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Legislative up-date no. 59 Month - March 1997

In this issue we cover:

  • Further delays on media ownership
  • MEPs take a look at VAT harmonisation
  • MEPs discuss the future regulation of advertising
  • MEPs consider how to regulate the Internet



    1. Commission: media ownership
    2. Commission - BT/MCI deal
    3. Commission - UIP pay-TV joint venture
    1. Conciliation negotiations - Broadcasting Directive
    2. Council - Informal Culture/Audiovisual Council
    3. EP - Sports rights
    1. EP - harmful and illegal content on the Internet
    2. EP - Green Paper on the Protection of Minors and Human Dignity

    1. Council - regulatory transparency in the internal market for information society services
    2. EP - regulatory transparency in the internal market for information society services
    3. EP - Green Paper on Legal Protection for encrypted services in the Internal Market
    4. Commission - policy priorities in the information society
    1. EP - Green Paper on Commercial Communications
    2. EP - Communication on the present and proposed Community role in combating tobacco consumption
    3. Dutch Health Minister - tobacco
    4. Council considers the Communication on tobacco policy
    5. EP looks at discrimination against women in advertising
    1. Simpler Legislation for the Single Market (SLIM): A Pilot Project

General Enquiries: Angela Mills

Telephone: +44 (0)1865 310 732

Facsimile: +44 (0)1865 310 739

Press Enquiries: Heidi Lambert


    1. Commission - media concentration



      The Commission has not yet agreed a text for a draft Directive on media ownership. The current draft still sets threshold levels at 10% for multi-media and 30% for mono-media whilst allowing a ten-year derogation for implementation by the member states. However, it has been suggested that the text will be amended with the deletion of the 10 year derogation period and that the 10% multi-media threshold may be raised. The proposal is still at cabinet level but Commissioner Monti is holding meetings with his colleagues to garner support. The 10% multi-media threshold is becoming the focus of negotiations but the text is not likely to get through to the Commission agenda end April/early May.

    3. Commission - BT/MCI deal



      Karel Van Miert, the Competition Commissioner has said that the Commission will approve the merger between BT and MCI if the companies confirm their proposed "remedies to competition problems".

    5. Commission - UIP pay-TV joint venture
    UIP a joint venture between Paramount Pictures International, MGM and MCA for pay TV will be disbanded over the next 18 months. The decision has been taken following a Commission decision which said that the agreement restricted competition.
  2. VAT
EP holds Hearing on VAT

On 19-20 March, the EP EMAC held a short, rather inconclusive, public hearing on the Commission’s proposed common system of VAT. The Hearing was held to discuss Mrs. Christa Randzio-Plath’s draft report on the matter which is scheduled to be adopted by the Committee on 21 April. Sir Frank Rogers had written to members of the Committee prior to the hearing about the publishers call for zero rating for press.

Evidence was heard from UNICE, the ETUC, EuroCommerce and the European Fiscal Confederation. The invited speakers indicated their support for the proposed common system but some felt (particularly UNICE and the ETUC) that it would be difficult to achieve.

Some MEPs went further and said that, given the present political framework, the EU would be better off concentrating on improving the present (transitional) VAT system. This strategy was, however, contested by the Euro-Commerce speaker and the Commission.

There was consensus amongst the invited organisations that the Commission was right in advocating the common VAT system, based on the country of origin system.

However, commenting that he did not think that the common system would be introduced for a "long time", the UNICE representative called for improvements in the meantime to the transitional system.

