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Legislative up-date 58 Month - February 1997

In this issue we cover:

  • Revamped proposal on media concentration under consideration
  • Four European Parliament Committees discuss Green Paper on Commercial Communications
  • Sports Rights dominate as Council nears final decision on Television Without Frontiers
  • EP looks at VAT



    1. Commission: media ownership
    2. Commission: Polish TV deal
    1. Council: Broadcasting Directive
    2. Commission: Broadcasting Directive
    3. EP: Broadcasting Directive
    4. EP: Culture Committee
    5. Presidency: talks with public broadcasters
    6. Commission: Spanish decoders
    1. EP: Internet Communication
    1. EP: Green Paper on living and working in the information society
    2. EP: Information Society transparency mechanism initiative
    3. Commission: Hearing on the Green paper on the Protection of Minors
    4. EP: Green Paper on Protection of Minors
    5. WTO: Telecomms agreement
    1. FERA: OECD agreement on investment
    1. EP: Legal Affairs Committee on Commercial Communications
    2. EP: EMAC on Commercial Communications
    3. EP: Culture Committee on Commercial Communications
    4. EP: Environment Committee on Commercial Communications
    5. Council: Comparative advertising
    6. Council tobacco advertising
    7. EP: tobacco advertising
  7. VAT



    EP Committee looks at VAT harmonization

    1. Commission: distribution deal
    1. Commission - media concentration
The Commission is still not expected to take a final decision on its media concentration proposal for at least another month but a draft proposal has been circulated to other interested services. Conversations with DG XV officials indicate that :
    • they recognise that last year’s draft was overly ambitious politically, but still believe that it would have created the best conditions for industry. The new approach, once agreed, will still be presented as a way of creating an internal market for the sector designed to encourage cross-ownership and cross-border investment;
    • thresholds: the thresholds are likely to remain at 30% for TV and radio. The proposal for multi-media could be higher. They want to find a way not to affect adversely players who are near to or who already exceed the proposed thresholds. Member States will be given discretion to allow national situations to remain as they are - even if some companies have reached near monopoly situations. Member States will not be able to introduce stricter rules which means there would be a free market below the established thresholds;
    • Audience criteria: thresholds will be based on audience share, but Member States will be free to establish their own methodologies. The Commission believes that measurement of the share of the audience is the way forward and that existing methods are anachronistic.
The draft is still being considered by the Commission’s services but agreement is now expected soon.
    1. Commission - Polish TV deal.
The Commission has approved the European media Group CLT/UFA and Universal’s deal to launch RTL7 a new general interest TV station broadcasting to Poland. The Commission was obliged to examine the deal as the combined turnover of the parent companies exceeded the threshold set by the 1989 Merger regulation (currently under review). The Commission concluded that the deal will not have an impact on the competitive structure of the EAA markets.
    1. Council - Broadcasting Directive
The Audiovisual Council Working Group and COREPER have been finalising the Council’s position on the revision of the Broadcasting Directive in preparation for Conciliation discussions with the EP to agree a Directive. Sports’ rights - in light of the EP’s 2nd Reading amendment - has been the focus of the Council’s attention. The Council favours a system of mutual recognition of member states rules while the EP has proposed a legal system at EU level (EP proposal) with a centrally agreed European list of events.

The Council does not believe it feasible to consider a central list of key sporting events to be broadcast to a "sizeable proportion of the pubic and in unencoded form", as cultural differences place different emphasis on different sports. For this reason, the Council prefers the concept of "events of national interest" established by the Member States.

    • The 24 January Working Group meeting established the Council position on the bulk of the remaining amendments.
    1. Commission - Broadcasting Directive



      In parallel, the Commission has been considering sports’ rights and on 5 February adopted a Communication to help the Council and Parliament reach agreement on this contentious issue. The Communication consists of a substantive legal and economic analysis of exclusive broadcasting rights to major (sports) events. The suggested approach focuses on the exercise, and not the acquisition, ofexclusive rights with a view to safeguarding the public's right of access to the transmission of events of major importance for society.

