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 The EPC Members' Newsletter

Legislative up-date 66 Month - November 1997 

In this issue we cover:

  • Will Health Ministers agree a tobacco ad ban on 4 December?
  • Commission gives self-regulation prominent role in control of Internet content 
  • Oreja enters the media concentration debate
  • Further delays to the copyright directive



1.1 Media Pluralism

1.2 Uniform Book Pricing

1.3 Distribution and Pricing Policy


2.1 Council Agreement on Regulatory Transparency
2.2 Adoption of Communication on Protection of Minors

2.3 Adoption of Internet "Action Plan"

2.4 MEPs discuss electronic commerce

2.5 Programme to stimulate take up of information society


3. 1Delays to draft directive
4.1 Council to discuss tobacco ad ban
4.2MEPs discuss tobacco plan

4.3Commission to look at Loi Evin infringement cases


5.1Audiovisual guarantee fund

5.2New Audiovisual think tank


6.1Agreement on ISDN Proposal


7.1Producers push for "shared responsibility" agreement


8.1Tax Code of Conduct

8.2New Tax Policy Group

8.3Reductions for VAT for labour-intensive industries


9.1Media Alliance threatened

9.2European Company Statute negotiations

9.3Hearing on Corporate Governance


1.1 Commission - Media Pluralism

The Luxembourg Presidency held a seminar in November on digital television, at which Commissioner Oreja stated that a market equilibrium must be found between concentrations which might affect pluralism and sectoral fragmentation which could restrict EU industry. DG XV meanwhile continues to work on a text for a directive. New proposals are expected in the New Year.

1.2 Council - Uniform book pricing

At the Culture Council of 24 November, the Council requested the Commission to review again the question of uniform book pricing, to examine whether the system is compatible with EU competition rules.

1.3 Distribution and pricing policy

Following completion of an internal Commission investigation into newspaper and magazine pricing and distribution practices, which included an EU-wide survey carried out by research consultants N0P(UK), DG XV officials have confirmed that no action will be taken to legislate in this area. However, it is always possible that an individual complaint might be brought before the Commission, but DG XV assured us that the findings of their investigation will be used to argue against introducing any EU-wide legislation. Concern first arose when the Commission was made aware of huge price differences between papers sold in their country of origin and in other EU countries but have been reassured that differences are justified on grounds of additional distribution costs outside the country of first publication. 


2.1 Commissioner Monti welcomes Council agreement on transparency mechanism

The political agreement on a Common Position concerning the proposed Directive on a transparency mechanism for Information Society services, reached at the 27 November Council of Internal Market Ministers, has been warmly welcomed by Mario Monti, European Commissioner for the Single Market. The proposed Directive would require draft national rules that concern the free movement of Information Society services to be notified to the Commission. After notification there would be an initial ‘standstill' period of 3 months to allow the Commission, Member States and interested parties to comment on the draft rules and if necessary propose amendments. The proposal's key aim is to ensure that the Single Market is not fragmented and that no new regulatory barriers appear through the introduction of divergent rules at the national level.

The proposal recognises that Information Society services are neither broadcasting nor telecommunications services and so should not be subsumed into existing inappropriate telecommunications or broadcasting regulations. The proposal defines "Information Society services" as all existing or new types of services that will be provided at a distance, by electronic means and on the individualised request of a service receiver. This definition of "service" would cover, for example, on-line professional services (e.g. solicitors, estate agents, stockbrokers, insurance, health care, travel agents), interactive entertainment (e.g. video on demand, on-line video-games, virtual visits to museums), on-line information (e.g. electronic libraries and newspapers, financial information), virtual shopping malls and distance learning services.

On the other hand, this definition would not cover (because they are either not offered at a distance, or not offered via electronic means, or not supplied on individual demand) television broadcasting services (including near video on demand services), radio broadcasting services, Teletext, non-electronic direct marketing services (for example, mail order catalogues), automatic bank tellers, electronic games such as found in amusement arcades and voice telephony services (including via GSM).

