The European Audiovisual Single Market

Summary: 1. Overview; 2. The current AVMS Directive; 3. Reviewing the AVMS Directive: the EU Commission proposal; 4. Conclusion.

By Giovanni De Gregorio 1.Overview The audiovisual media framework plays a fundamental role for the diffusion of cultural works and information across society. In the last few years, TV broadcasting has been the most important channel for the diffusion of audiovisual contents, but nowadays it is no longer the only one. Nowadays, the audiovisual sector allows citizens to watch their programmes not only through TV, but also through portable devices such as tablets and smartphones. Indeed, new forms of online audiovisual distribution have been developed, becoming more and more competitive. In the EU, the audiovisual industry constitutes an important sector for the Internal Market[1], and, for this reason, it is important to take into consideration the degree of competition in the audiovisual market which is traditionally represented by large companies.[2] However, the new digital technologies have contributed to the development of new business models, which have clearly impacted on the level of competition in the audiovisual market. Notwithstanding the technological development, it is necessary that the EU ensures a high level of competition in the Internal Market in order to fully benefit from its effects.

For this reason, in the framework of the second pillar of the Digital Single Market Strategy, the Commission has issued a proposal of revision of the current Audiovisual Media Service Directive (AVMSD). The audiovisual media framework will be reviewed, focusing on the adaptation of existing rules provided for in the AVMSD to new business models of content distribution. The review also deals also with the role of the different market players in the promotion of European works (TV broadcasters, on-demand audiovisual service providers, etc.), the role of video-sharing platforms and the rules on commercial communications.

The regulation of the audiovisual sector has different objectives. In particular, according to the general aim of the second pillar, the review should provide rules which are able to ensure a level playing field in order to foster competition, especially for the emerging of new audiovisual media, and ensure the independence of national media regulators. Moreover, the review should focus on the preservation of cultural diversity and, in particular, the safeguarding of media pluralism. Another area of attention is related to the protection of vulnerable subjects: it is necessary to safeguard children and consumers against racial and religious hatred included in audiovisual contents.

The current audiovisual discipline is governed by the AVMSD[3] which, since its first introduction, aims to create an EU single market for audiovisual media services by promoting cultural diversity, adequate level of consumer protection and media pluralism. However, the AVMSD sets minimum harmonisation standards, thus leaving large room of discretion for the implementation of national rules in the audiovisual sector.

Looking back at the history of the EU audiovisual sector, the EU regulatory path started in the 1980s during the growth of the satellite broadcasting services. The expansion of the US range of audiovisual services offered internationally thanks to the new satellite broadcasting technologies was one of the main drivers towards the adoption of the EU audiovisual policy.

In this path, the first relevant act was the issue of two Green Papers[4] on the establishment of a common market in broadcasting in 1984 and on the development of the Common Market for Telecommunication Services and Equipment in 1987. These documents set out the steps to follow for the creation of a competitive open information market and for the creation of a “European Television”, based on the four fundamental freedoms provided for in the Treaty of Rome. In particular, the aim was to do away with national boundaries and promote convergence in the telecommunication sector through standards, together with the provision of non-discriminatory access to telecommunication networks in order to foster the development of new audiovisual services. Moreover, the two documents highlighted other issues such as the protection of minors and the regulation of advertising.

After a number of years, the first regulatory measure was the Television without frontiers Directive (TVwF), which was issued in 1989. While the growth of the US market in the audiovisual sector was rapid, the EU faced different standards applicable in the Member States. The TVwF Directive was the basis to ensure the free movement of television services within the Community. The scope of application of the Directive covered all the forms of transmission of television programme to the public.[5] However, the TVwF Directive was a minimum harmonisation measure in fields such as protection of minors, advertising and right to reply.

In 1997, the TVwF Directive was reviewed with the aim to update the EU audiovisual regulation. In particular, the review covered the principle of jurisdiction according to which the Member State, which is responsible for TV channels, was identified by the location of the head of office and the operative office, also known as the place where programming decisions are made. Other revisions were aimed to enhance the protection of minors and the public extension of the scope of application of the Directive to major events.

However, a new digital way of communication has been developed in the last few years (e.g. video sharing platforms) and, for this reason, the regulation of TV sector only needed to be reviewed.

For this reason, in the Fourth Communication from the Commission on application of the TVwF in 2002, the Commission announced the review of the TVwF Directive. After a long legislative path, the Audiovisual Media Service Directive was adopted in 2007.^[6]

2. The current AVMS Directive

 

The AVMS Directive is based upon the principle of technological neutrality: the scope of application applies to all audiovisual contents without considering the technology used to deliver the contents, unlike the TVwF which considers only television services. In other words, the Directive applies to audiovisual contents broadcasted not only on TV, but also on cable and on the Internet. However, the Directive introduces a distinction between linear (i.e. TV broadcasts) and non-linear services (i.e. on demand). According to the Directive,[7] linear audiovisual media services are provided by a media service provider for simultaneous viewing of programmes on the basis of a programme schedule. Instead, non-linear services are defined as programmes which users select form a catalogue offered by the media service provider, to watch at their convenience. Some provisions of the Directive apply only to linear services,[8] while others apply to non-linear services.[9] However, there are general rules which are applicable to all the providers.[10] This distinction is the basis for a regulatory approach which is not uniform, but rather graduated. In particular, a twofold structure can be identified: a light regulation for non-linear services – where users enjoy more freedom to decide content, time and place of view –, and a high regulatory burden for linear services. For example, in advertising, the rules for television broadcasting are stricter due to their direct influence on society.  

Looking at the scope of application,[11] the Directive specifies the elements which define an audiovisual media service. Firstly, these services, covered by the Treaty in Articles 56 and 57 TFEU, shall be offered commercially. Secondly, the service should be offered as a programme.[12] This means that all the audiovisual materials, which play an ancillary role, are not considered as programmes covered by the scope of the Directive, such as those audiovisual materials included in the homepages of websites. Thirdly, the service shall be directed to the general public and, for this reason, it cannot be restricted to a precise cluster of individuals. Finally, the service shall be provided under the editorial responsibility[13] of a media service provider. In other words, this disposition includes both linear and non-linear audiovisual services, where the service providers control the selection and organization of the programmes. Furthermore, the Directive specifies that the scope is extended also to audiovisual commercial communication services (e.g. sponsorship).

One fundamental pillar of the AVMSD is the country of origin: providers only need to abide by the rules of one Member State, rather than multiple countries. The effects of this rule lead to the reduction of administrative burdens for providers, which shall comply only with the law of one Member State. In other words, in case of cross border activities, each audiovisual service provider is considered subject to one jurisdiction only. However, to avoid cases of absence or conflicts of jurisdiction, there are some criteria which can be applied to define the establishment of the service provider such as the location of the central administration and the location of management decisions. Furthermore, there are other ancillary criteria such as the identification of satellite uplinks and the use of the country’s satellite capacity. Member States shall ensure that those audiovisual service providers, which reside in their jurisdiction, comply with national rules which implement the AVMSD. This system also ensures the extension of the scope of the application also to non-EU programmes which, however, have an impact on EU audiences.

Another pillar of the AVMSD is the freedom of reception and retransmission.[14] Although there are some exceptions established by the Directive,[15] Member States have the obligation to ensure reception or retransmission from other Member States, provided that the broadcasts comply with the rules of the AVMSD in the country of origin. However, Member States can apply stricter rules to media service providers under their jurisdiction.[16] This possibility is subject to the condition that restrictions (e.g. stricter advertising regulation) shall be consistent with the general principles of EU law.

