Legislative update 76. Month - March 1999

1. ELECTRONIC COMMERCE

1.1 Council working group still has no position
1.2 European parliament lead committee due to adopt report end-April
1.3 European Parliament's supporting committees all adopt opinions
1.4 Competitiveness of e-commerce - Commission delays adoption of Communication. Hearing 8 April
1.5 Council nears agreement on e-signatures
1.6 OECD draft guidelines on consumer protection in e-commerce

2. CONVERGENCE
2.1 Commission adopts follow-up Communication on convergence
2.2 Telecoms and Culture Councils due to adopt "conclusions" on Commission paper

3. INTERNET (CONTENT) REGULATION
3.1 Safe use of the Internet
3.2 INFO 2000 - invitations to tender for follow up action

4. COPYRIGHT
4.1 DG III hosts joint industry meeting in an attempt to break the deadlock over temporary copies
4.2 Council - no agreement on exceptions
4.3 Commission withdraws tender for a study into the economic impact of copyright and related rights
4.4 Commission launches study into collecting societies

5. ADVERTISING
5.1 Advertising to children
5.2 National experts group makes slow progress
5.3 Conference on "Advertising Matters" in Brussels on 28 April

6. AUDIOVISUAL
6.1 Financial transparency for state-funded broadcasters
6.2 Council working group discussions
6.3 European Parliament discusses the competitiveness of the audio-visual industry together with DG IV
6.4 Media II evaluation delayed again
6.5 TPS satellite agreement approved
6.6 Council of Europe hearing on digital TV and public service broadcasting
6.7 German Presidency seminar on self-regulation in the media (19-21 April)

7. TAXATION
7.1 Slow progress on VAT reforms

8. GENERAL
8.1 Data Protection
8.2 Piracy and Counterfeighting
8.3 Recycling Forum
8.4 Draft Agreement on recovery of waste paper
8.5 Interim report on the competitiveness of the publishing industry
8.6 Corporate Governance
8.7 New rules of procedure for the European Parliament
8.8 New White Paper on competition policy delayed until further notice

Dates for your diary

April

- 8th - Commission seminar on competitiveness of electronic commerce, Brussels
- 16th - G8 seminar on Global Marketplace for SMEs, Dallas, USA
- 17th - G8 workshop on cross-border electronic trade and regional development
- 19th - Forest-based industries; DGIII meeting on environmental policy
- 19th - DGXIII information meeting on the Action Plan for the safe use of the internet, Luxembourg
- 19th-21st - German Presidency seminar of self-regulation and the media, Saarbrucken
- 26th - Pre-conference reception (ICC/UNICE/EPC/ENPA/FAEP/EAT)
- 27th - Advertising and media Industry Conference, Brussels (details available on request)
- 28th - EPC Corporate Affairs Group meeting, Brussels

May
- 3rd - World Press Freedom Day
- 3rd-7th - European Parliament first reading on e-commerce Directive
- 18th - EAT seminar on country of origin (provisional)
- 18th-19th - INCORE meeting on self-rating systems

June
- EPC MEETING: 7/8 June, 1999 Berlin
- 10th-13th - European Parliamentary Elections



1 Electronic commerce

1.1 Council working groups near completion of first read through

Discussions on the draft Directive in the economic questions working group has competed its first read through of the Commission's draft Directive. So far, Member States have expressed their support for the deletion of Article 16(2) giving consumer organisations a role in drawing up self-regulatory codes but positions on other key issues remain unclear. Most Member States have yet to define their respective national positions which continues to hold back real progress. A second read through will begin end-April when it is hoped Member States will present a more co-ordinated position.

The Chairman of the lead working group attended the latest meeting of the consumer affairs working group where the Commission's proposal was heavily criticised for failing to put consumer interests first. Delegates opposed the country of origin principle with some Member State representatives expressing contrary views to their counterparts in the lead working group. The Commission remains equally divided with DGXXIV supporting the consumer lobby against DGXV.

The German Economics Ministry will be holding a special meeting on 12 April to discuss with German industry representatives the effectiveness of basing electronic transactions on the rules of the country of origin.

1.2 European Parliament lead committee delays adoption of report
The European Parliament's Legal Affairs Committee is considering 148 amendment tabled to the report by Christine Oddy (UK, PSE). These amendments are diverse and focus on all aspects of the Directive with the majority seeking to amend provisions on liability, consumer protection and the scope of the Directive. Debate so far has been broad, partly because the Commission has yet to express its opinion on all of the amendments. It has however said that it could not accept the amendments to the provisions on liability explaining that the existing wording represents the "consensus" view of industry and consumers.