      The Commission wants to strike the right balance between public interest considerations and the legitimate concern of pay-TV operators and sports federations (among others) to maximise revenues. It recognises that exclusive sports rights are a commercial commodity that play an important role in developing both the TV market and the sports themselves and that they are inherent to the economy of the broadcasting system. However, it also recognises that the risk of concentration and the low penetration of pay TV have led to competition and public access issues being raised. It believes that such measures have to be examined under two aspects: competition law and the freedom to provide services and says that the EP amendment and the Commission’s position to it concern the second aspect (i.e. the broadcasting law aspect).

    3. EP - Broadcasting Directive



      The EP Culture Committee is currently examining an own initiative report on Sport. The Report is primarily devoted to examining the possibility of sport having a Treaty base, free movement and the general promotion of sport. However, during a Committee discussion in late January, the Rapporteur, Mrs. Pack (PPE, D) made reference to the EP’s amendment to the review of the Broadcasting Directive which calls for EU legal provision to ensure that sporting events should be broadcast at no extra cost to the viewer. The Rapporteur wanted to know what action the Commission had taken. (see Council and Commission section above).

    5. Presidency - hold talks with public broadcasters
On 17-18 February the Dutch Presidency organised a meeting of experts to discuss public service broadcasting. Represented were: public service stations, the EBU and institutions from the EU and the Member States. The meeting reaffirmed the need for commitment to public service broadcasting and called for increased recognition and protection under EU rules. The Chairman believed that:
    • public service broadcasting would become more important in the developing information society;
    • public service broadcasting contributed to the functioning of democracy and social cohesion including a platform for debate, pluralism, information quality, education, culture and innovation.
    • public service broadcasting contributes to the cultural diversity of the member states and the EU;
    • public service broadcasters should be able to exploit new communications technologies and develop new services;
    • public service broadcasters must be "big players";
    • markets and competition can strengthen public service broadcasting and it can strengthen competition and make markets work better.
    • co-operation between public service broadcasters should be enhanced.
He concluded by making the following recommendations to the Member States and Commission:
    • Public service broadcasters should be in a position to obtain exemptions under article 85 (rules applying to undertakings) at least on the same grounds as commercial broadcasters.
    • In order to cope with the existing legal uncertainty concerning the admissibility of public financing and therefore the future of public service broadcasting as well as with respect to the necessary continuity of this important segment of the European audiovisual industry, it is recommended that the resolution as adopted at the 4th European Mass Media Conference (Prague 1994) will be a guiding instrument for member states and the European Commission when addressing this matter.
    • priority should be given to reaching legal certainty within the scope of the present Treaty and, if necessary, the revising of the Treaty with a particular focus on Articles 3, 92, and 128 (4).
    • A Protocol attached to the final text of the Treaty, to be concluded in Amsterdam, or a solemn Declaration regarding the public service broadcasting in Europe, should be likewise considered. The Dutch Presidency is requested to put proposals for this on the agenda of the coming informal meeting of the Council of Ministers of Cultural and Audiovisual affairs.
    1. Commission - Spanish decoders
On 31 January, the Spanish government approved a regulation that requires decoders provided by different companies to be compatible. However, it seems that the Commission has advised Spain to rethink its law warning it that regulations on decoders are against Community rules. However, the Commission has agreed two of the provisions: that each satellite decoder should have a counter to indicate how much the consumer has to pay and that consumers should be free to choose the decoder of their own choice.

The Spanish digital group Canal Satellite has filed two complaints with the Commission. It claims that the government’s regulation will help a government backed operator whilst making it difficult for Canal Satellite to enter the digital satellite market. It also objected to public aid being given to a competitor.