Furthermore, the Directive enhances the transparency of the audiovisual sector: Member States are obliged to ensure that users can have easy, direct and permanent access to the recipients of a service specific information.

The AVMSD deals also with some specific issues of the audiovisual sector. Firstly, the Directive prohibits the incitement to hatred.[17] Audiovisual services shall not contain any incitement to hatred based on race, sex, religion or nationality. There are a number of concerns on the effectiveness of this rule because many audiovisual contents include this kind of incitement. However, the ban of channel is a remedy of last resort in order to guarantee the free speech across EU, which is the basis of all democratic societies. However, Member States are required to eliminate those acts occurring in the EU territory related to hate speech channels using an EU uplink or satellite capacity.

Secondly, Member States are required to make audiovisual services accessible to people with visual or hearing disabilities.[18] Social inclusion is one the objectives of the EU, which is also taken into account by the Europe 2020 Strategy.

Thirdly, the AVMSD deals with the diffusion of major events.[19] In particular, the risk related to these events is that pay-tv or other private audiovisual services prevent people from being informed of events which are relevant for the entire society.[20] Member States therefore have the obligation to apply measures to ensure that broadcasters under their jurisdiction do not broadcast these events on an exclusive basis. In these cases, Member States shall draft a list of events which are considered relevant for society,[21] notifying the Commission of the measures taken.[22] Member States shall also ensure that broadcasters under their jurisdiction respect the lists of other Member States which notified them to the Commission, on the basis of the principle of mutual recognition, as expressed by the ECJ in the case Infront WM AG.[23]

Another area is related to the promotion and distribution of European works. The Directive specifies the definition of European Works. These works are only audiovisual contents which are originated in the Member States or in those EU third countries which are part of the European Convention of Transfrontier Television of the Council of Europe. Moreover, audiovisual contents shall fulfil three cumulative requirements in order to be qualified as European works. Firstly, European works are made by one or more producers established in one or more of those States. Secondly, the production of the works is supervised and controlled by one or more producers established in one or more of those States. Thirdly, the contribution of co-producers of those States to the total co-production costs is preponderant and the co-production is not controlled by one or more producers established outside those States. Also, co-produced works within the framework of agreements concluded between EU and third countries are considered as European works.[24] The objective pursued by the Directive is to enhance the competitiveness of EU audiovisual works, promoting cultural diversity and fostering the development of EU audiovisual industry. The Directive provides for a general obligation for Member States to promote EU audiovisual works (linear and non-linear). According to Article 13, the promotion can be supported through financial contributions and rights acquisition or by ensuring a share of European works in the programmes catalogues.[25]

Likewise, broadcasters shall reserve a majority proportion of their broadcasting schedule to the diffusion of these works,[26] while providers of non-linear services shall promote those productions in their catalogues. The Directive deals also with independent productions.[27] Broadcasters are obliged to reserve a minimum proportion of their transmission time for EU works created by independent producers. Otherwise, Member States can impose to broadcasters the allocation of at least 10% of their programme budget to independent productions, which shall also be no less than five years old.

As already explained, commercial communications[28] too are covered by the scope of the Directive which, in turn, includes different aspects related to television advertising, teleshopping, sponsorship and product placement.

In general, all commercial communications shall comply with a set of common provisions. Such communications shall be readily recognisable, not subliminal or surreptitious. They shall respect human dignity and avoid discrimination. Moreover, commercial communications shall not encourage behaviours harmful to health, safety or the environment, and shall not promote tobacco or prescription medication either. There are also general rules related to the protection of minors which will be described later.

Television advertising[29] and teleshopping[30] can be considered together. Both are subject to basic rules of the Directive, but there are specific rules which apply to each of them.[31] In particular, these types of audiovisual commercial communications shall be easily recognizable both by auditory and visual means,[32] with specific rules for teleshopping.[33] In other words, it is necessary that advertising is clearly distinguished by the editorial programmes through different techniques. Moreover, some advertisements are directly void, such as those related to prescription medication and tobacco products, while the advertising of alcoholic drinks is subject to specific rules.[34] Quantity and frequency of these types of audiovisual materials are also regulated. In general, the aim is to ensure that the integrity of the editorial programmes, taking into account natural breaks and the duration and the nature of the programme concerned, as well as the rights of the right holders, are not prejudiced. In particular, advertising and teleshopping spots shall not be more than 20% of any given hour of broadcasting time.[35]

Moreover, sponsorships[36] should be distinguished by advertising and product placements. Unlike advertising and teleshopping, the purpose of sponsorship is to promote the sponsor’s name, trademark, image, activities or products by contributing to the financing of programmes. Moreover, the sponsored programmes, unlike advertising, cannot include special promotional references. Sponsors shall influence neither the content nor the scheduling of the programme, and shall not encourage the purchase of a product or service. Sponsorship is also different from product placement. In product placement, the reference to the product is built into the action of a programme. In contrast, sponsor references can be shown during programmes, but they are not part of a plot.

Sponsors must be clearly identified at the beginning, during and/or at the end of programmes. Limitations to sponsors are also related to the promotion of medical treatments by pharmaceutical companies, sponsorship of programmes by tobacco companies, news and current affairs programmes. Finally, Member States can preclude the showing of a sponsorship logo during children’s programmes, documentaries and religious programmes.

Unlike other types of commercial communications, product placements are part of programmes.[37] The general rule is that product placement is prohibited. However, product placement is possible only in some cases provided for by the Directive.[38] These cases cover cinematographic works (including films and series), sport programmes and light entertainment programmes.[39] More generally, the derogation is possible where no payment is involved and the provision of goods and services free of charge is included in the programme. Moreover, the Directive specifies alternative conditions which shall be respected by the programme containing product placement.[40] Also in this case, the Directive specifies that programmes shall not contain product placement of tobacco products and medical treatments available on prescription.

As already seen in the previous cases, protection of minors is regulated by specific rules.[41] In particular, audiovisual commercial communications shall not cause physical or moral harm to minors, exploit their inexperience or credulity, nor encourage them to push parents to make a purchase. Moreover, commercial communications are void when are related not only to medical treatments and tobacco, but also when they encourage minors to excessive alcohol consumption. However, in this area, there is a clear tension between the protection of minors and freedom of expression.

Once again, the Directive provides for a graduated approach. For linear services, one first distinction can be drawn between contents which might seriously impair minors[42] and contents which are likely to impair minors.[43] The former type of content is prohibited. In other words, a programme cannot include content featuring pornographic images or violence. Other contents which do “not seriously” harm minors can only be transmitted when there is a possibility that minors will not normally hear or see them. These limitations are usually implemented by providing technical measures such as encryption. However, when those harmful programmes are not covered by technical measures, they shall be preceded by acoustic warnings or by means of a clearly identifiable visual symbol for the entire duration.

However, protection of minors has a lower effect in non-linear services.[44] Unlike broadcasting services, programmes which might seriously impair minors are allowed in cases where minors will not normally hear or see them. Instead, the Directive does not introduce any restriction for programmes which might “not seriously” harm minors.

