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 EPC Members' Newsletter: October 2002

 
EPC MEMBERS’ OCTOBER NEWSLETTER 115



DATES FOR YOUR DIARY

KEY ISSUES OF THE MONTH
Market Abuse
Duty to Trade Fairly
  EPC position paper
  Commercial communications meeting
  Codes of conduct
Public sector information

ALERT SECTION
Database directive consultation

WHAT’S NEW
Electronic Commerce

1.1
Internal market for services
1.2 Product liability

Internet Regulation
2.1 Data protection conference
2.2 Ombudsman wants clearer data protection rules
2.3 One stop licensing agreements
2.4 Resolution on Europe 2005

Copyright
3.1 Deep linking
3.2 EU to unveil new media piracy rules


Advertising
4.1 Parliament opposes medicines advertising from industry
4.2 Tobacco advertising
4.3 Advertising to children

Audiovisual & General Media Policy 
5.1 Sub-licensing
5.2 Commissioner Reding on the future of the press

5.3 Moral rights

General
6.1 Better Regulation
6.2 Newsprint producer competition investigation
6.3 US steel sanctions and paper products
6.4 Takeover bids

UPCOMING EVENTS


DATES FOR YOUR DIARY

November 4th -10th Committee meetings and Brussels mini plenary at European Parliament
November 12th
-13th EPP and Green party hearings on TVWF at the Brussels Parliament
November 13th
- 14th Meeting of EPC members, Copenhagen
November 14th
-15th Consumer Affairs Council
November 27th
-28th Public hearing on the eSafe programme
December 3rd - CEN DRM group meeting, Brussels
 

KEY ISSUES OF THE MONTH

Market Abuse

The market abuse directive has been the topic of hot debate between the European Institutions and the press in the last few months.  EPC members have mobilised to protest against the CESR bid to include journalists in the scope of article 6(5) and many members of the European Parliament have also come out in favour of our action.

The debate moved to the plenary session of the European Parliament this month.  Three amendments had been tabled on article 6(5) (amendments 5 from the rapporteur, 6 from Theresa Villiers and 7 from Chris Huhne).  Amendment 5 did not remove journalists from the scope of the article but referred instead to technical descriptions of journalists.  Amendments 6 and 7 took journalists out of the scope of the article altogether (see newsletter 114 for a more detailed description).

In presenting the report for voting, Mr Goebbels reiterated his view that Art 6(5) would not adversely affect the press and that the Commission would be able to regulate the CESR approach to secondary legislation in Stage 2 of the “Lamfalussy” process which leaves detailed writing of legal texts to the regulators and the Commission to “interpret” the Directive.  He stated the need for pan-European regulation of journalists and mentioned the press campaign, led by EPC, on market abuse in fairly negative terms.

Commissioner Bolkestein was adamant that it was not the Commission’s intention to burden the work of journalists with the requirements of the Directive.  He contended that scandals have shown that journalists can influence market prices and came out against amendments 6 and 7, giving the fact that journalists were too small a group to exclude from the scope of the article and that to pass amendments 6 and 7 would require the harmonisation of the definition of a ‘journalist’ across Europe.  He also hinted that the Council would be able to accept the amendments if 5 was the chosen amendment in this case and therefore the legislation would progress more quickly. He said that only those journalists who made direct “buy” or “sell” recommendations of shares in which they themselves had invested should require disclosure of that interest.

In the debate that followed, Chris Huhne MEP argued that the market abuse directive without his amendment would clear the way for press regulation by the back door.  MEPs Theresa Villiers and Pia-Noora Kauppi put the argument that inclusion in the scope of the article for journalists would reduce transparency rather than increase it and that this would lead to consumers being less well-protected.

Unfortunately the rapporteur’s argument that journalists would not be affected, his campaign of briefing against those who supported article 6 and 7 and his contention that the Council and Commission would be prepared to accept only his amendment, thus avoiding lengthy conciliation procedures, won the day.  Amendment 5 was accepted, 6 fell and 7 was withdrawn.