    • Of the MEPs who spoke in the debate, the Socialists were the most cautious about the introduction of a common VAT system. Alan Donnelly (PES-UK) said that a move towards a common system was not appropriate at the moment. Ways of improving the present system should be examined instead.
    • Alman Metten (PES-NL) expressed doubts about the prospects of achieving real progress towards a common system for at least 10 years. He saw the main priority as improving the current system.
    • Christa Randzio-Plath (PES, Germany), said that one of the main problems which needed addressing was that of exemptions. She added that she agreed that a solution would not be found before the end of the decade. She also said that it was important to improve the current system.
    • Bryan Cassidy (EPP-UK) felt that a common VAT system was long overdue as the current system placed "enormous burdens" on firms. He felt that some member states were sheltering behind the difficulties caused by the present system. Mr Cassidy was the only MEP to state that a common system did not imply complete harmonisation of VAT rates.
    • Graham Watson (ELDR-UK) regretted that no representatives of SMEs were present. He said that SMEs might not favour another major change as they were just beginning to get used to the present system. He referred to problems with the interpretation of the Sixth VAT Directive and added that the Commission would probably not want attention drawn to these.
The EP is due to adopt its Opinion on the Communication at the May Plenary Session for which EPC will send a briefing on publishers’ views.
    1. Conciliation negotiations - Broadcasting Directive
There has been little substantial progress on the negotiation of the Broadcasting Directive during March. The EP appointed its Conciliation team:
    • Mr. Verdi I Aldea (Vice-President, PSE, E)), Mr. Imbeni (Vice-President, PSE, I), Mrs. Tongue (PSE, UK), Mr. Barzanti (PSE, I), Mr. Whitehead (PSE, UK), Mrs. Kuhne (PSE, D), Mr. Fontaine (Vice-President, PPE, F), Mr. Galeote (PPE, E), Mr. Pex (PPE, NL), Mr. Hoppenstedt (PPE, D), Mrs. Pack (PPE, D), Mr. Monfils (LDR, B), Mr. Arroni (UPE, I),Mr. Tamino (V, I) and Mrs. Castellina (GUE, I);
which then postponed the first scheduled meetings as the text had not been translated into all languages! However, a Trialogue meeting (Council Presidency, Commission and EP) was held on 18 March, when the EP delegation laid down certain markers on sports rights and the V-chip where they felt the Council had not taken their views fully into account.

The EP has now requested that the first Conciliation meeting take place on 15 April.

    1. Council - Informal Culture/Audiovisual Council
An informal Culture/Audiovisual Council will be held on 6-8 April in Maastricht. The Dutch Presidency is very keen to focus on:
  • the extent to which, during the IGC, the role of culture should be strengthened under the Treaty (Art 128/4);
  • the emphasis which should be given in the Treaty to the role of public service broadcasting.
    1. EP - Sports rights
On 19 March, the EP Culture Committee held a Public Hearing on Sports Rights. The speakers included Jean Bernard Munch - Secretary General EBU, Vic Wakeling, (Head of Sport at BSkyB) and Per Omdal of UEFA. All but the BSkyB representative agreed that member states should draw up lists of major sports events to be broadcast free to the public. Both BSkyB and UEFA pointed out the benefits that channels devoted to sport offered to both the sports themselves and the viewers and UEFA stressed the need for self-regulation. The BSkyB representative stated that the listing of events artificially restricts the income to the selected sports.

Berend Jan Drijber, of the Commission’s Legal Services made the following comments:

    • in legal terms, the drawing up of a list of events would be a restriction to the free provision of services within the meaning of article 59 of the Treaty. As such, a full justification would be needed, perhaps in terms of public’s rights to access to information. However, any such restriction also needs to be proportional.
    1. EP - harmful and illegal content on the Internet
On 26-27 February, the EP Culture Committee adopted its Report (drafted by Peter Pex PPE, NL) on harmful and illegal content on the Internet. The Report predominantly:
    • emphasised that measures taken to address the problems should not prevail over the actual and potential cultural revolution made possible by the Internet;
    • highlighted the distinction between harmful and illegal content;
    • highlighted the role of parents;
    • emphasised that the Internet at least allows for the use of effective filtering systems;
    • emphasised international cooperation.
The Civil Liberties Committee has also adopted a Resolution on 26 March which emphasises the right of free communications and free expression and calls on the IGC to make the necessary changes to Community law to enable the EU to accede to the European Convention on Human Rights.
    1. EP - Green Paper on the Protection of Minors and Human Dignity
The EP Culture Committee agreed the following timetable for Mr. Whitehead’s Report:
    • April - initial exchange of views;
    • May - first Committee discussion of report;
    • Deadline for amendments (to be fixed);
    • June - Vote on Mr. Whitehead’s report in Committee;
    • July - EP Plenary, Strasbourg (not final).
During debate in the Committee on the Commission’s Communication on "Combating Child Sex Tourism" Swedish Socialist MEP Brigitta Ahlqvist called for the protection of children to be incorporated into the new Treaty within the framework of the Inter-Governmental Conference. She added that none of the three existing Treaties contained any action to protect children and that Swedish negotiators had been pushing to include such protection in the legal framework of the EU since accession.
    1. Council - regulatory transparency in the internal market for information society services
The proposal (which amends an existing Directive for goods) requires prior notification of national regulations on new services by member states to the Commission. Discussions to date have revealed the following member state positions:
    • France: is taking a negative attitude towards the Proposal as it is particularly concerned about the impact on its audio-visual sector as France would be obliged to notify the Commission of any new national measures to protect their home market. France also believes that the definitions contained in the Proposal need to be improved.
    • Belgium: is concerned that: the stand-still periods outlined in the proposal are too long for a fast-changing environment like information services; the need to defer national legislation for a year after the Commission had stated that it intended to propose community measures in a particular area is far too long.
    • Denmark, the Netherlands and Sweden: feel that the mechanism itself could be a possible barrier to trade which would hinder the free movement of services. It seems that Denmark would like to see a parallel Directive which focused on services rather than amendments to the existing Directive on products.
    1. EP - proposal for a regulatory transparency mechanism for information society services
The lead Committee, EMAC, held an exchange of views on 19-20 March. Introducing his draft Report, Mr Hendrick (PES, UK) called for the creation of a specialist committee for this sector involving all interested parties, for example, industry, users and consumer groups.

