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 EPC Members' Newsletter: March 2002

 

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NEWSLETTER 108 CONTENTS
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DATES FOR YOUR DIARY

KEY ISSUES FOR MARCH 2002

WHAT'S NEW?

1. Electronic Commerce
1.1 B2B Trustmark Consultation
1.2
Consumer confidence
1.3 Ecommerce Directive
1.4 Mcommerce
1.5 Amazon v Barnes & Noble
1.6 Internet penetration
2. Internet Regulation (content)
2.1 AOL must pay VAT
2.2 .eu domain name officially adopted
2.3 Labelling of video games
2.4 Safer Internet action plan
2.5 Disabled internet access
2.6 Cybercrime
3. Copyright
3.1 WIPO copyright
3.2 Copyright study
3.3 Digital Rights Management Workshop
3.4 WIPO news
4. Advertising
4.1 DG SANCO Opinion on Commercial Practices Aimed at Children
4.2 British advertising spending down
5. Audiovisual and General Media Policy
5.1 Council Resolution on the audiovisual sector
5.2 Digital broadcasting studies
5.3 Australia moves on media ownership
6. General
6.1 Results of the Barcelona Summit
6.2 Council Commitment to Internal Market for Services
6.3 Commission/DTI Workshop on Internal Market for Services

UPCOMING EVENTS


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DIARY DATES
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03 April ­ "Information session" on Cookies, EP, Brussels
15 April ­ Hearing on the proposed Tobacco Advertising Directive, European Parliament
23-24 April ­ Digital TV Regulation & Competition Law Vision in Business, Brussels
16-17 May ­ Fourth Annual TV Meets the Web Seminar
23-24 May ­ EPC seminar on Public Service Broadcasting, Madrid
06-07 June ­ European Business Summit, European Services Forum, Brussels
16-18 June ­ EU Copyright Conference, Santiago, Spain

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KEY ISSUES FOR MARCH 2002
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Cookies

The EPC has been actively fighting for a better solution to the cookie problem. We¹ve been in touch with the Liikanen cabinet, with Commission officials, Member State representatives and MEPs. The subject of Cookies was debated again in Parliament this month and we¹ve been alerting MEPs to the massive costs faced by industry if website owners are required to tell their users about the use of cookies "in advance" of them being served. Mr Cappato, the Rapporteur, tabled no amendments to the Common Position given by the Council at its last meeting and even suggested that the cookies section of the Data Protection Directive be dropped if the Commission, Council and Parliament cannot agree on its wording. EPC would, of course, support a deletion as this was our original suggestion during first reading. However, the Commission is at this stage unwilling to see the removal of all references to cookies so we continue to fight for more sensible wording.

The main obstacle to agreement is the Œin advance¹ wording contained in the section on cookies. Under this rule websites and service providers would be required to inform customers in advance that a cookie was being placed and get their permission for this to happen. Industry and a number of MEPs have argued that this is unworkable and would create huge problems for enforcement.

MEP Michael Cashman stressed that there were different types of cookies and not all of them carry personal identification details.

Mr Cappato suggested that the differentiation between cookies which carry personal identification details and those which do not could be a way to address the problem of advance notification if it is legally possible. Outside the meeting the rapporteur was heard to invite MEPs to send in "radical" proposals for draft amendments which differentiate between cookies.

This could be a way to agreement with both the Council and the Commission who continue to support the 'in advance' wording of the draft Directive.

Deadline for amendments to the report is 09 April 2002. The Parliament will debate the report in plenary during the week commencing 13 May 2002.

Market Abuse

The European Parliament¹s first reading on the Market Abuse Directive took place on 14 March 2002. The adopted text is an improvement on the original Commission proposal in that it builds in certain safeguards and key defences for journalists accused of market manipulation. However, it does not as far as moving to an intent-based regime so EPC is actively seeking the support of the Council for the Parliament¹s new wording. Our earlier concerns with the article aimed at requiring disclosure by financial analysts remain, as it could be extended to cover any journalistic reporting of newsworthy research or other relevant information. EPC is raising this again with Council representatives and Commission officials as it seems that some countries would in fact favour disclosure by journalists being covered in this directive.