Financial services offered at a distance or by electronic means would fall within the Directive's scope. However, draft laws concerning subjects already harmonised by EU legislation would not have to be notified. In the specific case of national rules on regulated markets, legislation would not have to be notified prior to adoption but afterwards, so that there would not be a standstill period.

2.2 Commission - Adoption of "Communication" on protection of minors

The College of Commissioners has adopted a Communication, following up the ‘Green Paper on the Protection of Minors and Human Dignity' which recognises the important role of self-regulation in controlling on-line content. This includes a Recommendation which was presented to the Culture Council on 24 November, urging governments and industry players to work together to control harmful and illegal material on on-line networks and television by focusing on:

    • the promotion of codes of conduct: the Communication's Annex set out suggested ‘common guidelines' for the implementation at national level of a self-regulatory framework. The purpose of the guidelines is to ensure broad consistency at EU level and sets out minimum guidelines for a national self-regulatory framework on:-
    • consultation and representatives of the parties concerned;
    • code(s) of conduct;
    • national bodies facilitating co-operation at EU level;
    • national evaluation of self-regulation.
    • encouragement of broadcasters to experiment on a voluntary basis with new means of protecting and informing viewers as a supplement to the existing national and Community regulatory framework governing broadcasting.
    • promotion, in close co-operation with the parties concerned, of measures to enable minors to make responsible use of new audiovisual and information services, notably by improving the level of awareness among parents of the potential of the new services and of the means whereby they may be made safe for minors.
    • the development of a common assessment methodology: Member States should encourage the participation of relevant parties (users/consumers/ businesses/public authorities) in the definition, implementation and evaluation of national measures for the protection of minors and human dignity and contribute to the establishment of a common assessment methodology at European level.
2.3 Commission - Internet Action Plan

The Commission has adopted an ‘Internet Action Plan' (for 1998-2001) which distinguishes between "illegal" material (pornography/racism which should be dealt with by the police/judiciary, and legal co-operation and self-regulation) and "harmful" material (dealt with by filtering or classification systems). The Action Plan is linked to the Recommendation on the Protection of Minors discussed above, and covers the following:-

    • Industry self-regulation: A network of hot lines (to report illegal content) will be set up;
    • Promotion of introduction and use of filtering systems: Self regulation and content-monitoring schemes will be developed by access providers, content providers and network operators. Internationally compatible and interoperable rating and filtering schemes should be used to protect users;
    • Awareness actions: the public will be encouraged to use the hot lines and choose the appropriate content;
    • Support actions: The Commission will finance the examination of legal questions raised by Internet use, through the sponsoring of co-operation meetings and the organisation of an international conference.
2.4 EP - Economic Committee discussion on electronic commerce

The Economic and Monetary Affairs Committee in the EP have discussed the Commission's Communication ‘A European Initiative in Electronic Commerce', which provides a policy framework for future Community action. MEPs proposed that the EP's Resolution on the Communication should include issues such as coding practices, confidentiality and the possibility of establishing an Internet Charter, and commented that the Commission should examine taxation aspects and problems with encryption, and that implications for the Internal Market should be examined. The Parliament's scientific research body (STOA) will also produce a report on electronic commerce.

The future regulatory framework for electronic commerce is also being examined by the Trans-Atlantic Business Dialogue (TABD), led by DGs1 and 3 in the Commission. 

2.5 Commission - amended proposal for stimulation of information society

The Commission has amended its proposal for a ‘Multi-annual Community programme to stimulate the establishment of the information society in Europe' to increase awareness of the impact of the information society (IS). The programme is aimed at the establishment of the IS in Europe and at making use of the world-wide dimension of the IS. It will promote access and familiarity in the use of new IS services and applications. Further details are available on request. The Commission will be awarding subsidies for projects involving studies and for meetings of experts, as well as for contributing to international organisations in relation to the IS.