    1. EP - Internet Communication
Peter Pex, the new Chairman of the Culture Committee has drafted a report on the Commission Communication on illegal and harmful content on the Internet. The Report notes that:
    • too many Commission’s DGs are involved in the debate and as a result the Commission is publishing a considerable number of documents on the information society;
    • measures to combat illegal and harmful material on the Internet do not need to be of a specific character as the Internet’s advantage is that the user or the user’s parents can make it impossible to access this material. The Rapporteur therefore stresses the role of self-regulation and that legal measures would only offer support to it;
    • the Internet can link up to e-mail or newsgroups and might be used for re-mailing activities. Some individuals may, with legitimate reasoning, choose to remain anonymous in such situations, and the European Convention on Human Rights affirms that right to the secrecy of correspondence.
Accordingly, the Rapporteur has proposed amendments to the Communications which :
    • emphasises that Internet concerns do need to be addressed but these should not prevail over the actual and potential cultural revolution made possible by the Internet;
    • emphasises the fundamental distinction between illegal and harmful content;
    • calls for self-regulation initiatives and the establishment of a European-ratings system to make parental control easier;
    • emphasises the parental role;
    • emphasises that harmful content on the Internet poses a similar problem to those posed by traditional modes of communication but that the harmful content on the Internet can be blocked more easily;
    • call for the Commission to pursue co-operation between the EU, the G7, the OECD, the WTO and the UN to prevent safe havens for illegal documents;
    • call for access and service providers’ liability to be regulated at the international level;
    • proposes that horizontal political co-operation be matched by vertical co-operation between decision-makers, industry, access and service providers and users’ associations.
The Committee postponed discussion to a later meeting.
    1. EP - Green Paper on living and working in the information society
On 22 January, the EP Social Affairs Committee discussed the Green Paper. The Rapporteur Mr. van Velzen, (EPP, NL), said that the Green Paper effectively covered the employment aspects of the information society but nothing else. Like Mr. Pex’s in his report on the Internet, the Rapporteur also called on the Commission’s DGs to integrate their approach and work on the information society.

The Economic and Monetary Affairs Committee has also been examining the Green Paper, and on 22 January adopted a critical Opinion which:

    • deplores that fact that the Green Paper does not clarify the term "information society";
    • comments that the Green Paper offers no substance to its very general concepts and offers no detailed proposals for political action;
    • comments that the Paper concentrates on the technical and economic aspects of the information society - rather than the objectives of its title;
    • comments that the Paper does not discuss in sufficient detail the implications for and the demands on society - saying that the Reports by the High Level Group of Experts and the Information Society Forum are more balanced and make valid points which the Commission has not taken on board (such as that growth and employment in the telecommunications sector has been considerably lower than that predicted by the White Paper on Growth, Competitiveness and Employment);
    • says that the Paper draws no conclusions on its comments on education and does not make a distinction between data, information and knowledge;
    • says that the Paper does not pay sufficient attention to issues such as data protection, privacy and consumer protection. EMAC suggested the creation of a European data-protection Institution with a European data protection representative and a consumer protection institution to provide effective protection for cross-border purchases.
In the Culture Committee discussion, the draftswoman (Armelle Guinebertiere, UPE, F) pointed out that no distinction was made in the Green Paper between the information society and information technology. She said that it was crucial that EU citizens have up to date and independent information so as to be able to act in a business or social environment as quickly and efficiently as possible and spoke of the threat of a two-speed society developing with regard to different generations and their appreciation of information technology. Mrs Guinebertiere also made the following points:
    • the Green Paper did not contain enough provisions to deal with the international organisation of labour, including social dumping;
    • structural funds should be used to improve training and education to allow for easier access to new technology;
    • the Commission should encourage exchanges between different training schemes in different Member States.
The Legal Affairs Committee draftswoman, Mrs Maria Berger, made the following points during her Committee’s discussion:
    • there must be legal certainty in the information society;
    • access to law and public services must be guaranteed and developed;
    • there was a need for a "universal law of the information society".
    1. Information society regulatory transparency mechanism initiative
In the Council, the French Government is trying to block further progress of this directive and has gained the tentative support of the UK. A coalition of industry bodies will be making representations to the Council in support of the initiative from the Commission. Meanwhile, the EP has nominated the Economic and Monetary Affairs Committee to lead and has appointed Mark Hendrick (PES, UK) as Rapporteur. The Committee timetable will be:
    • consideration of draft report: 19-20 March;
    • adoption in Committee: 16-17 April;
    • adoption by the EP at the May II Plenary
The advisory committees are Culture (draftsman: Phillip Whitehead, PES, UK) and Legal Affairs (draftsman, Enrico Ferri, UPE, Italy).