Finally, the Directive obliges Member States to promote co-regulation and self-regulation.[45] Clearly, the degree of these types of regulation will depend on the legal tradition of each Member State. Furthermore, Article 9 encourages providers to write down codes of conduct[46] regarding communications accompanying or included in children’s programmes of foods high in fat, salt and sugar (HFSS).[47]

However, according to REFIT ex-post evaluation of the AVMSD, there are some areas of the audiovisual Directive to be reviewed. Although the REFIT evaluation has recognized the fundamental role of the AVMSD, such evaluation has identified five main problems, which deserve the attention of the Commission. Firstly, the country of origin principle needs to be simplified. Secondly, the evaluation recognized the insufficient level of protection for minors and consumers when watching videos on video-sharing platforms. Thirdly, there is a lack of level playing field between traditional broadcasting and on-demand services. Fourthly, rules on commercial communications should be adapted to the new challenges. Finally, national regulators should be more independent. In addition, REFIT evaluation has highlighted the differences in accessibility requirements of audiovisual media services for people with disabilities. In 2015, the Commission adopted a proposal for a European Accessibility Act,[48] which defines accessibility requirements also for audiovisual media services.

The country of origin principle[49] plays a fundamental role in the EU audiovisual market. In other words, without this principle, the entire EU audiovisual market would be subject to 28 different national jurisdictions. In this scenario, fragmentation would lead to an increase of general costs, thus making it more difficult for audiovisual service providers to offer their services across borders. Furthermore, consumers would be prejudiced due to the decrease of choices and the increase of prices. However, according to REFIT, there is the necessity to review this principle, for example, by simplifying the criteria which determine jurisdiction over providers and derogations. Indeed, notwithstanding the benefits of the country of origin principle, the rules to identify the applicable jurisdiction are still complex. One example is related to the identification of the satellite up-link used. Moreover, the rules which allow Member States to derogate from this principle are in some cases unclear. One of the main issues is the lack of a procedure for providers to exercise their right of defence in case of application of national restrictive measures.

As per the lack of sufficient protection of minors and consumers, differently from the past when the majority of audiovisual contents were provided by linear services, video-sharing platforms usually host contents which are created directly from users, and not under the editorial responsibility of the platform. Those contents, also known as User Generated Content (UGC), may contain harmful content for children such as pornographic images,[50] violent scenes,[51] and hate speech contents.[52]

Moreover, video-sharing platforms usually implement technical tools like “autoplay”, which directly expose children and consumers to harmful contents.[53] Another example is related to live contents on the Internet.[54] Although the relevance of these problems, the current AVMSD rules on protection of minors and incitement to hatred do not apply to UGC offered on video-sharing platforms since these platforms often do not control the selection of the content. Moreover, these platforms are subject to the e-commerce Directive and, for this reason, such platforms are required neither to control those contents which are uploaded by users nor to take positive action, except for the cases in which illegal contents are identified, for example, through a court order (i.e. notice and takedown approach). However, the obligation applies only for illegal contents, while harmful contents are not included, unless illegal. Although some video-sharing platforms have taken positive actions to enhance protection, such platforms assess harmful contents in different manner compared to those established in the AVMSD.[55]

The situation will be worst in the next years due to the increase in the number of online audiovisual material,[56] because audiovisual contents are capable of capturing the attention of users more than text or images.[57]

Other issues related to the protection of consumers have been identified, especially in the field of commercial communications. This is a matter covered by the Unfair Commercial Practices Directive (UCPD), which applies to misleading commercial practices, and, by other pieces of EU legislation, for example, those related to the prohibition of the advertising of tobacco products[58] and medical treatments.

The second problem identified by REFIT is the lack of level playing field for businesses. The most important limitation of the current AVMSD is related to the differences between linear and non-linear services. Nowadays, as already explained, consumers watch more audiovisual contents online.[59] The rules applied only to broadcasting services increase the burden which those services shall face, thereby hindering cultural diversity and distorting competition. This regulatory system has also led to the fragmentation of the rules related to on-demand services, which do not contribute in the same manner as broadcasting services.[60]

Furthermore, the rules on commercial communications are not adapted to the new audiovisual market dynamics. Also in this sector, there are rules which are directed only to linear services (e.g. maximum advertising time). However, as already highlighted, consumers have changed their behaviours and watch audiovisual contents through alternative sources.[61] Moreover, the lack of flexibility of rules related to sponsorship and product placement have hindered the development of these types of advertising.[62]

Finally, REFIT evaluation has recognized the need to ensure more independence to national regulatory authorities of the audiovisual sector.[63] This step is relevant for the effective enforcement of the AVMSD. The 2015 public consultation has highlighted the lack of independence of the regulatory authorities.[64] The current AVMSD does not oblige Member States to designate a national independent authority in the audiovisual sector, unlike other sectors (e.g. competition). This lack has contributed to the creation of different models of competent authorities across Member States. Independence should be ensured by political bodies and commercial interests. This is a fundamental step to increase the effectiveness of market supervision, enforcement of audiovisual rules, media freedom and pluralism. Otherwise, the risk is the “capture of the regulator”. This phenomenon consists in the subjection of the regulator to interests which are different from those which such regulator shall pursue.

Moreover, there is a risk also for competition due to the differences in which audiovisual service providers are treated. In this field, two famous cases are the Klubràdiò[65] and Liberty Global[66], where two companies sued the national competent authority of Hungary for economic prejudice resulting from unfair treatment.

In addition, the evidence seems to suggest that the degree of independence of national regulatory authorities influences the decision of establishment of audiovisual service providers in a specific Member State.[67] Finally, as expressed by different international organizations including the EU,[68] the effects of the lack of independence also affects media freedom and pluralism.[69]

For these reasons, the review of the AVMSD is necessary to adapt the audiovisual regulatory framework to the new market dynamics.

3. Reviewing the AVMS Directive: the EU Commission proposal

 

The increase of portability and convergence among devices has influenced the evolution of new consumers’ behaviours and business models. Traditional viewers of TV programmes are moving towards new forms of access to audiovisual contents through smart TVs and smartphones.[70] Moreover, today audiovisual materials are diffused also through online platforms (e.g. YouTube), which allow users to watch and upload user-generated contents. Notwithstanding these changes, TV broadcasters maintain a strong position in terms of viewership, advertising revenues and investments. Individuals continue to watch TV programmes, but new business models in the audiovisual sector are emerging. Also, traditional broadcasters are extending their activities online and new players, which offer audiovisual contents through video-on-demand and video-sharing platforms, are becoming more competitive.

The Digital Single Market strategy aims to modernize the EU audiovisual policy to address new market situations and legal challenges, considering also the fact that TV broadcasting, video on-demand and video sharing platforms are regulated by different rules.

The first step towards the review of the AVMS Directive was taken in 2013 with the issue of the Green paper titled “Preparing for a fully Converged Audio-visual world: Growth, Creation and Values.”[71]

First of all, the proposal will not repeal the AVMSD, but will amend the current Directive, without affecting other EU legal instruments.[72] In general, the proposal focuses on the characteristics of the current audiovisual market where new online operators have adopted new models for the circulation of audiovisual services. In this new audiovisual framework, the Commission aims to maintain a level playing field among the different players (regulated and not) which provide audiovisual services.

For these reasons, the aim of the proposal is to strike a right balance between competitiveness and consumer protection. As already mentioned, there are different conflicting objectives in the audiovisual sector: granting competition among audiovisual service providers, ensuring the freedom of expression, protecting vulnerable people. In particular, minors are always more exposed to audiovisual contents, especially online videos, and, for this reason, it is necessary to enhance the rules related to the protection of minors. Nevertheless, the high level of protection of minors creates more regulatory burdens on providers and reduces the level of the freedom of expression in the EU. This example shows how difficult it can be to find the right balance among different interests in the audiovisual sector.

However, the proposal does not modify the general principles of the EU audiovisual policy, but rather introduces some novelties.