It is a good reflection on the EPC campaign that so much press coverage was given to the subject.  Articles from all over the European Union were written on the debate and vote.  This will keep the issue in sharp focus for the next phase of the EPC campaign.  A meeting has been scheduled in Paris on 4th November to discuss the form the implementation rules of this directive will take.  CESR is very keen to avoid another public battle after it was told that it had exceeded its remit by the Parliament’s EMAC committee.  All members are invited to this meeting.  For more details please contact the EPC.


Duty to Trade Fairly

EPC position paper

The EPC has submitted an opinion on the Commission’s follow-up communication on the green paper on a duty to trade fairly.  In its opinion the EPC stated that it could support a general framework directive which involved maximum harmonisation as long as this was a de-regulatory measure, which would amend the rather fragmented internal market situation which exists at present.

The EPC gave its general support to the measure providing certain key elements were incorporated into it. These included:

• a mutual recognition clause so that publishers may continue to operate according to the rules of their country of origin should be included;
• a radical overhaul of national provisions leading to de-regulation and simplification of rules should take place;
• the recognition of advertising self-regulation as a central part of delivering a fair trading environment.

A copy of the EPC response is available on request.


Commercial communications meeting

Members of the Commercial Communications Parliamentary intergroup met in Strasbourg this month to discuss the latest developments after the Commission’s follow-up communication on the Duty to Trade Fairly green paper. Industry stakeholders met with David Mair of DG SANCO to discuss their responses and remind him of industry’s concerns. He informed them that there will now be an impact assessment of the legislation and assured all present that the draft legislation would be released by the end of 2002. However, the DTI in the UK is of the opinion that it will take much longer to make the impact assessment and consult the member states, who seem to have very different opinions on the subject.


Codes of Conduct

The subject of codes for the self-regulation of advertisers is an important element of the discussion on potential new legislation. At the EASA meeting held in Stockholm at the end of September, Commissioner Byrne challenged the advertising industry to develop effective codes with the following statement:

“Ladies and gentlemen this is my challenge to the advertising industry in Europe. I encourage you to develop a single genuine EU-wide code covering fair commercial practices in advertising. If you can develop an effective code that will be adhered to by all the players in the industry in Europe, then the chances of simpler legislation would be enhanced considerably.”

EASA (of which EPC is a member) has accepted this challenge and will be working to develop draft of a potential Europe-wide code in the near future.


Public sector information

The EPC has submitted a position paper to Rapporteur Mr Van Velzen on the re-use of Public Sector information.

The main points made by EPC were that:

• Charges for PSI should not exceed marginal cost recovery;
• Charges should be reasonable, transparent and non-discriminatory;
• A specialist body should be created by the Commission which deals with pricing and accessibility issues;
• PSI should be excluded from copyright and database rights;
• PSI accessibility should be harmonised across the EU;
• The scope of the directive should be as wide as possible;
• There should be a positive obligation on Public Sector bodies to licence PSI.

The shadow Rapporteur has released his report and agrees with most of the points raised by EPC, although he has not made any comment on copyright issues.

Mr Van Velzen’s report will come to committee for first reading at the beginning of December and the Rapporteur is able to table amendments until 19th November.  A copy of the EPC submission is available on request.  The rapporteur’s submission will be made available to all EPC members as soon as it is published.

 

ALERT SECTION

Database Directive Consultation

All EPC members have received a letter asking them to contribute their opinions on the draft database directive.  If you have not received a copy of this letter, please contact EPC as soon as possible.