The timetable in the Legal Affairs Committee is as follows:

    • consideration of draft Opinion: 26 February;
    • adoption in Committee: 19 March.
The Culture Committee’s draftsman, Philip Whitehead, offering an opinion to the Economic Committee said that while he welcomed the initiative he had also identified some failings:
    • it ignores cultural matters - some degree of leeway is necessary in the interest of preserving national cultural identity;
    • it paid little attention to the Culture Committee discussions on the Broadcasting Directive. He felt that if the review of the Broadcasting Directive results in its scope extending to on-demand services, then on-demand services should not be covered by this Directive.
His report therefore proposed amending the recitals to take note of:
    • Member States’ own measures designed to preserve cultural identity and diversity;
    • the Commission’s Green Paper on the development of cultural aspects of the new services (possibly to be followed by proposals);
    • the proposed Directive should be without prejudice to the scope of any future Directives on the cultural aspect of new services, particularly on-demand TV which he sees as comparable to TV broadcasting.
    1. Commission - Hearing on Green Paper on the Protection of Minors and Human Dignity in Audio-visual and Information Services



      On 5 February, the Commission held a Hearing on its Green Paper on the protection of minors and new services. The hearing was not well attended and there was a predominance of public service broadcasters present. Throughout the debate the Commission emphasised the distinction between harmful content and illegal content. However, there was a worrying level of support for mandatory content ratings particularly from the public service broadcasters. Also the consumer groups started raising their concerns over the growing blurring of editorial and commercial messages. A full report of the Hearing is available upon request (already circulated to EPC members).

    3. EP Committee - Green Paper on the Protection of minors



      The EP Culture Committee has appointed Philip Whitehead (PES, UK) as the Rapporteur on the Commission’s Green Paper on the Protection of Minors and Human Dignity in Audiovisual and Information services. The Committee will hold a first exchange of views on 18 March.

      The Civil Liberties Committee will offer the only Opinion which will be drafted by Malou Lindholm (V, Sweden).

    5. WTO - telecomms agreement
On February 15, the first global pact on the deregulation of basic telecommunications markets at the World Trade Organisation in Geneva was signed. The pact opens up the traditional telephony sector and the electronic data transmission (voice, images and sound), telex and fax services to competition, covering all means of transmission: cable, fibre optics, hertz frequencies and satellite. The Agreement also lays down ground rules for telecommunications companies seeking to invest abroad. The Agreement will leave the European Union plans for the liberalisation of telecommunications unchanged.

However, the EU has noticed that the US has attached a restriction to audiovisual satellite broadcasts, designed to bar Canadian satellite operators from transmitting television programmes to American homes. The EU believes the United States' position constitutes a breach of commitments made during the Uruguay GATT Round. The final GATT Agreement did not cover the content of messages transmitted, since basic telecommunications, the object of the negotiations, consist of the signals transmitted in real time. Apparently, the fact that the audiovisual question has been raised presupposes an interest in the content of the message (broadcast of films). The US has, however, made attempts to reassure the EU that such a measure will under no circumstances be foisted on the EU.

    1. FERA - OECD agreement on investment
    The Federation of European Film Directors is concerned that the OECD negotiations for the conclusion of a Multilateral Agreement on Investment (MAI) will include intellectual property. It believes that the implementation of national treatment and most-favoured nation status would result in the dismantling of existing European audiovisual policy and threaten national support systems. It claims that the MAI would be in direct conflict with WIPO and WTO.

    FERA has called on all European members of the OECD to call for the exclusion of intellectual property from the scope of the MAI.