Mr Cassidy (EPP-UK) and Mr van Velzen (EPP-NL) were doubtful that the Commission’s definition of services went far enough. Mr van Velzen added that the Committee should try to avoid getting into a ‘TV without Frontiers’ type debate. The Rapporteur replied that his list of services should not be taken as exhaustive. He did not want to prejudge the TV without Frontiers debate in Conciliation, particularly with regard to the stance which the Parliament would be adopting in the negotiations.

The EP timetable is now as follows:

    • deadline for amendments: 3 April;
    • adoption of draft Opinion: 22 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 Culture Committee approved its Opinion at its 26-27 February meeting. It emphasised that culture must always be considered in cases of member state legislation which allowed for the preservation of national culture and European cultural diversity.

    1. EP - Green Paper on Legal Protection for encrypted services in the Internal Market



      The Legal Affairs Committee (lead) draft Report by Georgios Anastassopoulos (EPP, Greece) was adopted on 24 February.

      The issue of greatest concern is the damage created by pirate decoders - and the fact that they seem to be widely advertised. However, the second problem is that the technical control of piracy is difficult as each technical breakthrough can be circumvented by another.

      The Committee accepted amendments which took into account cultural pluralism and the aspect of access to the information.

    3. Commission - policy priorities in the information society
DG XIII has now published a document called "Europe’s Rolling Action Plan for the Information Society" (circulated to EPC Members in January) which details a series of policy initiatives which the Commission intends to undertake during 1997. In the section "Forthcoming action" it listed:
    • Communication on an internal market framework for new on-line commercial communications based on home country control and mutual recognition - during 1997 (follow up to Green Paper on Commercial Communications);
    • Directive on the access to media ownership - during 1997;
    • Directive on the harmonisation of certain authors’ rights and related rights - during 1997;
    • Directive on the legal protection of encrypted services - first quarter of 1997;
    • Green Paper on the implications of the regulatory framework for telecommunications, audiovisual and publishing - during 1997.
    • Communication on a guide to the regulatory framework of the information society) - during 1997;
    • Communication and Directive on secure transactions including digital signatures in electronic commerce - first quarter of 1997;
    • Communication on a European standardisation initiative for electronic commerce - during 1997.
    1. EP - Green Paper on Commercial Communications
Both the EP Environment and Culture Committees adopted their Opinions on the Green Paper on 27 February.

Mr Lehne’s (D, PPE) Environment Committee Opinion was adopted with 23 amendments. His draft Opinion stated that:

    • the focus of the Green Paper was not primarily concerned with economic matters (this view is in strong contrast with that of the Commission official responsible - Jean Bergevin, DGXV - and Aldo Arroni, the draftsman whose Opinion was adopted in the Culture Committee on the same day);
    • the main purpose was to harmonise advertising law and this should be welcomed;
    • it was not reasonable that a product should be banned in one place but permitted in another. The same was true for other commercial communications (he quotes discounts and free gifts);
    • consumers should be confronted with a maximum degree of harmonisation in the field of advertising within Europe;
    • great care should be taken to ensure that the subsidiarity principle was not infringed;
    • special rules governing the professions should be excluded from harmonisation;
    • the Commission’s approach of paving (via the Green Paper) the way for a consistent policy in the field of advertising law is welcome.
As his Opinion was relatively brief the majority of the amendments adopted proposed new text rather than amendments to Mr Lehne’s existing text. Many of the amendments addressed consumer protection, advertising to children and restrictions on sectoral commercial communications including food, drink and tobacco products.