 

WHAT’S NEW

Electronic Commerce

1.1 Internal market for services

At a recent internal market Council meeting, Member States discussed the Commission’s presentation of its second biennial report on the application of the principle of mutual recognition in the Single Market.
Council welcomed the report, as well as the Commission’s intention to adopt practical guidelines addressed to the
Member States and economic operators in order to facilitate the application of mutual recognition for products.
The report assesses progress made since 1999, when the first report provided a preliminary evaluation of how well mutual recognition has contributed to the operation of the internal market.  It also addresses areas which are still problematic.  A copy of the report is available form EPC on request.

1.2 Product liability

The Danish Presidency is about to present an EU initiative in the field of product liability.  It has taken this initiative as the result of an ECJ judgement which creates some uncertainty about what rules member states can lay down about intermediary liability.

In 1985, the EU adopted a Product Liability directive introducing ‘objective liability’ for damage caused by defective products. Objective liability makes the producer subject to damage liability even if he is without fault or negligence.  However at the moment, the directive contains no rules regarding the liability of intermediaries other than a rule stating that the intermediary should be regarded as the producer in cases where the actual producer cannot be identified.  Some member states have created additional rules on intermediary liability and these have been called into question by the ECJ judgement.

It is for this reason that the Danish Presidency is calling for a reform of the directive which would allow the consumer to choose to claim either from the producer or from the intermediary in the event of a product being defective.

EPC is following developments in this area closely in order that those who sell online do not become liable for faults in the goods they sell, as part of the revision of the directive.


Internet Regulation

2.1 Data protection conference

EPC attended a two day conference on data protection this month.  The main points to come out of the conference were:

•
The Commission has decided against proposing any radical or far-reaching legislative modifications to the Directive. Instead it will focus on non-legislative means to work towards a better and more consistent implementation of the Directive;
•
While the participants expressed substantial criticism of some of the Directive’s elements, there was a general consensus that the core principles do not need to be changed;
• Participants highlighted divergences in Member State implementation of the Directive and called on the Commission to be tougher in ensuring that the Directive is implemented correctly in national countries;
• The Article 29 Working Party was substantially criticised for a lack of transparency and consultation with business and citizen’s groups prior to the adoption of opinions. Mr Rodota, Chair of the Working Party, took these criticisms on board and promised to introduce greater transparency into the workings of the group;
• The Commission is unlikely to have finalised its report on the implementation of the Directive before the start of 2003;
• The Citizen’s Freedoms and Rights Committee in the European Parliament will hold hearings in early 2003 to develop its position on any review of Directive 95/46.

In his closing remarks, Commissioner Bolkestein stated that it was too early, seven years after its adoption, to be considering any radical review of the Directive. The Commission’s plan for the near future is to explore solutions which will simplify the regulatory framework and give priority to its uniform and consistent application.

2.2 Ombudsman wants clearer data protection rules

In a letter to Romano Prodi this month the European ombudsman has demanded clarification of the EU’s 1995 data protection rules.  He argues that the Commission and European Parliament are using these rules to deny access to documents which are in the public interest.  Among the examples he gives are the parliament’s refusal to publish lists of MEP’s assistants and the Commission’s refusal to publish winners of recruitment competitions.  A statement on the ombudsman’s website makes it very clear that he is prepared to fight this lack of transparency at EU level.  EPC will continue to follow this debate closely.

2.3 One stop licensing agreements

An antitrust exemption granted by the European Commission this month will introduce one-stop licensing agreements for European television and radio companies, which simultaneously broadcast music shows on the Internet. Under the new rules, broadcasters can get a single licence from royalty collecting agencies to cover Internet broadcasts across most of the 18-nation European Economic Area (EEA).  This replaces the old system where they need to secure a licence from each national copyright administration and individual collecting societies.


Copyright

3.1 Deep linking

Google’s launch of a news service which bypasses the front pages (and more importantly, advertising) of news websites and takes the subscriber directly to the relevant page this month has highlighted the practice of deep-linking.

This practice is becoming increasingly widespread and has proved difficult to challenge in US courts because copyright laws have had to be used as the basis of the challenge. In Europe, the database directive has been used successfully in Germany and Denmark to challenge deep-linking services. The definition of what constitutes a database is central to the deep-linking issue in the EU.