    1. EP Legal Affairs Committee - commercial communications
On 22 January, the EP Legal Affairs Committee adopted its Opinion on the Commercial Communications Green Paper. Included in the amendments were:
    • that "the ‘country of origin’ principle cannot be the general basis for action";
    • Article 100a should be the legal basis governing commercial communications;
    • an amendment stating that: "In order to avoid the legal uncertainty resulting from the caustic application of the proportionality principle, secondary legislation might be required to remove some of the identified obstacles pursuant to Articles 30 and 59 of the Treaty, and to guarantee a high level of protection for consumers, young people and other public interests";
    • considers that a suitable vehicle for such guidelines could be a communication adopted with a view to the completion of the internal market, which could have a multidisciplinary approach. An assessment should be made of the implications of the principle of subsidiarity;
    • an amendment stating that "Although the proposed method of evaluating the proportionality principle is a sound one, the legal scope thereof needs to be determined and it must be combined with an assessment of other policies as well";
    • the committee must establish the legal nature and scope of the committee and it must include representatives of the commercial communications sector , consumers representatives and the EP;
    • the proportionality assessment procedure should under no circumstances entail an extension of the normal deadline by which the Commission takes its decisions.
The lead Committee EMAC, will not adopt its Report until March.
    1. EP EMAC - Commercial Communications
On 4 February, the EP Economic and Monetary Affairs Committee discussed Mrs. Larive’s (LDR, NL) Working Document on Commercial Communications. She introduced the debate by explaining that the purpose of the Green Paper was to create an Internal Market in Commercial Communications and that the two basic principles which underlay the approach she had taken were:
    • Country of Origin and Mutual Recognition.
She went on to say that:
    • any barriers to a genuine market in Commercial Communications have been created because of national rules which were based on issues such as "general interest" or "public health";
    • the removal of barriers should be on the basis of assessing proportionality so that the genuine barriers could be differentiated from the bogus ones which were used as a form of protectionism. Proportionality assessments needed to be fast and efficient.
    • she was in favour of self-regulation. However, there might be a need for framework legislation to achieve these changes in national law satisfactorily.
Mr Herman (PPE, B) commented that:
    • legislation on commercial communications differed so widely between Member States that the Internal Market was adversely affected. He was sceptical that the proposals made in Mrs Larive's working document would be enough to improve matters to the desired degree. He said that a framework Directive would not be enough either - new detailed legislation was necessary. He added that he did not think that the European Court of Justice would be the best place for assessing proportionality and questioned the need for a shadow committee as outlined in Mrs Larive's working document.
Mrs Peijs (PPE, NL) said that:
    • she did not know how Mrs Larive intended to legislate without legislation?
    • Mrs Larive was being "too Dutch" in wanting to set up more than one committee. This might be acceptable in the Netherlands but not at EU level. She thought that the European Advertising Standards Alliance (EASA) should be the guiding instrument. If there was a need for consultation, this should be done with the industry directly through its existing professional bodies.
Jean Bergevin, the author of the Commission’s Green Paper (DG XV) then spoke. Replying to Mr Herman, he said that the measures proposed in the Green Paper did not preclude going further in a legislative sense than the measures suggested in the Green Paper. However, the course of action chosen would still need proportionality assessments. A Member State should have to justify its position if it was restricting a service which should be part of a genuine Internal Market.

He added that given the numerous different barriers identified by the Commission’s survey, a framework Directive would not be sufficient. It may be necessary to target harmonisation on specific barriers as the information society could result in new barriers - such as on-line advertising.

Mr Donnelly (PSE, UK) then asked Mr. Bergevin why, if there was a problem with on-line advertising, there was no specific Green Paper referring to it and why it had taken so long for the Commission to address commercial communications in general? He added, however, that he did not want many new rules and regulations.

Mr Arroni (UPE, I) said that the proportionality assessment was designed to differentiate between the genuine and bogus reasons for barriers. He believes that most of the barriers are forms of protectionism specifically referring to bans on advertising aimed at children.

The Committee will now discuss the draft report on 19-20 March; the deadline for amendments will be 3 April and they anticipate voting on the Report at the May Plenary Session.

    1. EP Culture Committee - Commercial Communications
On 5 February, the Culture Committee discussed the Green Paper. The Rapporteur, Mr. Aldo Arroni introduced his draft Opinion which focuses on how a more effective Internal Market could assist with the promotion and funding of cultural and sporting activities, particularly those aimed at the young. Sponsorship and patronage would be key techniques for meeting these objectives.