3.1 Draft of copyright directive available

EPC has obtained a copy of the forthcoming copyright directive, which specifies that it "does not aim at a general harmonisation of laws on copyright and related rights". The ‘Ad Hoc Alliance for the Digital Future' which is a coalition of telecom operators, on-line service providers, consumer electronics manufacturers and IT companies has explained to Commissioner Monti that network operators and Internet service providers should not be exposed to claims regarding copyright infringements by their customers. The question of liability for copyright infringements will now be dealt with in a separate "electronic commerce" directive early in the new year. Final adoption of the draft copyright directive has been delayed but we expect publication before the end of the year. 

EPC has been actively lobbying together with other rights holders for strong copyright protection in the digital age and faces an on-going battle with the ad hoc alliance and their supporters who have consistently attempted to dilute copyright protection for rights holders for on-line networks.


4.1 Council - Proposed tobacco advertising ban

EPC has been actively involved in lobbying Health Ministers and civil servants against the forthcoming ban on tobacco advertising and sponsorship culminating in a letter to Ministers (available on request). The Council Health Working Group met on 4, 12 and 17 November, and the issue was discussed at COREPER on 19, 25 and 28 November amidst growing controversy over the UK's requests for a permanent exemption from the sponsorship ban for Formula One motor. The latest information prior to this week's Health Council meeting follows:

    • The legal base has been confirmed as Article 100A (Qualified Majority Voting), rather than Article 129 (unanimity), even though the Council's Legal Service is still in favour of Article 129. 
    • Member States opposed in general to the ban are Germany and Greece. Denmark has a scrutiny reservation regarding circulation of publications from outside the EU. Italy is opposed to the concessions given in Article 2, the widening of the definition - and exemption - of tobacco sales outlets and any ‘dilution' of the proposal.
    • Belgium and Finland appear to be in favour of the ban. 
    • The UK has proposed an exemption for Formula 1 (F-1) and a voluntary code to reduce advertising at race tracks. The UK has pointed to the danger of the sport moving to Eastern Europe and Asia, where tobacco advertising rules are weaker. Tessa Jowell has told the UK Parliament that the UK Government will accept nothing less than a full exemption for F-1, contrary to rumours that the UK would accept a 10 year derogation. It appears that Belgium, Finland and Ireland will be unlikely to support the ban if the UKs proposed exemption is granted. 
    • The Dutch Government has decided to vote in favour of the proposed ban, although at COREPER on 25 November, the delegation stated that it will not accept an exemption for F-1 and demanded longer transition periods for phasing out sponsorship and press advertising (Art.6). 
    • Austria will abstain at the Health Council on 4 December. 
The Health Ministers meet on 4 December when a vote on the latest text is more likely than at any time for many years. If a vote is delayed, the next Council meeting is in April 1998 during the UK's presidency.

4.2 EP - role in combating tobacco consumption

The EP's Environment Committee has adopted the Report by Valverde Lopez MEP (EPP, Spain) on the Commission's ‘Communication on the present and proposed Community role in combating tobacco consumption'. The report stipulated that the EP should support an EU tobacco ban and urged the Council to reach political agreement on the proposed ban on 4 December.

4.3 Commission - Loi Evin - Will the Commission take France before the Court of Justice?

The European Commission is due to decide on 4 December whether or not to open a case against the French Authorities over their restrictions on advertising and sponsorship by alcoholic beverage companies. A decision not to proceed to take France before the Court of Justice will be seen by many that the Commission is prepared to condone alcohol advertising restrictions at the European level. DG V (Health) is already discussing ways of restricting on-pack information and marketing of alcoholic drinks to young people. EPC has written to Commission President, Jacques Santer, warning of the repercussions of inaction.