The following are some of the adopted amendments:

    • Country of Origin/mutual recognition:
      • Amendment 4: Oomen-Ruijten (NL, PPE): national provisions that protect consumers, establish their rights or promote their interests must not be challenged as barriers to the single market.
      • Amendment 21: Blokland (NL, EDN): basic principle should be to retain protective rules based on national cultural differences.
      • Amendment 1: Pollack (UK, PSE): Central analysis of the GP should be reviewed based on, amongst others, the need to achieve a balance between home country and host country control.
      • Amendment 18: Whitehead (UK, PSE): Commission should not seek to undermine the level of protection offered in any MS, in particular regards children, restrictions related to societal values, alcohol, tobacco, pharmaceuticals and financial services. Articles 59 and 169 of the Treaty provide adequate channels for dealing with national regulations which pose serious barriers to trade.
    • Consumer Protection
      • Amendment 17: Whitehead (UK, PSE): DG XXIV and consumer organisations should play an integral role in the overall appraisal of policy-making in field of commercial communications;
      • Amendment 2: Oomen-Ruijten (NL, PPE): correct balance should be sought between free flow of information and consumer protection.
      • Amendment 14: Blokland (NL, EDN): notes that in the Green Paper the emphasis is more on removing barriers to suppliers of commercial communications than on the interests of consumers.
      • Amendment 32: Whitehead (UK, PSE): calls on the Consumer Affairs Council to hold discussion on consumer issues arising out of this GP.
    • Children and advertising
      • Amendment 5: Oomen-Ruijten (NL, PPE): Commission should bring forward specific measures on children and commercial communications (especially in view of the new technologies;
      • Amendment 7: Papayannakis (GR, GUE/NGL): Commission should bring forward as a matter of urgency a proposal for framework legislation to protect children in relation to all types of commercial communications covering all products and all methods of communication;
      • Amendment 8: Whitehead (UK, PSE): Commission should bring forward more detailed assessment of the effects of commercial communications on children.
    • Sectoral commercial communications
    • Amendment 22: Whitehead (UK, PSE): in the interests of cultural diversity and in recognition of the different regulatory/self-regulatory mix in the Member States, the Committee considers that the Commission should not seek to undermine the level of protection offered in any member state in particular as regards: commercial communications to children; restrictions on commercial communications for reasons related to societal values; commercial communications for pharmaceuticals, financial services, alcoholic beverages and tobacco products;
    • The Committee also believes that Articles 59 and 169 of the Treaty already provide adequate channels for dealing with national regulations which pose serious barriers to trade.
    • Amendment 25: Whitehead (UK, PSE): Commission should consider questions of restrictions on commercial communications of food products in its forthcoming GP on food policy.
    • Amendment 26: Kestelijn-Sierens (B, ELDR): hopes for speedy adoption by Council of a proposal to ban advertising of tobacco products.
    • Proportionality
    • Amendment 23: Whitehead (UK, PSE): main obstacles to single market flow from cultural differences rather than those in regulatory structures. The Commission should assess proportionality with an approach based on need to achieve balance between home country and host country control, the need to combat market opening objectives with the maintenance/improvement of standards and the need to blend legislation and self-regulation to an extent that reflects the cultural differences of MS.
    • Amendment 12: Whitehead (UK, PSE): proportionality method is limited in scope. Commission should reconsider assessment methodology as it omits the role of consumers
    • Unfair Marketing Practices
      • Amendment 28: Whitehead (UK, PSE): Commission should develop overall framework for regulating unfair marketing practices
      • Amendment 29: Pollack (UK, PSE): Commission should develop overall framework for regulating unfair practices
    • Consultative Committee
      • Amendment 30: Whitehead (UK, PSE): Committee should include consumer representation, be transparent in structure, publish minutes and agendas and report on regular basis to EP.
    • Enforcement
      • Amendment 6: Pollack (UK, PSE): Commission should concentrate on effective enforcement of legislation, particularly in cross-border cases
The Culture Committee Opinion was drafted by Aldo Arroni, (UPE, I). His draft Opinion concurred with the Commission’s view that regulatory differences between Member States may result in the emergence of new barriers following the growth of cross-border communication services and the development of the information society. It also endorsed the Commission’s approach with regard to the method of evaluating proportionality. It emphasised the need to accelerate the Community procedures for taking action where the free movement of services and of Commercial Communications is obstructed.

Most of the key points made in Mr Arroni’s draft Opinion - in support of sponsorship, patronage and cultural activities, as well as the amendments tabled by Mr Arroni - were adopted by the Committee.