Mr Arroni gave some examples of the barriers experienced when using cross-border commercial communications. He cited children (in particular toys); alcohol; tobacco; and foods as suffering particularly from cross-border barriers to advertising. He also said that he supported the Green Paper’s solution of proportionality assessments. His focus on sponsorship and patronage as ways of both promoting and raising funds for sporting and cultural events was, he said, an appropriate focus for the Committee of Culture’s Opinion. The "real substance" would be left to the (lead) Committee on Economic Affairs.

Included in the debate that followed were the following comments:

    • Hugh Kerr (PSE, UK): said that he did not oppose private sponsorship of cultural or sporting events but said that the profits of multi-national companies were at an all time high and their sponsorship of cultural events had not increased to the same degree as their profits.
    • Carole Tongue (PSE, UK): wanted to know the extent to which increased sponsorship would lead to an improved quality of independent television as she said that it was only those programmes with very large audiences which tended to attract sponsorship.
    • Philippe de Coene (PSE, B): said that he had worked in the advertising industry and that sponsorship of sports events and cultural events were completely different - a distinction which he felt had not been made in Mr Arroni’s draft Opinion. He added that advertising tended to be better when the rules were stricter.
The Chairman, Peter Pex (EPP, NL), concluded the debate by setting the deadline for amendments as 12 February in order to vote on the Opinion on 26 February. Mr Pex regretted that the Commission official present was unable to comment due to lack of time. He said that the meeting of 26 February would include a full debate, an intervention by the Commission official and a full debate on the amendments as well as the vote.
    1. EP Environment Committee - Commercial Communications



      The discussion of Mr Lehne’s (PPE, D) draft Opinion was very brief. The deadline for amendments was 14 February.

    3. Council - comparative advertising
The Council, Commission and EP Rapporteur on the comparative advertising text will hold their first trialogue meeting on 24 February.

It seems that the remaining contentious issues to be negotiated in the trialogue and conciliation meetings are:

    • the issue of voluntary control by self-regulatory bodies;
    • the EP’s inclusion of "personal qualities or circumstances" rather than "professional";
    • we understand that both the amendment wholly endorsing self-regulatory bodies and the amendment making reference to subsidiarity in light of the self-regulatory body may require substantial negotiation between the institutions to reach a wording satisfactory to all parties.
    • the issue of professional services is again addressed in light of self-regulatory systems.
    1. Council - Tobacco advertising



      On 10 February, the Commission presented its Communication on a Community policy for tobacco to the Health Council Working Group. The delegates did not discuss the issue in depth (only a few minutes apparently) and the Dutch Presidency has only scheduled one further Working Group discussion on the matter before the 5 June Health Council.

      However, the Council position may change following the UK general election. If the Labour Party win, the UK is likely to support the Commission’s tobacco advertising proposal. Discussions on the proposal might then recommence in Council with a view finally to adopting a Directive.

    3. EP - tobacco advertising
The EP has called on the Environment Committee to draft the EP Report (Rapporteur: Mr. Jose Luis Valverde Lopez PPE, E) on the Commissions Communication on the present and proposed Community role in combating tobacco consumption. Both the Culture Committee and the Economic Committee will draft Opinions for the Environment Committee.



    On 5 February, the Economic and Monetary Affairs Committee of the Parliament took at look at the Commission’s proposals for a common VAT system and agreed to invite business representatives to their next discussion on 19-20 March. So far the MEPs have said that the standard rates of VAT do not need to be harmonised, but that reduced rates should be. The Rapporteur wants the large number of different reduced rates to be restricted to one harmonised, binding reduced rate. The Rapporteur also wants a public campaign to convince citizens that an EU VAT system will not amount to a "EMU tax".

    1. Commission - distribution deal
The Commission has approved the acquisition by the Dutch paper company NV Koninklijke KNP of two paper distributors of the group Bunzl - Wilhelm Seiler and Bunz Italia.

The deal will make KNP one of the major players in the German and Italian markets but the Commission did not consider it will result in a dominant position.

For further information please contact:

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