The most relevant revision is related to the inclusion of video-sharing platforms in the scope of AVMSD. To achieve the objective of realizing a level playing field, the proposal has taken into account the presence of new actors, known as “over-the-top” (OTT). These new operators use the Internet to deliver audiovisual contents without being subject to the EU law provisions which regulate the audiovisual sector.

According to the proposal, video-sharing platforms are services, as defined by Article 56 and 57 TFEU, which meet some cumulative requirements. Firstly, the service shall be based on the storage of a large number of programmes or user-generated videos without the editorial responsibility of the provider. Secondly, the organization shall be determined by the provider, including automatic techniques and algorithms, by hosting, displaying, tagging or sequencing. Thirdly, the principal purpose of the service (or a dissociable section) is directed to the public in order to inform, entertain or educate.[73] Finally, the service shall be made available by electronic communications networks, according to Article 2(a) of the e-commerce Directive.

Moreover, video-sharing platforms’ liability is covered by this Directive. Briefly, the e-commerce Directive does not provide the obligation for these platforms, considered as intermediaries, to monitor contents which are hosted in their spaces.[74] This limitation of liability is the consequence of the fact that, to qualify as a hosting provider, such a provider shall not know or be in a position to control the information hosted. However, if the illegal contents are identified, such providers have the obligation to disable access or to remove them. The new proposal extends the scope of application to user-generated contents without affecting the rules of the e-commerce Directive. In other words, audiovisual hosting providers continue to be protected from liability which derives from the nature of the content stored in their platform, as established by Article 14. Furthermore, Member States continue to be bound by the rules of the e-commerce Directive. In particular, Member States cannot oblige providers to monitor contents or impose other active engagements.[75]

Likewise, there are two Articles introduced by the proposal which deal with video-sharing platform services. In particular, Article 28a establishes that video-sharing platforms are obliged to take measures in order to protect minors from those contents which may impair their physical, mental or moral development, and, EU citizens against incitement to hatred directed to a group of persons by reference to sex, race, colour, religion, descent or national or ethnic origin. The proposal specifies the meaning of “appropriate measure”. In particular, video-sharing platforms shall consider the nature of the content, the possible harm it may cause, the characteristics of the category of person to be protected, the rights and the legitimate interests of subjects involved, including those of video-sharing platforms and users, and the public interest. Furthermore, the proposal provides a list of appropriate measures.[76]

Instead, Member States are obliged to establish mechanisms to assess the degree of appropriateness of these measures through their national regulatory authorities, together with mechanisms to ensure the possibility to complain and redress related to the application of appropriate measures. However, unlike the provision of Article 4, Member States cannot impose on video-sharing platform providers measures which are stricter than those provided for by Article 28a, except for illegal contents. Also in this case, Member States shall apply the rules of the e-commerce Directive, in particular those provided by Article 14 and 15.

Furthermore, according to the proposal, the Commission and ERGA have the duty to encourage provider to exchange best practices and introduce co-regulation measures and codes of conduct[77] in order to grant effective implementation of the measures related to the elimination of hate speech and protection of minors. In particular, video-sharing platforms will be obliged to submit EU codes of conduct to the Commission.

Article 28b deals with the jurisdiction applicable to video-sharing platforms. More specifically, these platforms are considered established in one Member State if either they are established in one Member State or have a parent company or a subsidiary[78] which is established or as part of the same group of an entity established in a Member State. Also in this case, Member States are obliged to notify the Commission of the list of video-sharing platforms established in their territory.

Nevertheless, broadcasting service providers have considered the new rules as unsatisfactory due to the fact that the proposal does not establish binding rules for video-sharing platforms. The only provision, which establishes obligations, is related to the self and co-regulation which, however, only deals with the protection of minors and the prevention of hate speech. On the other hand, leaving a margin of discretion for video-sharing platforms to choose the systems to avoid the spread of harmful contents can produce positive effects due to the increase of flexibility for private actors.

According to the new text of the proposal, there seem to be three categories of audiovisual services: services providing programmes under the editorial responsibility of the service provider; video-sharing platforms hosting large amounts of programmes and user-generated videos, for which providers and users are responsible; providers offering a small amount of audiovisual content, whose legal regime is laid down by the e-commerce Directive. However, these categories shall be read in accordance with Article 28 that limits the liability of video-sharing platform also in cases which involve harmful contents for children or are related with hate speech. In other words, the only obligation applicable to video-sharing platforms is related to the breach of the rules which oblige these platforms to take appropriate measures to protect minors or prevent hate speech. In this case, the concept of editorial responsibility will constitute the parameter for the distinction of the type of services provided.

In addition, the proposal provides for a definition of user-generated contents, although limited to audiovisual contents. According to Article 1(1)(ba), user-generated videos are considered as a set of moving images with or without sound constituting an individual item that is created and/or uploaded to a video-sharing platform by users. In particular, the current AVMSD does not cover these types of content which are typically uploaded in video-sharing platforms and social networks. The only definition of user-generated contents was presented by the OECD in 2006.

Moreover, the proposal reaffirms the general principle of country of origin, as already established by AVMSD. However, exceptions to the country of origin principle have been reviewed. Unlike the current AVMSD, the proposal extends the scope of the exceptions, providing that Member States can derogate from the freedom of retransmission and reception in cases related to hate speech and protection of minors with respect of linear and non-linear services.

In other words, Member States can restrict these freedoms on their territory in cases where linear and non-linear services “manifestly, seriously and gravely” infringes the provisions relating to the prevention of hate speech or the protection of minors. Moreover, the derogation is possible also when a service creates a prejudice or risks prejudicing the public security[79] or the public health.[80]

The proposal also modifies the functioning of the derogation mechanism, thereby enhancing its effect through the obligation for Member States to notify the Commission of a list of the audiovisual service providers under their jurisdiction and the criteria used for the definition of the applicable jurisdiction. The list will be at the disposal of the national independent regulatory authority. The same obligation applies for any modification of the list. Finally, in cases in which Member States do not agree on jurisdiction, they can refer to the Commission which has the possibility to request an opinion on the matter to the ERGA within 15 working days. These obligations aim to increase the level of transparency of the audiovisual sector.

As already mentioned, the country of origin principle will apply also to video-sharing platforms which, as hosting services, are bound by the same country of origin principle provided for in the e-commerce Directive.

Moreover, according to Article 4, Member States can impose additional stricter rules on media service providers under their jurisdiction. These rules pertain to certain matters such as in the fields of commercial communications and promotion of European works. To achieve this result, the Commission encourages co-regulation and self-regulation through codes of conduct issued at national level.

However, some institutional authorities have raised critical points about the country of origin principle. The main issue is related to the home-shopping of the audiovisual service providers. In particular, such services usually choose the Member State of establishment depending on the most favourable legal regime. Once established, providers are subject to the law of that Member State and, thus, they can retransmit their programmes in the other Member States. Also in this case, the freedom of retransmission is subject to the exceptions mentioned above. However, the Commission has decided to maintain the country of origin principle due to the risks which can derive from application of the country of destination principle in terms of legal certainty.

Another issue is related to the room of discretion which Member States will enjoy in implementing the Directive in their national legal systems. Fragmentation can favour regulatory arbitrage, but some other positive effects can derive from the increase of investments in the promotion of European works.

Finally, due to the cross-border nature of online platforms, it is necessary to ensure that the EU audiovisual rules apply also to those audiovisual platforms which are not established in one Member State. This rule aims to create a level playing field to eliminate the competitive disadvantages which EU providers could face, if such providers are the only businesses which are obliged to comply with EU rules. In other words, also non-EU companies shall respect the rules related to the protection of minors and prohibition of hate speech.