The main amendments adopted included:

    • Consumers/children
      • Amendment 13: Kokkola (GR, PSE): Any initiative to promote the single market in Commercial Communications should take into account need to protect consumers, especially minors.
    • Sponsorship/Patronage
      • Amendment 14: Arroni: Sponsorship should be considered a priority in areas authorised under TWF.
      • Amendment 20: Arroni: differences in MS approaches to sponsorship/patronage relate to fiscal implications.
      • Amendment 22: Kokkola (GR, PSE): Commission should take into account growing role played by sponsorship in relations between museums and other artistic activities.
      • Amendment 16: Arroni: Commission should undertake study of sponsorship and patronage in close co-operation with cultural, sports and philanthropic organisations to analyse impact of such activities in EU
The timetable is now:
    • April 4: revised report by Jessica Larive (NL, ELDR) will be available in all languages;
    • April 21-22: report presented to EMAC;
    • early May: deadline for amendments;
    • May 21-22: adoption of report in EMAC;
    • June 9-13: Plenary I Session: probable adoption of report in Strasbourg.
    1. EP - Communication on the present and proposed Community role in combating tobacco consumption
On 27 February, the Culture Committee adopted an Opinion on Commissioner Flynn’s Communication in the form of a letter signed by committee chairman, Peter Pex (EPP, NL). The Opinion supported the Commission’s recommendations, particularly:
    • the need to develop a code of practice on the right to a smoke-free environment for children;
    • the proposal to limit sponsorship by tobacco manufacturers of major sporting, musical and cultural events which are likely to be televised.
The Opinion also advocates a pilot scheme in the mass media involving European leaders against passive smoking, in which political leaders, leaders of social groups, scientists and artists will undertake not to smoke in public.

The EP Committee on the Environment is the lead Committee on this dossier. However, it has not yet appointed an administrator within the secretariat to assist with the committee’s preparation of a draft Report in response to the Commission’s Communication. A planning meeting was held after the last committee meeting of 18-20 March and the appointment was due to have been made then. The decision was, however, deferred.

The Rapporteur, Jose Luis Valverde Lopez (EPP-Spain), has not yet started drafting his report. The item is not on the agenda - even as for an initial exchange of views - at the next committee meeting of 15-16 April.

    1. Dutch Health Minister - tobacco
The Dutch Health Minister, Mrs Borst, spoke to the Environment Committee on 25-27 February. She said that she found the Commission Communication a good basis for discussion, that the issue should be dealt with gradually. She also said that:
    • the Commission Communication had come up with interesting ideas;
    • the Council would look particularly closely at the possibility of a ban on smoking in public places;
    • the outcome of the UK elections may have an influence on the draft Directive on a tobacco advertising ban.
    1. Council considers the Communication on tobacco policy



      Following two Council Working Group discussions on the Communication in February, the Dutch Presidency will draft a Resolution to present to the June Health Council. This will include a paper re-capping member states’ positions on the various options set out in the Communication. This paper could then act as a steer to the Commission for future action although it is most unlikely that it will contain a request for binding legislation.

    3. EP looks at discrimination against women in advertising
The EP Women’s Committee held a brief debate on this matter based on an own-initiative report by Marlene Lenz (EPP, D) at its 24/25 February meeting. That brief discussion has led the Committee to consider an examination of the current regulatory situation on the role of women in advertising within each member state. This will be reported upon when the Committee meets on 16-17 April.
    1. Simpler Legislation for the Single Market (SLIM): A Pilot Project
On 25 February, the Committee on Legal Affairs discussed the draft Report prepared by Mr. Brian Crawly (UPE, IRE) on the SLIM initiative which is designed to streamline legislation. When presenting his report, Mr. Crawly made the following points:
    • it was important (given the low success rate of the SLIM project to date) that the really important issues be focused on - both at institutional and MS level;
    • the role of legislative bodies should be co-ordinate both at institutional and EU level;
    • Internal Market rules should be made easy;
    • four more areas should be included within the scope of the SLIM project: citizens, consumers, enterprises, Single Market. This was important so as to help close the "democratic deficit" because by simplifying these laws, people would find them easier to follow.
Mr Cot (PES, F) asked the Commission representative whether this pilot project was the first step towards a bigger Commission project. He asked about the nature of the project, how long it was going to last and what logic had been chosen when choosing those 8 areas of simplification.

In response, the Commission representative said that the EU and MS legislation was too complex and that, as a result, they were preparing a plan of action for simplification. SLIM would be included within this bigger simplification action plan whose guidelines would be unveiled during the Dutch Presidency.

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