5.1 Council - No agreement on audiovisual guarantee fund

At the Culture and Audiovisual Council of 24 November, Ministers failed to reach the required unanimity despite the Presidency's compromise proposal. Member State refused to change position, with UK, Germany and Netherlands against the proposal, and France and Luxembourg for. The UK Presidency from January is therefore unlikely to move discussions forward on the proposal. Meanwhile in the EP, a resolution has been adopted which states regret that the Council has not yet reached agreement on the fund.

5.2 Commission - Audiovisual Think Tank

The newly formed high-level Think Tank on audiovisual policy met to discuss the European content production industry with respect to the challenges of the new "digital landscape". The Think Tank will meet a further five times next year and will formulate recommendations. Its list of members is available on request which includes Francisco Balsemao, EPC member for Portugal.


6.1 EP/Council - Agreement reached on ISDN data protection proposal

The EP and Council of Ministers have reached a compromise agreement on the proposed Directive (which supplements the general Directive on data protection adopted in 1995), in response to the special requirements of and the technical possibilities inherent in telecommunications networks, particularly digital networks. The provisions of the directive cover, in particular:

    • the security of services and of networks;
    • confidentiality of communications;
    • traffic and billing data;
    • the right to receive non-itemised bills;
    • presentation and restriction of calling and connected line identification;
    • automatic call forwarding;
    • data contained in directories of subscribers;
    • unsolicited calls for the purposes of direct marketing
The main problems which the Conciliation Committee had to resolve concerned were:
    • Confidentiality of communications: Taping of conversations are to allowed if the activities are legally authorised (e.g. in order to safeguard national security, defence, public security), where users themselves resort to or consent to the use of such practices or where recordings provide proof of a commercial transaction or any other commercial communication. 
    • Technical adaptation of the Annex: the annex to the common position establishes an exhaustive list of data which may be processed for the purposes of subscriber billing or interconnection payments. Unlisted data must be deleted or rendered anonymous at the end of the communication. The list may undergo technical adaptation by the Committee set up under Article 31 of the general Directive on data protection. The Conciliation Committee stated that this procedure may not be used for substantial amendments but only for amendments which adapt the Annex to further technological progress by taking account of market changes or consumer demand. The Commission must inform the European Parliament of its intention to apply this procedure (failing which the complete legislative procedure laid down in Art 100a of the Treaty will apply).
    • Entry on the ‘red list': Member States may allow operators to require a payment for the exercise of the right to have their particulars entered in a directory (‘red list'). The final compromise allows operators to charge for details to be entered in a directory provided that the sum requested should not be such as to dissuade an operator from exercising such right and provided that it is calculated so as to cover the costs incurred by the operator in adapting the ‘red list'.
    • Unsolicited calls: the Directive prohibits the use of automated calling systems or fax machines for the purpose of direct marketing, except in respect of subscribers who have given their prior consent. The Conciliation Committee has added that the legitimate interests of subscribers other than natural persons must also be given sufficient protection in respect of unsolicited calls.
    • The transposition deadline is the same as for the general Directive on the protection of personal data, i.e. 24 October 1998. In the case of the provisions on the confidentiality of communications (Art 5), this deadline is extended until 24 October 2023 in order to take into account the special procedures required in certain Member States.
The EP adopted the conciliation text on 20 November and the Council adoption is expected shortly.


7.1 European Paper Industry - shared responsibility

The European Paper Industry (CEPI) held a follow-up meeting with publishers and printers to discuss the extent to which European associations in these sectors are willing to participate in their initiative on shared responsibility for the environment in the graphic part of the paper chain. The long-term objective is to secure a voluntary industry environmental agreement outlining commitments of the various sectors on shared responsibility instead of the Commission regulating in the form of a graphic paper directive but so far this initiative has not received active support from publishers. There was a threat from the German Government that they would impose a draft law unless the same recovery targets were met in the form of a voluntary industry agreement. The Government in turn said that it would not regulate for several years. The AGRAPA Agreement amongst printers and publishers has achieved an 80,5% recovery rate beyond that specified in the Agreement and in the original draft law. However, despite this excellent result, the German Ministry for the Environment has said that even this rate is not good enough. Other countries in which equivalent agreements have been concluded include Sweden, the Netherlands and Belgium. 