As yet there is no definitive decision on whether or not this practice will be accepted in the EU. EPC will continue to monitor the situation closely and keep members updated. More information on the cases heard in Europe is available on request.

3.2 EU to unveil new media piracy rules

The European Commission will propose new legislation in November aimed at strengthening the fight against music and film piracy.  The industry has welcomed the Commission decision to toughen its anti-piracy.   New measures are expected to include are expected to include harmonised procedures for searching, seizure and proof by national authorities and criteria for calculating damages.

In a bid to help less developed countries improve their record on copyright abuse, the European Union is providing an extra €2.5 million in aid to the nine-member Association of South-East Asian Nations (ASEAN) to help them deal with copyright abuse. The aid for the 'intellectual property rights co-operation programme' aims to offer technical assistance in the ASEAN countries to help them adopt, implement and enforce global copyright rules.


Advertising

4.1 Parliament opposes medicines advertising from industry

In October’s plenary session, the European Parliament voted on measures to control the advertising of pharmaceutical products.  As part of the review of the pharmaceuticals directive, the parliament voted to restrict direct advertising of products to patients.  However, the move to ban any communication which raised the awareness of availability of medicinal products was not adopted.  The Commission proposal to run pilot schemes for patient information in the fields of Aids, diabetes and asthma treatments was also rejected by parliament.  The review now goes forward for a second reading.  EPC will be working with pharmaceutical companies to ensure that a fair hearing is given to those who advertise medicines in a responsible manner.

4.2 Tobacco advertising

Parliament’s legal affairs committee voted this month on the Medina Ortega report on the Commission’s draft directive on tobacco advertising.  The Commission stance is that there should be a blanket ban on all advertising cross-border because this has an effect on the internal market.

However, Rapporteur Mr Medina Ortega (a professor of law) referred members of the committee to the advocate general’s report on the court case which annulled the last attempt at a directive on this area.  On his advice, the committee has now voted to allow cross border advertising of tobacco in the printed press.  The reason given for this is that there are few cross-border sales of printed press and the impact this has on markets in other countries is minimal.

Although this is good news for the printed press, the battle is not yet won.  The legal affairs committee and the environment committee are both writing reports on the legislation under the Hughes procedure.  This means that both reports have equal weight at plenary and the environment committee has chosen to advocate the Commission’s blanket ban approach.  EPC and others are approaching members of the European Parliament to ensure that the sensible proposition made by the legal affairs committee is accepted at plenary next month.

4.3 Advertising to children

Commissioner Byrne addressed the EACA conference this month on the subject of advertising to children.  Whilst stipulating that the new framework directive on consumer protection would not cover areas relating to decency, morality and health, he stressed that the concept of fairness applies equally to children as to all consumers.  Mr Byrne added that all commercial practices should be modified in the light of the groups being targeted whether the young, the old or other vulnerable consumers.  He rejected the idea of an outright ban on advertising to children but stressed the need to apply high standards to the marketing directed at vulnerable groups.

Jim Murray, the Director of the European consumer group BEUC, also made a speech on the subject of advertising to children.  He too rejected the notion of a total, EU-wide ban but was keen to promote heavier regulation of advertisers in this area.

EPC will monitor developments closely in this area.  We are keen to ensure that restrictions are not imposed on advertising directed at children as part of the framework directive on consumer protection.


Audiovisual & General Media Policy

5.1 Sub-licensing

The European Court of First Instance has forced the Commission to reconsider its application of a sub-licensing system to radio and television.  In a case brought by M6, Antena 3 and SIC, the court found that the sub-licence system does not guarantee competitors sufficient access for retransmission rights of sporting events which the EBU has exclusive access to.  The court stated that the Commission has committed a blatant error of assessment by concluding that the sub-licence system guarantees access to EBU third party competitors.  Lists dating back to 1997 of sub-licences granted by the EBU showed that access to items for retransmission had been limited to only a few countries.  The Commission now has two months either to appeal or to take a different decision.