Along with other media organisations the European Publishers Council has written to the Council and Commission stressing its concerns about the potentially damaging impact of the Directive without the changes agreed by MEPs. The Council has hinted that it does not wish to accept the more progressive amendments and it will now need to confirm its opinion on the Parliament¹s text before it returns for a second reading. EPC is arranging a meeting with the Commission to discuss this in early April 2002 and EPC members who are interested in attending should contact Angela Mills.

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WHAT'S NEW?
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1. Electronic commerce

1.1 Trustmark Consultation
The Commission is to has launched a consultation on the area of B2B trustmarks. This consultation is the follow-up to the eEconomy Communication which identified the need to promote fair trade in B2B by encouraging self-regulatory systems. DG Enterprise has produced a questionnaire in order that it can receive the input of all concerned for its study which explores the most appropriate ways to promote good business practice in this area. Views on the most important trust barriers, the role of self-regulation and codes of conduct are sought. At the end of the study a group of stakeholders will be convened to examine a way forward. This study comes at a time when B2B eCommerce is growing worldwide. This growth is expected to continue until at least 2004. The link to the questionnaire can be found below. Questions to be completed by e-marketplace operators.

1.2 Consumer confidence
Following the change in the Brussels Convention through the introduction of the Brussels Regulation ­ in force since 01 March 2002, consumers are now in a position to have a cross-border, eCommerce dispute heard in their own country. It will be interesting to see if this brings about a great change in the level of confidence consumers have about how their rights are protected and if they seek to enforce them through the Courts. A DG SANCO survey has discovered that consumers are less confident about cross-border shopping and feel better protected if they shop in their own country. The report also shows that there is a high level of confidence by consumers in their consumer associations and that they will use them as their first point of contact in the event of a dispute. The level of trust in associations is higher than the level of trust in government. Consumers in the North of Europe are more confident that their rights will be protected than those in the South. Consumers in Greece, Italy and Portugal went so far as to say that their rights would be better protected in a State other than their own.

1.3 Ecommerce Directive
Luxembourg, Austria and Germany are the only countries in the EU to have implemented the Ecommerce Directive. All Member States should have implemented the Directive before 17 January 2002. Six EU countries (Finland, France, Denmark, Spain, Belgium and Sweden) have draft laws in place which have been notified to the European Commission. Four countries have draft laws in place which have not yet been notified to the Commission: Ireland, Greece, The Netherlands and Portugal. The two countries furthest from compliance are the UK and Italy who have no draft laws in place. The DTI in the UK announced a consultation on Directive last week, which puts the UK slightly further along the road to implementation.

1.4 Mcommerce
A leading British online travel-and-leisure site, lastminute.com, has formed a strategic partnership with Orange UK. Under the terms of the partnership, the two will work together to develop mobile retail software that will bring lastminute.com's services to Orange UK's 12 million British users. Lastminute.com and Orange are confident that they can provide a profitable service using new technology which means that customers can not only browse lastminute.com's website but also purchase services from the company.

1.5 Amazon v Barnes & Noble
Amazon.com and rival book seller Barnes & Noble.com have settled what was the internet's highest profile patent dispute, according to media reports. The dispute was over Amazon.com¹s 1-Click patent which allows its customers to make repeat purchases at the site with just one mouse click. It is argued that the patent gives the company an unfair monopoly on something which is standard technology. If Amazon is allowed to claim a patent on this practice, other websites must make their shopping systems deliberately less efficient to avoid infringement, which stifles ecommerce. Those who have been following the case will be disappointed that the companies have settled, as judicial guidance on this area would have been useful to all concerned.