Although there has been much speculation that the Commission's Environment Section (DG XI) would impose a graphic paper directive, there is no concrete threat as yet. However, with the new policy thinking on Environmental Agreements, there is pressure on our sector to come up with an agreement with clear quantifiable commitments or else CEPI has warned the Commission will regulate. CEPI has distributed a table of possible commitments which could form the basis of such an environmental agreement. These include, for example, the commitment to use technologies, inks, glues that facilitate recycling and recovery. All associations have been asked to give their thoughts on possible commitments to CEPI. CEPI's aim is to try to start negotiations with the Commission on this next year. All press associations would be closely involved in these talks.


8.1 Council/Commission - Code of Conduct

The Commission's draft Code of Conduct - designed to reduce ‘unfair tax competition' between Member States was discussed by Economic and Finance Ministers on 13-14 October and again by their representatives in the Taxation Policy Group on 20 October. At the latter meeting there was a majority agreement that VAT should be excluded from the draft Code of Conduct. 

There is still a lack of consensus on the following aspects:

    • the indicators of harmful tax measures;
    • the best procedure for the provision and review of information;
    • the most appropriate legal form for the Code;
    • the revision clause;
Commissioner Mario Monti agreed that VAT should not be included within the scope of the proposed package of measures contained in the proposed Code.

8.2 Council - New Tax Policy Group to prepare for 1 December Council

A newly-constituted Taxation Policy Group has been created by Luxembourg's Budget Minister, Marc Fischbach, to prepare the final deliberations on the proposed taxation strategies for the ECOFIN Council of 1 December. The Group comprises representatives of Finance Ministers.

8.3 Commission - reduced rate of VAT on certain labour-intensive services

As part of its study on new means of creating jobs, the European Commission adopted on 12 November a Communication which recommends the introduction on an experimental basis of a reduced rate of VAT on certain labour-intensive services. The Commission is considering proposing a directive (probably in the form of a modification to Annex H of the Sixth VAT Directive), enabling those Member States so wishing to introduce this measure and to verify over a three-year period its impact on jobs, tax revenue and on the single market. 

The initiative would be proposed on an experimental and optional basis, under the following terms:

  • it must not create any distortions of competition and the Commission will evaluate the risks of this happening both before and during the trial period;
  • the measure would be limited to three years (1 July 2023 - 30 June 2023) and would then lapse automatically;
  • the services concerned must be highly labour-intensive and supplied locally.
Some Member States have expressed hostility to the initiative on the basis that it would reduce VAT revenues and have opposed any move to extend it to other sectors.  9.0 GENERAL

9.1 Commission - Media alliance threatened

Commissioner Van Miert has threatened German media firms Kirch and Bertelsmann AG and Deutsche Telekom AG with fines if they go ahead with a television alliance without asking EU consent. The Commissioner's reaction was a surprise, as it followed a meeting between Commissioner Van Miert and representatives of the three companies. 

9.2 Council - European Company Statues negotiations

The Luxembourg Presidency has produced a new compromise proposal to reach agreement on the long-deadlocked European Company Statute. The new text provides for a European company that could be set up under Community law which would not include provisions for worker consultation and information, so long as at least two thirds of the workers oppose it. The employees' decision could be revised after 2 years at their request.

9.3 Commission - Hearing on Fifth Company Law Directive and Corporate Governance

DG XV is hosting a hearing on 15 and 16 December to discuss internal market aspects of company law. EPC will be represented and a report will be available on request. 

For further information please contact:

General Enquiries: Angela Mills

Telephone: +44 (0)1865 310 732

Facsimile: +44 (0)1865 310 739

Press Enquiries: Heidi Lambert

Telephone/facsimile +32 2 735 3603