Another area which has been subject to review is related to commercial communications. In particular, the aim of the review is to reduce the regulatory burden on linear service providers. (i.e. TV broadcasters). For advertising and teleshopping, the proposal modifies the general rule of proportion, providing that the daily proportion of television advertising and teleshopping within the period 7:00 and 23:00 shall not exceed the 20%. However, such rule does not apply to announcement made by broadcaster in connection with its own programmes and ancillary products directly derived from those programmes, as established by the current AVMSD, including also sponsorship announcements and product placements.

Moreover, the proposal aims to strengthen the protection of most vulnerable subjects. One example is constituted by the rule which grants more flexibility in the advertising time, notwithstanding the strict limit of the 20% of the advertising time continues to apply.[81] Therefore, flexibility is also provided for sponsorship and product placement. The proposal encourages providers to adopt self-regulation and co-regulation in order to protect vulnerable people such as minors. In particular, on one hand, sponsorship constitutes a fundamental channel of financing for audiovisual services, but, on the other hand, such commercial communications constitute an advertising technique although commercial communications cannot directly encourage the purchase of the products or services. As already provided by the current version of the AVMSD, viewers shall be informed about the existence of the sponsorship agreement. Such agreements cannot influence the independence of the audiovisual service provider.

Moreover, the proposal has eliminated the explicit ban of product placement and the derogative system which specifies the programmes where product placements can be applied. The proposal admits product placement in all audiovisual media services except for those in news and current affairs programmes, consumer affairs programmes, religious programmes and programmes with a significant children’s audience. The Commission has recognized the necessity to eliminate the general prohibition, but the system of exceptions will continue to apply, particularly for those cases in which product placement can affect children’s behaviour due to their inability to recognise the commercial content in a programme, or in consumer programmes where the honesty of the advice related to product and services is compromised by the presence of product placement.

As already expressed in the previous paragraph, according to the AVMS Directive, product placement is subject to some requirements.[82] However, the main limitation for product placement consists in the ban of the undue prominence of the products in the programme. Clearly, the value of product placement depends on the degree of prominence of the products in each transmission. For this reason, the programmes which contain product placement advertising should inform viewers of the existence of this type of commercial communication. The new proposal set only two requirements for product placement,[83]eliminating the rule related to the undue prominence of the products.

In the field of commercial communications, it is possible to argue that the proposal has taken into consideration both competition and consumer protection, increasing flexibility for all audiovisual media services, without excluding the interests of vulnerable individuals.

Likewise, European works have been involved by the review in order to enhance the diffusion of these works. This target will be achieved by allowing Member States to impose financial contributions to providers of on-demand services established in other Member States,[84] providing the inclusion of a minimum quota (20% of the audiovisual offer of their catalogues) and the obligation to give prominence to European works in catalogue of on-demand services.[85] Member States can impose this obligation also on providers of on-demand services established in other Member States which perform their services in the targeted countries. However, the financial obligation should be limited to the revenues related to the targeted audience. There are some criteria to determine the cases in which a service provider, established in another Member State, gains revenues from the audience of another Member State such as the use of advertisement directed to a specific territory or the main language of the service. However, in order to avoid double imposition, the Member State, which decides to charge the audiovisual service provider of another Member State, considers the other financial contributions imposed over the service provider.

Nevertheless, concerns about the effects of the rules introduced by the proposal on the Internal Market have been expressed by traditional audiovisual operators. In particular, broadcasters complain that the introduction of regulatory obligations related to European works can distort competition by restricting the editorial choices of the EU audiovisual industry. In particular, the decrease of competition may lead to a reduction of the incentives to innovate, directly affecting the objective of the diffusion of European works. According to the Commission, the obligation imposed is necessary to avoid that providers formally fulfil the obligation without concrete actions, leaving to European works only a residual space in their catalogue.

Another critical point consists in the possibility for Member States to impose levies on audiovisual service providers which are not established in their territory, but target their audience. In this case, the need to avoid double imposition obliges Member States, which intend to impose a levy over audiovisual service providers, to verify if other Member States have already charge those providers. Applying this principle could be not useful due to the fact that such provider will probably be charged by its country of origin without the need for further impositions by other Member States. Moreover, since the power to impose contribution belongs to each Member State, the differences in national imposition mechanisms might lead to legal uncertainty, hindering the entire EU audiovisual market.

Looking at the incitement to hatred and the protection of minors, the proposal specifies that the grounds for the prohibition of hate speech will be aligned to those of the Framework Decision on combating certain forms and expressions of racism and xenophobia[86] which prohibits incitement to violence and hatred against a group of persons or a member of such a group defined by reference to sex, race, colour, religion, descent or national or ethnic origin.

The protection of minors has been enhanced through the inclusion of video-sharing platforms in the scope of application of the proposal. The diffusion of video-sharing platforms has exposed minors to online contents which can harm their development, considering also the fact these platforms are not under the editorial control of the service provider. The proposal introduces Article 6a which obliges Member States to ensure that audiovisual service providers provide sufficient information to viewers about the contents which may cause risk for physical, mental and moral development of minors.[87] As a general rule, the most harmful content shall be subject to strong protection measures such as encryption. According to the proposal, those providers shall take appropriate measures to protect the most vulnerable people such as children. These appropriate measures will vary in the light of the nature of the provider and its involvement with the content stored.[88] Moreover, the protection of minors is encouraged by the possibility to introduce codes of conduct at EU level on audiovisual contents related to foods high in fat, salt, sugars and alcohol beverages.[89] Finally, Article 25 of the Directive 2011/93/EU will continue to apply, requiring Member States to implement measures against those websites which host and disseminate child pornography.

Furthermore, the proposal aims to increase the degree of independence of audiovisual national regulators, ensuring that these bodies are legally distinct from the industry and governments, operate in a transparent and accountable manner and have sufficient powers. Member States should ensure the independence of national authorities by providing structural independence through legal separation of entities. The independence should be also granted not only from public bodies, but also from industry in order to ensure impartiality. However, ensuring independence of the audiovisual regulators does not oblige Member States to grant the separation between regulatory authorities. In other words, Member States will be able to assign more regulatory powers to a single authority, providing that such authority is independent from public and private pressures.

The proposal defines also the role of the European Regulators Group for Audiovisual Media Services (ERGA),[90] which will play a fundamental role in shaping and preserving the audiovisual Internal Market and assessing EU co-regulatory codes. The role of the ERGA consists in ensuring the application of EU audiovisual policy. ERGA activities are directed to advise and assist the Commission in order to ensure implementation of AVMSD and facilitate cooperation among national regulatory authorities.

Finally, the proposal deals with co-regulation and self-regulation in the audiovisual sector. As the Commission has already sustained,[91] these measures are relevant for the removal of barriers in the audiovisual sector across EU. For this reason, Member States should encourage the introduction of codes of conducts which set specific targets and objectives promoting the regular, transparent and independent monitoring and the evaluation of the objectives.

4. Conclusion

 

The development of new market operators has strongly influenced the boundaries of the audiovisual market. Since the last revision of the AVMSD, the EU audiovisual market has changed. The ongoing shifting towards online services and new channels of distribution of video contents, which strongly differ from traditional broadcasting services, have raised many concerns. This is the main reason which have led the Commission to review the AVMSD. The proposal will contribute to, on one hand, enhance co-regulatory measures for the protection of minors and prevention of hate speech, and, on the other hand, it prevents the application of stricter rules, enhancing the degree of uniformity of the EU audiovisual sector.