1.6 Internet penetration
Domestic access to internet is increasing worldwide. Close to 0.5 billion homes now have an internet connection. Interestingly, in Europe most homes with internet connections were headed by a male educated to university degree level. Southern Europe still has a lower take-up rate but this is increasing- most notably in richer areas of Southern Europe. ADSL is also becoming a more widespread means of connection to the internet due to discounts being offered to customers by service providers. In business, the UK and US lead the field in use of internet applications across all areas of their business, most notably in marketing. Other European countries and Japan were found to prefer more traditional ways of selling themselves. .

2. Internet regulation (content)

2.1 AOL must pay VAT
The terms of the VAT and Ecommerce Directive (to be formally adopted shortly) mean that AOL will now be subject to VAT even though it does not provide its service from within the EU. Under the provisions of the revised Directive, content provision will be subject to VAT not by reference to the location of the supplier but by reference to the location of the consumer. Freeserve has called upon the UK Government to implement the changes before July 2003 as EU ISPs are at a disadvantage compared to their non-EU counterparts.

2.2 .eu domain name officially adopted
The Telecoms Council officially adopted the top level domain.eu on Monday 25 March 2002. The Commission must now choose a registry to oversee the domain. Parliament and the Council originally disagreed on how to choose the registry. The Council wanted tougher procedures, including a regulatory committee that would have to vote on all stages of the process. The two sides recently agreed to a compromise, with a regulatory committee for the early stages and a more informal advisory committee for the final steps. After a registry has been chosen the delegation of the .eu to the registry will have to be organised with ICANN ­ the internet¹s authority for assigning web addresses. Speaking about the adoption of the domain name Commissioner Liikanen stated, "It will provide additional choice for European businesses and citizens and will accelerate the uptake of ecommerce."

2.3 Labelling of video games
The Council published a Resolution in the Official Journal on 15 March 2023 detailing the actions it wants the Commission and Member States to take to improve labelling standards for video games. The Commission, Member States and industry are encouraged to continue working together to ensure parents are well aware of the content of games children are playing. The Council congratulated the successes experienced thus far and encouraged more cooperation to further improve the labelling of games. A full copy of the Resolution is available on request.

2.4 Safer Internet action plan
The Commission plans to extend its Safer Internet Action Plan. The current plan¹s aim is to create a safer environment by setting up a network of hotlines in Europe and by encouraging self-regulation. Industry is encouraged to develop content filtering and rating systems and trans-national awareness plans. The extension of the plan will have an additional budget of Eu13.3 million (the budget of the initial Action Plan was Eu25 million). In addition to the aims of the original plan, the extension will include a self-regulation forum for all actors, including candidate countries. It will cover different types of illegal content or conduct, including racist material. The protection of minors from unknown paedophiles will also be one of the main aims. The possibility of developing dedicated safe sites for children was also mooted as a future action. This comes at a time when proposals for a .kids top-level domain name is being suggested in the US. Sites with the domain name .kids would be monitored to ensure that content was suitable for under 13s.

2.5 Disabled internet access
On Monday 25 March 2023 the Telecoms Council approved a resolution to help improve access to the internet for disabled people. The initiative forms part of the eEurope plan. Member States are to be encouraged to use the latest technologies to improve access to the web for disabled citizen. The website eEurope will give a regular update of progress made by Member States in improving disabled access to government websites at national, regional and local level. As 2003 has been designated the Year of the Disabled, the Council is calling on all Member States to make all websites (public and private) totally accessible to their disabled citizens.

2.6 Cybercrime
A recent European Policy Centre lunchtime meeting discussed the issue of cybercrime. The issues of constantly changing technology and no common forum for the discussion of the problem were given as some of the obstacles to be surmounted in the control of online crime. Public-private partnership was described as the best way of combating cybercrime. Governments rely on private companies to develop the software that keeps them one step ahead of cyber criminals and private companies depend on governments to fund law enforcement efforts and impose heavier penalties on the perpetrators of cybercrime. Delegates were optimistic that this form of partnership would help to make the internet more secure.