5.2 Commissioner Reding on the future of the press

The European Commissioner for education and culture, Vivien Reding made a speech to French journalists this month giving her views on the future of the European press.  She highlighted the need for increased access to the media for all and the need this increased access brings for ensuring that the internet is safe for vulnerable groups to use.

On the issue of press freedom, Mme Reding stressed that her view was of a press which was self-regulating and as free to express itself as possible within these self-regulation
parameters.  She made reference to the market abuse issue and stated her support for the press in its bid for self-regulation in this area.

Finally Mme Reding highlighted the need for the press to initiate an inter-cultural dialogue both within Europe and with the rest of the world.

5.3 Moral rights

European and American film producers have joined forces to encourage EU governments to ban the release of DVDs which have been manipulated for commercial purposes without the permission of the author.  It is possible for this manipulation to take place because the USA does not recognise the ‘moral rights’ of film producers.

WIPO was made aware of this situation and the danger of allowing the most prolific film producer in the world to deny authors their moral rights several years ago.  The conferral of moral rights gives the author the power to veto any unauthorised manipulation of their work.

With the arrival of increasingly sophisticated digital technology the opportunities for manipulation of work without permission are increasing.  FERA, the Federation of European Film Directors is now calling on the Commission to harmonise moral rights across the EU.


General

6.1 Better Regulation

The European Council held an exchange of views on the Commission proposal for measures which would improve its regulatory efficiency.  It confirmed its support for the ‘Better Regulation’ plan and asked for swift action to bring the plan into being.

Whilst supporting the initiative, the Council called for simplified, more efficient procedures which will reduce bureaucracy.  It also called for all legislation to be proportionate to its objectives.  The Council has called on COREPER to set up a horizontal working group on this subject.  The Commission will report on its progress in the next competitiveness Council in November.

6.2 Newsprint producer competition investigation

The Commission has started an investigation into a planned €35 million aid project to UK newsprint producer Shotton. The aid is intended to adapt Shotton's facilities to produce newsprint from waste paper rather than virgin pulp. Although the Commission recognises the environmental benefits of the project, it has serious doubts about whether this aid could be approved under the current guidelines on State aid for environmental protection. Even if the environmental guidelines were to apply, the Commission at this stage has doubts that the eligible costs were calculated in accordance with the environmental guidelines. The investigation gives interested parties the chance to put their views on this subject.

6.3 US steel sanctions and paper products

The European Services Forum has released a warning to its members that some newsprint is included in the list of items which will incur higher duties as a result of the sanctions to be imposed on the US as part of the continuing dispute over steel.  EPC has sent a list of the affected items to members and has asked for comments on any potential problems they may foresee.

6.4 Takeover bids

Following the presentation of the takeover bids draft directive last month (see EPC news September) the content of the proposed legislation has caused some controversy.  The issue of multiple voting rights has caused the most discussion and the voices of dissent have come mainly from German MEPs and Chancellor Schroder himself.  The Germans are thought to be unhappy with the Commission’s refusal to include the removal of multiple voting rights from the scope of the Directive.  The spokesman for Commissioner Bolkestein stated that the Commission needed to be pragmatic in its approach to this piece of legislation and therefore proposed a draft law which had a chance of receiving a qualified majority in Council.

UPCOMING EVENTS

November 4th-8th WIPO meetings. Geneva.

November 20th-24th 10th Anniversary Celebration of IPI HQ Vienna. “Visions for the future of communications”

November 21-22nd The 2002 Editor and Marketeer Conference organised by the World Association of Newspapers. Barcelona.

November 26-29th European Paper Week organized by CEPI, Brussels

December 3rd ETNO Conference on Broadband. Brussels

 
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