However, notwithstanding the inclusion of video-sharing platforms in the proposal’s scope of application, these subjects will not be obliged by the same obligations which apply to linear and non-linear services, except for those related to the protection of minors and incitement to hatred. Therefore, such platforms will continue to be protected by the liability exemptions provided for by the e-commerce Directive due to the fact that their activities, although often consist in organizing contents, are not always considered subject to the editorial responsibility of the audiovisual service providers.

Il presente contributo è stato preventivamente sottoposto a referaggio affidato ad un componente del Comitato di Referee secondo il Regolamento adottato da questa Rivista.

[1] The overall size of the European audiovisual sector in 2014 was around 105.8 million euros.

[2] For more information on the impact of AVMSD on SMEs, see Annex 3 of European Commission, Commission Staff Working Document, Impact assessment accompanying the document, Proposal for a Directive of the European Parliament and of the Council amending Directive 2010/13/EU on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services in view of changing market realities, SWD(2016) 168 final, Brussels, 25.05.2016, available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52016SC0168. See also European Audiovisual Observatory, “Media ownership: towards Pan‐European groups?”, available at http://www.obs.coe.int/documents/205595/264629/Media+ownership +towards+pan-European+groups/418385fa-cf0e-4c12-b233-29476177d863.

[3] Directive 2010/13/EU.

[4] European Commission, Communication from the Commission to the Council, Green Paper on the establishment of the Common Market for Broadcasting, especially by satellite and cable, COM(84) 300 final, Brussels, 14.06.1984, available at http://aei.pitt.edu/view/eudocno/COM_=2884=29_300_final=2F

Part_2.html; European Commission, Communication from the Commission to the Council, Green Paper on the development of the Common Market for Telecommunication Services and Equipment, COM(87) 290 final, Brussels, 30.06.1987, available at http://aei.pitt.edu/1159/1/telecom_services_gp_COM_87_290.pdf.

[5] Except for communication services providing items of information or other messages on demand.

[6] Without the obligation for further implementation. The Directive was codified in 2010.

[7] Article 1(1)(e-g).

[8] Events of major importance and short news reporting (Chapter V), Quotas for promotion and distribution of European television programmes (Chapter VI), Time limits for TV advertising and teleshopping (Chapter VII), Stricter rules on the protection of minors (Chapter VIII), Right of reply (Chapter IX).

[9] Protection of minors (Article 12), General promotion and distribution of European works (Article 13).

[10] Encouraging co-regulation and self-regulatory regimes (Article 4 paragraph 7), Identifying the media service provider (Article 5), Incitement to hatred (Article 6), Accessibility for people with disabilities (Article 7), Transmission of cinematographic works (Article 8), Requirements for audiovisual commercial communications (Article 9), Sponsoring (Article 10), Product Placement (Article 11).

[11] Article 1(1)(a).

[12] According to Article 1(1)(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.

[13] According to Article 1(1)(c) “editorial responsibility” means the exercise of effective control both over the selection of the programmes and over their organisation either in a chronological schedule, in the case of television broadcasts, or in a catalogue, in the case of on-demand audiovisual media services. Editorial responsibility does not necessarily imply any legal liability under national law for the content or the services provided.

[14] Article 3.

[15] The exceptions apply differently depending on the nature of the audiovisual service. Article 3(2) specifies the exception for TV broadcasting services based upon serious violation against human dignity while the exception for on demand services are provided for by Article 3(4) justified by reasons such as public policy and health. Restrictions shall be approved by the Commission according to a specific procedure and are only allowed under exceptional circumstances.

[16] Moreover, according to Article 4, in case of disputes between countries in case of circumvention of rules, the Directive contains a two-step procedure.

[17] Article 6.

[18] Examples are sign language, subtitling, audio-description or easily understandable menu navigation.

[19] Article 14.

[20] Olympic Games, the Football World Cup or the European Football Championship, an inauguration, marriage or burial of a king, queen or head of state, or an important cultural event.

[21] According to the Directive, it shall do so in a clear and transparent manner in due time. In so doing the Member State concerned shall also determine whether these events should be available by whole or partial live coverage or, where necessary or appropriate for objective reasons in the public interest, whole or partial deferred coverage.

[22] Within a period of 3 months from the notification, the Commission shall verify that such measures are compatible with Union law and communicate them to the other Member States. It shall seek the opinion of the contact committee established pursuant to Article 29. It shall forthwith publish the measures taken in the Official Journal of the European Union and at least once a year the consolidated list of the measures taken by Member States.

[23] The case followed an action brought by Infront WM AG (previously the Kirch Group) against the list drawn up by the UK. As holder of the rights to some of the events contained in the list, Infront considered that its rights had been breached. The object of the proceedings was a letter from the Commission, informing the relevant British authorities that it had no objections to the measures notified and would therefore proceed to publish them. The Court found that this letter was open to an action because, by triggering the mechanism of mutual recognition, it had binding legal effects. The Court annulled the decision on the grounds that the Commission lacked the necessary power. The College of Commissioners had not been consulted and the Director-General, who signed the decision, had received no specific power from the College. Since the action was upheld on the grounds of procedural infringements, the judgment does not comment on the material legitimacy of measures taken by the Commission under Art. 3a or of list regulations adopted by Member States.

[24] Article 1(4) specifies that productions which are not European works but are made in the framework of bilateral co-production agreements concluded between Member States and third countries will be treated as European works provided that the EU co-producers supply a majority share of the production costs and the production is not controlled by the producer from the third country.

[25] For on-demand services, Member States have implemented different approaches. See European Commission, “Promotion of European works in practice”, available at https://ec.europa.eu/digital-single-market/news/promotion-european-works-practice.

[26] According to Article 16, the time appointed to news, sports events, games, advertising, teletext services and teleshopping, shall not be considered.

[27] Article 17.

[28] According to Article 1(1)(h), “Audiovisual commercial communication” means images with or without sound which are designed to promote, directly or indirectly, the goods, services or image of a natural or legal entity pursuing an economic activity. Such images accompany or are included in a programme in return for payment or for similar consideration or for self-promotional purposes. Forms of audiovisual commercial communication include, inter alia, television advertising, sponsorship, teleshopping and product placement.

[29] Article 1(1)(i)”television advertising” means any form of announcement broadcast whether in return for payment or for similar consideration or broadcast for self-promotional purposes by a public or private undertaking or natural person in connection with a trade, business, craft or profession in order to promote the supply of goods or services, including immovable property, rights and obligations, in return for payment.

[30] Article 1(1)(l) “teleshopping” means direct offers broadcast to the public with a view to the supply of goods or services, including immovable property, rights and obligations, in return for payment.

[31] Article 19-26.

[32] Without prejudice to the use of new advertising techniques.

[33] For example, Article 24 establishes that teleshopping windows shall be clearly identified as such by optical and acoustic means and shall be of a minimum uninterrupted duration of 15 minutes.

[34] Article 22 provides that television advertising and teleshopping for alcoholic beverages shall comply with the following criteria: a) it may not be aimed specifically at minors or, in particular, depict minors consuming these beverages; b) it shall not link the consumption of alcohol to enhanced physical performance or to driving; c) it shall not create the impression that the consumption of alcohol contributes towards social or sexual success; d) it shall not claim that alcohol has therapeutic qualities or that it is a stimulant, a sedative or a means of resolving personal conflicts; e) it shall not encourage immoderate consumption of alcohol or present abstinence or moderation in a negative light; f) it shall not place emphasis on high alcoholic content as being a positive quality of the beverages.