3. Copyright

3.1 WIPO copyright
The international treaty to enforce copyright protection over the internet (see last month's EPC newsletter) is drawing fire from civil liberty advocates. The copyright treaty was designed by the World Intellectual Property Organisation and comes into effect in March. The treaty makes it illegal to bypass security programs that protect copyrighted material (such as encryption) and aims to make sure royalties are paid. The European Union is expected to ratify the treaty, together with its 15 Member States, after each individual country has passed legislation on it but some aspects of the treaty have already provoked a storm of freedom of expression legal challenges across the US.

3.2 Copyright study
Brussels has published a call to tender for a study on "The contribution of copyright and related rights to the European economy". The contractor will produce a study which gives a reflection of "current economic thinking on the future of the information society and the media sector". The emergence of new technologies in the sector and their effect on copyright will also be examined.

3.3 Digital Rights Management Workshop
The Commission has hosted a workshop on the management of digital rights. The promotion of open, flexible and interoperable digital rights management systems was discussed by representatives of all the industries affected by this issue. EPC was in attendance and a full report of the proceedings is available on request. CEN is now preparing a paper on digital rights management which is expected to be completed by June. The next CEN meeting will be on 23-24 May 2002.

3.4 WIPO news
This month WIPO has reported on its continuing effort to combat cybersquatting, the practice of hijacking a domain name already in use. The addition of several new top level domain names to the list available has meant that cybersquatters now have even greater opportunity to operate The level of piracy for names ending in .com, .net and .org saw a modest decline in 2001, largely due to WIPOs online dispute resolution policy. Assistant DG of WIPO Mr Francis Curry was pleased with the news of the decline in piracy for certain TLDs but warned against complacency. Further information on cybersquatting and how to deal with the problem is available on request. The next meeting of the Standing Committee on Copyright and Related Rights is from May 13-17 2002.

4. Advertising

4.1 DG SANCO Opinion on Commercial Practices Aimed at Children
The DG SANCO Consultative Committee on Commercial Practices Aimed at Children reported its findings this month. Unfortunately for the Committee, which has been investigating this subject since 1999, all its hard work has been to no avail since DG SANCO will not be converting any of the findings into legislative proposals. According to DG SANCO, the Committee¹s opinion does not form part of the current Commission strategy. The Committee had serious concerns about methods of advertising to children. Advertising to children was seen to have proliferated in the last few years. It was felt that this proliferation would continue rapidly due to emerging technologies. Codes of conduct developed by the sector were felt to have little effect. A blend of legislation and self-regulation was recommended by the Committee. A matter for concern for industry could be that some of the ideas expressed in the report seem to reflect those expressed in green paper on Duty to Trade Fairly. EPC will monitor developments closely. A copy of the report is available on request.

4.2 British advertising spending down
National newspapers have seen a sharp drop in advertising spending in the fourth quarter. A study by the World Advertising Research Centre showed that spending by advertisers in the United Kingdom dropped by 6.9 percent, compared to the same period in 2000, but spending for national newspaper advertising dropped by 17.5 percent. Spending on advertising in the tabloid press was down 13 percent while spending on broadsheet newspapers fell considerably by 27 percent. Advertising in national newspapers was down 8 percent for the year.

5. Audiovisual & General Media Policy

5.1 Council Resolution on the audiovisual sector
The Council Resolution on the development of the audiovisual sector was published in the Official Journal this month. The resolution stresses the need to maintain cultural and linguistic diversity in the audiovisual sector. The Commission is called upon to promote discussions between the authorities and industry ways of maintaining and increasing cultural diversity. The Resolution calls on the Member States to look to ratify the Council of Europe Convention on audiovisual heritage protection as soon as possible. A full copy of the resolution and the convention is available on request.

5.2 Digital broadcasting studies
Two contracts for new studies have been awarded by the Commission on digital broadcasting services. ''Interoperability, service diversity and business models in digital broadcasting'' will investigate the economic issues relating to interoperability in digital broadcasting. The Commission will use the results to guide its industry led approach to standardization and interoperability in digital broadcasting. The study will also investigate how business models affect the range of services offered in digital broadcasting. The study "general interest obligations relating to broadcasting in the new regulatory framework for electronic communications services and networks,'' will examine the implementation of general interest requirements associated with broadcasting. In particular, the conditions that may be connected with radio-frequency rights of use, broadcasting regulations and requirements imposed on operators in respect of conditional-access systems and access to other related resources will be examined. The study will draw on the experience of those Member States where some of these measures are already being applied. The economic impact of general interest requirements have will also be examined. The Commission will use the results of this study to make recommendations about how each general-interest requirement is to be implemented in the most appropriate manner.

