origin).

The original proposal contained a second paragraph the determined the sorts of measures that could be required by producing an exhaustive list, including terms of use, age verification and ratings and flagging systems.  A third paragraph specified that Member States were to ‘encourage’ co-regulation with the appropriateness of the measures being assessed by the national independent regulatory authority.  Significantly, Member States were precluded from imposing stricter measures, save with respect to illegal content. These conditions were expressed to be without prejudice to Articles 14 and 15 of the e-Commerce directive and to respect the conditions set down by EU law including those in the those provisions. Another theme here is the desirability of co-regulation and reliance on codes of conduct, including Union-level codes of conduct.  Another question relates to the respective roles of the NRAs, the contact committee (already established under the existing directive) and ERGA, a new body set up to provide advice.  The detail on these points lies outside the scope of this note.

Both the Council and the European Parliament have put forward amendments, the Council’s broadly tended to increase Member State’s freedom of action, the European Parliament’s emphasising freedom of expression.  Both sets of amendments raise questions about the applicability of the rules to commercial communications rules or the general commercial communication rules to VSPs.

The major point to note is the rejection of the Council of the maximum harmonisation approach – changing the Commission’s exclusive list into an indicative list and paragraph 5 now states that Member States may take more detailed or stricter measures.  It seems unlikely that the Council would accept the proposed limitation on Member State freedom – especially as it borders areas close to the core of State competence – the determination of criminal law and penalties. In a similar vein, co-regulation is to refer to the sorts of measures VSPs are to use in paragraph 2 and not the obligation to protect in paragraph 1, and the requirement to assess the appropriateness of measures entrusted to the NRA is linked to the measures taken by the VSPs to comply with the obligations imposed under para 1, not the obligations in para 1 itself.  The Council also put forward the suggestion that proportionality should take into account the size of the VSP as well as the harm that provider has caused – though presumably this should not be read as a justification for a VSP not applying measures at all.

The Council also extended the scope of the areas in which VSPs will be required to take measures- in essence linking these obligations with obligations found elsewhere in Union law – so the Combatting Terrorism Directive (EU 2017/541), child pornography as understood in Directive 2011/93/EU and racism/xenophobia as found in Framework Decision 2008/913/JHA.  In general, both the Council and the Parliament proposed extending the protected characteristics for hate crimes. In this context it should be noted that the non-discrimination provision in Article 21 of the Charter contains a list of protected characteristics and, if coherence with other elements of the law is a driver, it would make sense to match that in this provision.  The Council’s list refers back to matters which are criminalised as a requirement of EU law, but it is not expressly so limited.  If the key concern is that the public is to be protected from content the dissemination which constitutes an activity which is a criminal offence under the EU law (by reference to the relevant legal instruments), this leaves the question of where this leaves Member States with regard to speech that is criminal by reference to domestic law but not EU law derived, or even speech that is objectionable but not criminal under national law.  It is notable that there is no reference to copyright infringement (which may have fallen within the catch-all phrase found in the initial Commission draft, ‘illegal content’).

The proposals of the Council and the Parliament aim to bring commercial communications within scope.  The obligations in relations to the harms are extended to include harms caused by commercial communications and the general obligations found in Art 9(1) are to be complied with too (See Art 28(a)(1)(1a)), though a distinction is made between arrangements made by the VSPs as opposed to communications  arranged by third parties.  The rules in 9(1) deal with the identifiability of advertising as being such, as well as contain some content rules (eg respect for human dignity).  It would seem that the ability to set stricter rules could come into play here too.  The European Parliament takes a broader view as to the rules to be applied, suggesting that Articles 9 and 10 should be complied with.  Article 9(2) concerns the rules relating to “unhealthy food” and the development of codes of conduct in relation to the marketing of alcoholic beverages to children.  Article 10 concerns rules relating to sponsorship, but not product placement.  On this basis it seems that some parts of the general framing will bleed into the specific video-sharing section – the question to be resolved is how much – and how much control VSPs can be expected to have over third party content. If the point is that the requirement to be transparent about advertising forms part of the VSP terms of use, how strongly would VSP providers be expected to monitor and enforce compliance?  Further, how far would the inclusion of some provisions on advertising mean that other EU or national rules are excluded – presumably a similar approach to the question of the harmonised field as taken in de Agostini could be envisaged here.

In terms of measures to be selected, there is a question as to who much freedom VSPs would have – and in particular whether such providers would be allowed to filter/monitor all content ‘to be on the safe side’ - with an impact on all users as well as the risk of over-control.  The users’ privacy and freedom of expression are in issue, but the VSP providers presumably have some choice about how they run their business. The argument that Article 15 e-Commerce Directive precludes general monitoring does not fit well here as Article 15 is directed to the Member State; the issue refers to the VSP providers’ choice, and not what there are required to do by the State. The e-Privacy Directive does not necessarily cover this point either.  As a fall back, the balance will presumably be found through the proportionality assessment to be carried out by the NRA under Article 28a(2).

Article 28b deals with establishment of jurisdiction for the purposes of this section of the directive.  A different approach from that set out with regard to AVMS is to be adopted – that found in the e-Commerce Directive.  This emphasises the split between AVMS and the VSPs – highlighting the add-on nature of the VSP provisions to the AVMSD.  Further provisions deal with the position where there is not an establishment in the EU.  Article 28b(2) ensures that the rules in Art 28a(1) do not bite on the wrong company (e.g. the advertising unit of a company group is established in the territory, but the primary service is run from the States – a model adopted by e.g. Google and Facebook).  This has been amended by the Council to ensure broad coverage so that where a non-EU VSP provider is part of a group and any other company in the same group is established in the territory of a Member State, that Member State may have jurisdiction, with hierarchy provisions trying to deal with possible multiple claims to jurisdiction.  There are no equivalent provisions to the anti-circumvention provisions applicable to AVMS, so it is unclear how disagreements between member States as to the appropriate level and intensity of regulation are to be resolved.

Photo credit: Thaivisa

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 maker.tv? 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