[35] There is an exception related to broadcasters’ announcements about their own programmes or ancillary products derived from them public service messages and charity appeals broadcast free of charge.

[36] Article 1(1)(k) “Sponsorship” means any contribution made by public or private undertakings or natural persons not engaged in providing audiovisual media services or in the production of audiovisual works, to the financing of audiovisual media services or programmes with a view to promoting their name, trade mark, image, activities or products.

[37] Article 1(1)(m) “Product placement” means any form of audiovisual commercial communication consisting of the inclusion of or reference to a product, a service or the trade mark thereof so that it is featured within a programme, in return for payment or for similar consideration.

[38] Article 11(2).

[39] However, this derogation does not apply to children programmes, according to Article 11(2)(c).

[40] In particular, these conditions are: a) their content and, in the case of television broadcasting, their scheduling shall in no circumstances be influenced in such a way as to affect the responsibility and editorial independence of the media service provider; b) they shall not directly encourage the purchase or rental of goods or services, in particular by making special promotional references to those goods or services; c) they shall not give undue prominence to the product in question; d) viewers shall be clearly informed of the existence of product placement. Programmes containing product placement shall be appropriately identified at the start and the end of the programme, and when a programme resumes after an advertising break, in order to avoid any confusion on the part of the viewer. Nevertheless, Member States can waive the requirements set out in point (d) if the programme in question has neither been produced nor commissioned by the media service provider itself or a company affiliated to the media service provider.

[41] There are also other rules which are enshrined in the 1998 Recommendation and 2006 Recommendation on the protection of minors and human dignity and a specific communication on video games.

[42] Article 27(1).

[43] Article 27(2)(3).

[44] Article 12.

[45] Article 4(7).

[46] The term “codes of conduct” refers to voluntary rules (self-regulation) set by the audiovisual media service providers themselves or in cooperation with other sectors (e.g. food, advertising industry).

[47] The codes of conduct should cover audiovisual commercial communications of food and beverages containing nutrients and substances with a nutritional or physiological effect such as those which contain fat, tarns-fatty acids, salt or sodium and sugars, excessive intakes of which in the overall diet are not recommended. According to Regulation 1924/2006, these are defined as HFSS food.

[48] European Commission, Proposal for a Directive of the European Parliament and the Council on the approximation of the law regulations and administrative provisions of the Member States as regards the accessibility requirements for products and services, COM(2015) 615, Brussels, 02.12.2015, available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52015PC0615.

[49] Until 2013, 5141 TV channels (no local and windows) were established in the EU. Almost 2000 targeted foreign markets. This share has increased from 28% in 2009 to 38% in 2013. In 2015, 31% of the VoD services are established in another EU country.

[50] In the UK, the Authority for Television On Demand (ATVOD) found that at least 44,000 primary school children accessed an adult website in one month. ATVOD has found that 23 of the top 25 adult websites visited by UK Internet users provide instant, free and unrestricted access to hardcore pornographic videos.

[51] For example, 32% of children mention video-sharing sites such as YouTube as linked to these risks. Then, there are other websites (29%), social networks (13%) and games (10%). See London School of Economics, “EU kids On line”, available at http://www.lse.ac.uk/media@lse/research/EUKidsOnline/EU

%20Kids%20Online%20reports.aspx.

[52] The Fundamental Rights Agency has reported an increase in anti-Semitic incidents online in Member States. European Union Agency for Fundamental Rights (FRA), “Anti-Semitism: Overview of data available in the European Union 2004–2014”, available at http://fra.europa.eu/en/publication/2015

/antisemitism-overview-data-available-european-union-2004-2014. In Italy, the Observatory of Contemporary Anti-Jewish Prejudice has recorded incidents of anti-Semitism with a particular focus on the Internet. In the UK, The Community Security Trust recorded 233 anti-Semitic incidents that involved the use of Internet-based social media in 2014 (20 % of the 1,168 incidents), compared with 88 in 2013 and 81 in 2012 “threats”.

[53] In 2015, the video of two US journalists being murdered during a live broadcast spread quickly online. When the video was taken down after 10/15 minutes, it had already been shared 500 times on Facebook. Due to the Autoplay feature, many users saw the video unwillingly in their news feed. Since the feature debuted on Twitter in June 2015, many people reported that it auto-played all videos, including exceptionally violent ones See R. Meyer, “When a Snuff Film Becomes Unavoidable”, available at http://www.theatlantic.com/technology/archive/2015/08/snuff-film-unavoidable-twitter-facebook-autoplay-roanoke/402430/.

[54] For example, Periscope’s videos are embedded into Tweets.

[55] For example, YouTube has removed a video of a woman being forced by her husband to walk naked in the street for violation of YouTube’s Community guidelines. The same video still appears on the website Liveleak.com. See T. Burrows, “Outrage as NYC man forces wife to walk naked in street ‘after catching her sending nude pictures to other men”, available at http://www.dailymail.co.uk/news/article-3406525/Outrage-man-forces-wife-walk-naked-street-catching-sending-nude-pictures-men.html.

[56] In 2014, online audiovisual contents consisted for 64% of total consumer Internet traffic. This rate is expected to increase up to 80% by 2019, see Cisco, “White paper: Cisco VNI Forecast and Methodology, 2015-2020”, available at http://www.cisco.com/c/en/us/solutions/collateral/service-provider/ip-ngn-ip-next-generation-network/white_paper_c11-481360.pdf). Moreover, the consumption of videos uploaded in video- sharing platforms is increasing. For example, 400 hours of videos are uploaded every minute on YouTube, equivalent to 24,000 days’ worth of content uploaded every minute and 65.7 years’ worth of content uploaded every day, see B. Brouwer, “Youtube now gets over 400 hours of content uploaded every minutes”, available at http://www.tubefilter.com/2015/07/26/youtube-400-hours-content-every-minute. Furthermore, online videos are one of the main Internet activities carried out by children. For example, in the UK in 2014 children aged 12-15 spend more time online than watching television (17.2 vs. 15.7 hours per week), see Ofcom, “Children and parents: media use and attitudes report 2014” https://www.ofcom.org.uk/research-and-data/media-literacy-research/research-publications/childrens/

children-parents-oct-

[57] In the 2015 public consultation on audiovisual sector, most consumer organisations considered the current rules unadapt to ensure due to the lack of inclusion of video sharing platforms in the scope of application of AVMSD. The same consideration was expressed by Member States and ERGA.

[58] Directive 2003/33/EC of the European Parliament and of the Council of 26 May 2003 on the approximation of the laws, regulations and administrative provisions of the Member States relating to the advertising and sponsorship of tobacco products prohibits advertising and sponsorship for cigarettes and other tobacco products in printed media, information society services and radio broadcasting; Directive 2014/40/EU of the European Parliament and of the Council of 3 April 2014 concerning the manufacture, presentation and sale of tobacco provides that audiovisual commercial communications are prohibited for electronic cigarettes and refill containers.

[59] In the EU, the total on-demand consumer revenues increased from about 919 million euros in 2010 to 2.5 billion in 2014.

[60] The investment of TV groups in original programmes in 15 countries amounted to 15.6 billion euros in 2013, which is about the 24% of TV broadcasters’ revenues (65 billion). On the other hand, on-demand service providers contribute minimally to the production and the promotion of EU works (only 10 million euros in original content which is less than 1% of their total revenues, 1.5 billion euro).