5.3 Australia moves on media ownership
A bill designed to allow foreign ownership of Australian newspapers and television networks has been introduced to parliament. The bill will also scrap cross-media ownership rules. Under cross-media laws, newspaper, radio and television companies in the same city are limited to holding 15 percent stakes in each other. Under the terms of the new bill these will be lifted, subject to a "separate newsrooms" test administered by the Australian Broadcasting Authority. Foreign ownership restrictions limit foreign companies from controlling more than 15 percent of an Australian television company and 25 percent of a newspaper. Many of the world's media companies have begun to show interest in Australian concerns in anticipation of the new bill becoming law.

6. General

6.1 Results of the Barcelona Summit
EU heads of government met on 15-16 March 2002 in Barcelona and discussed, among other issues, the e-economy. Major points discussed included the eEurope programme, digital television and broadband. On eEurope, the Council confirmed that the Commission was mandated to propose a new eEurope Action Plan to cover the years from 2002-2005. Ministers said the plan should focus on security, eGovernment, eLearning, eHealth, and eBusiness. Of these, eLearning was given the highest profile in Council statements. The Commission will present its proposals at the Seville Council of 21-22 June 2002. Member States restated that mass availability of broadband was a priority, but failed to come up with any concrete proposals or ideas, or to mandate the Commission to do so. However, the Commission may develop such proposals of its own initiative. Governments identified UMTS and digital television as key areas for activity over the next year. Specifically, they called for further efforts from Commission and themselves to foster the development of digital television and UMTS. They also asked the Commission to present an analysis of the remaining barriers to widespread uptake of such technologies at the Seville summit.

6.2 Council Commitment to Internal Market for Services
At the end of 2000, the EC brought forward its plan to identify, analyze and remove barriers to the Internal Market such as the ban on toy advertising in Greece and the restrictions on advertising to children in Sweden. At the Barcelona Summit ministers reconfirmed publicly the need for the Internal Market to become a reality, which will be to the benefit of business and consumers alike. DG Internal Market will produce an interim report on the Strategy this June, in advance of Denmark taking up its tenure of the EU Presidency in the second half of 2002.

6.3 Commission/DTI Workshop on Internal Market for Services
A joint Commission /DTI workshop on the Internal Market for Services was held in the UK at the end of February. It highlighted the many problems experienced by businesses attempting to establish a presence outwith their home country. The time taken to register a company and mutual recognition of qualifications were some of the logistical problems involved in doing business in another country. Different laws on advertising were also a concern. The Commission stressed their need to have actual statistics regarding the additional costs incurred by UK companies when developing their activities in other Member States. The DTI and Commission welcomed the interest in and support of the Internal Market Strategy for Services by all those attending the workshop and encouraged a continued dialogue. A copy of the report on the workshop¹s outcomes is available on request.

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UPCOMING EVENTS
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The Challenge of Change in EU Business Associations 07-10 May 2002
Scotland House Conference Centre, Brussels (Rond-Point Schuman 6, Floor 8). For the Programme and Registrations visit http://www.ey.be/euroconference.

5th World Media Economics Conference, Turku Finland 09-11 May 2002
General registration has begun. A copy of the programme can be found at the conference website at http://www.tukkk.fi/mediagroup/meconference.htm. The conference registration form and hotel reservation information can also be found on this site.

The Fourth Annual TV Meets the Web Seminar, Amsterdam 16-17 May 2002
'Interactivity' has been chosen as the central theme of this year's seminar. Register at http://www.tvmeetstheweb.com/may2002/registration.php.

 
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