[61] For example, in the US where there are no limitations in this field, viewers, turned to other video offers (e.g. video on-demand), modifying indirectly the behaviour of TV broadcasters which were forced to decrease the amount of advertising. See G. Mathieu, “Etats-Unis: et maintenant, moins de coupures de publicité”, available at http://television.telerama.fr/television/etats-unis-et-maintenant-moins-de-coupures-de-publicite,138319.php; J. Lynch, “In dramatic Overhaul, TNT to cut Ad load by 50%”, available at http://www.adweek.com/news/television/turners-chief-creative-cutting-tnt-ad-loads-50-percent-dramatic-overhaul-168893; B. Steinberg, “Viacom to cut back on primetime TV Ads starting in October”, available at http://variety.com/2015/tv/news/viacom-primetime-tv-advertising-cuts-1201598646/.

[62] In the US, there is no material regulation of product placement. This type of advertising represents almost 5% of the TV advertising market. In the UK, it represents a share of only 0.1%. For other information see the Ofcom reply to the survey on cost and benefits of the AVMSD.

[63] For a specific overview see the Annex 12 of the accompanying document to the AVMSD review.

[64] In particular, the following regulators were considered as not independent: AGCOM, BE CSA, ES CNMC, FR CSA, PL KRRiT, SK RVR and also ADR GVK, VS and WDR, Media Commission Iceland.

[65] In this case, the National Media and Infocommunications Authority (NMHH) refused to renew a license for the use of frequencies for Klubrádió, one of the few remaining radio stations opposing the government. The office did not execute the legally binding judgment of the court obliging it to grant the frequencies. Klubrádió sued NMHH for the lost advertising income alleging that there was causation between the breach of law of NMHH and the fall in their advertising revenues. The case is still pending. See Z. Zsebesi, “Nervous moves on the Hungarian media market”, available at http://www.financialobserver.eu/ce/nervous-moves-on-the-hungarian-media-market/.

[66] Case C-475/12.

[67] Survey and data gathering to support the Impact Assessment of a possible new legislative proposal concerning Directive 2010/13/EU (AVMSD) and in particular the provisions on media freedom, public interest and access for disabled people.

[68] See Weber Report at http://www.europarl.europa.eu/sides/getDoc.do?type =TA&reference=P7-TA-2013-0203&language=EN&ring=A7-2013-0117 and Tavares Report at http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT +REPORT+A7-2013 0229+0+DOC+XML+V0//en. See also Organisation for Economic Co-operation and Development (OECD) press release, “Revised Hungarian media legislation continues to severely limit media pluralism, says OSCE media freedom representative”, available at http://www.osce.org/fom/90823; Organisation for Economic Co-operation and Development (OECD) video, “The threats to free media, the dangers of impunity”, available at http://www.osce.org/fom/74687.

[69] European Council, Culture Council Conclusions, Council conclusions and of the representatives of the Governments of the Member States, meeting within the Council, on media freedom and pluralism in the digital environment, Brussels 26.11.2013, available at http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/educ/139725.pdf.

[70] More than 70% of mobile subscription will be for smartphone by 2020, Ericsson, “Ericsson Mobility Report: 70 percent of world’s population using smartphones by 2020”, available at https://www.ericsson.com/news/1925907.

[71] European Commission, Communication from the Commission, Green Paper. Preparing for a Fully Converged Audiovisual World: Growth, Creation and Values, COM(2013) 231 final, Brussels, 24.4.2013, available at http://ec.europa.eu/ transparency/regdoc/rep/1/2013/EN/1-2013-231-EN-F1-1.Pdf.

[72] This proposal does not conflict with other existing EU law which remain applicable, in particular the e-Commerce Directive 2000/31/EC, Directive 2003/33/EC on advertising and sponsorship of tobacco products, Directive 2005/29/EC on unfair commercial practices and Directive 2011/93/EU on combating the sexual abuse and sexual exploitation of children and child pornography. Moreover, as already mentioned, the Commission issue a proposal for a European Accessibility Act. For this reason, the revision of the AVMSD does not address the issue of accessibility.

[73] This requirement includes also services whose audiovisual contents can be divided from the main activity of the service provider (e.g. user-generated videos where those parts can be considered dissociable from their main activity).

[74] According to Article 15, Member States cannot impose a general obligation to monitor or to engage in active fact-finding indicating illegal activity.

[75] This prohibition does not preclude the possibility to provide monitoring requirements in some particular situation (Article 15).

[76] In particular: (a) defining and applying in the terms and conditions of the video-sharing platform providers the concepts of incitement to violence or hatred as referred to in point (b) of paragraph 1 and of content which may impair the physical, mental or moral development of minors, in accordance with Articles 6 and 12 respectively; (b) establishing and operating mechanisms for users of video-sharing platforms to report or flag to the video-sharing platform provider concerned the content referred to in paragraph 1 stored on its platform; (c) establishing and operating age verification systems for users of video-sharing platforms with respect to content which may impair the physical, mental or moral development of minors; (d) establishing and operating systems allowing users of video-sharing platforms to rate the content referred to in paragraph 1; (e) providing for parental control systems with respect to content which may impair the physical, mental or moral development of minors; (f) establishing and operating systems through which providers of video-sharing platforms explain to users of video-sharing platforms what effect has been given to the reporting and flagging referred to in point (b). However, it is not clear if the list is exhaustive.

[77] Such measures have already been implemented through co-regulation by some of the leading it companies (Facebook, Twitter, YouTube and Microsoft) by the adoption of a Code of conduct on illegal online hate speech. See more at B. ZAMBARDINO, M. SARDELLI, M. BASSINI, “AVMSD Refit or Reform? Audio Visual Media Services in the Digital Era”, 2016, available at http://www.medialaws.eu/avmsd-refit-or-reform-audio-visual-media-services-in-the-digital-era/.

[78] In case of more subsidiaries, established in different Member States, or other entities of the group each of which are established in different Member States, the Member States concerned shall ensure that the provider designates which of these Member States shall be deemed as the place of establishment.

[79] Article 3(2)(b).

[80] Article 3(2)(c).

[81] However, according to Recital 20, many broadcasters are part of larger media groups. The transmission time of the announcements made by the broadcaster in connection with programmes from other entities belonging to the same media group should not be included in the maximum amount of daily transmission time that may be allotted to advertising and teleshopping.

[82] See note 40.

[83] Product placement contents and, in the case of television broadcasting, scheduling shall not impact neither affect the responsibility and editorial independence of the media service provider nor directly encourage the purchase or rental of goods and services.

[84] But only on the turnover generated in the imposing country.

[85] These rules do not apply to SMEs from these rules. Low turnover companies, thematic services and small and micro enterprises are exempted from these requirements.

[86] Decision 2008/913/JHA.

[87] Article 6b of the proposal introduces a new provision that establishes an obligation for audiovisual media service providers to provide information to viewers about content which may impair the physical, mental or moral development of minors. For this purpose, Member States may use a system of descriptors indicating the nature of the content of an audiovisual media service.

[88] Also in this case, the requirements should apply without prejudice to Article 14 and 15 of e-commerce Directive.

[89] Article 9(2,4).

[90] ERGA was established by Commission Decision of 3 February 2014, C(2014) 462 final.

[91] The Commission stressed that when considering policy solutions, it will consider both regulatory and well-designed non-regulatory means, modelled on the Community of practice and the Principles for Better Self-and Co-regulation. See COM(2015) 215 final and The Community of Practice for better self- and co-regulation at https://ec.europa.eu/digital-single-market/communities/better-self-and-co-regulation