Under pressure from political groups, the committee has postponed the vote until after the Easter break to allow more time for consultations. The vote is now scheduled for 21 April.

The first reading vote should take place 3-8 May, the final plenary session before the European Parliament elections.

1.3 European Parliament's supporting committees adopt opinions on the Lead Report
The opinion adopted by the Committee on Economic and Monetary Affairs strongly supports the position of content providers on the Commission's draft Directive. No amendments were adopted to the provisions on liability and the committee voted to delete exceptions to the country of origin principle for consumer contracts and unsolicited emails.

The Environment Committee adopted the opinion drafted by Philip Whitehead (UK, PES) en bloc and without further amendment. As expected, this opinion supported strengthening the role of consumer associations in drafting industry codes of conduct and the creation of a cross-border dispute settlement mechanism accessible to all consumers in their own language.

The Culture Committee's draft opinion by Danish MEP Renate Heinisch has proposed amendments to guarantee the protection of rightsholders against copyright infringements on the Internet.

1.4 Competitiveness of electronic commerce - Commission resignation delays adoption

The planned Communication assessing actions to improve the competitiveness of electronic commerce in the EU was not adopted on 24 March because of the resignation crisis in the Commission. The draft Communication recommends a number of actions, including close co-operation on technical standards, an on-going industry dialogue and the elimination of obstacles to a single market such as investment barriers. An industry workshop will be held on 8 April in Brussels, bringing together industry associations, national and EU officials, and standardisation bodies.

1.5 Council nears agreement on electronic signatures
Discussions within the Council have passed to COREPER stage after preliminary agreement has been reached on key aspects of the Commission's proposal. Many of the European Parliament's first reading amendments have been retained by the Council. However, opinions diverge on the use of electronic signatures in the public sector and the scope of common liability provisions. The Council hopes to reach agreement on a common position by June 1999.

1.6 OECD Guidelines on consumer protection in E-commerce
The OECD has issued new draft guidelines for comment by 3 May. It seems that some OECD members are pushing for consumer protection in the country of reception of e-commerce services. The time table foresees adoption of the final guidelines in September. Meanwhile the Secretariat will circulate a questionnaire for comments by 20 July on applicable law and jurisdiction.

2 Convergence

2.1 Commission adopts follow-up Communication on convergence

Shortly before its shock resignation, the Commission adopted follow-up recommendations on the regulation of converging technologies. The Communication summarised the results of the two rounds of consultations, but noted that interested parties had proposed few concrete actions. A shorter list of preliminary action points were adopted in the final text, together with a specific actions to examine regulation of the content industry and the separation of commercial and public service broadcasting activities. (The text can be consulted on the internet at http://www.ispo.cec.be/convergencegp/COM(99)108/COM(99)108ENfinal.html).

2.2 Councils to adopt conclusions on Commission Communication
Both the Telecoms and Culture Councils are to adopt conclusions on the Commission's recommended actions in the field of convergence. The telecoms working group is understood to be considering a draft text which Ministers will discuss at their meeting on 22 April. The Culture Council is expected to draft its contribution over the coming months and adopt it at the Council on 28 June. It looks as if the Culture Council will call for a co-ordinated approach to content regulation on the Internet.

3 Internet (content) regulation

3.1 Safe use of the internet - Commission information meeting

Following the award of contracts to carry out preliminary work for the implementation of the Action Plan, DGXIII will host an information meeting for interested parties on 19 April in Luxembourg to encourage active participation in the preparatory actions and to tender for future initiatives. The Commission has published a work programme which can be consulted on the Internet at http://www.echo.lu/iap/infoday.html

3.2 INFO 2000 - invitations to tender for follow-up actions
The European Commission has published tenders for actions to prepare the next phase of the INFO 2000 programme. The tender concerns four studies on:

- access to capital for content industries;
- commercial exploitation of Europe's public sector information;
- assessment of the export potential and linguistic customisation of digital content production and services;
- assessment of the impact of the INFO 2000 on the marketplace.

These studies will take 7-12 months to complete after contractual terms are agreed.

An evaluation report of the first phase of the INFO 2000 programme has also been published this month. It recommends the creation of a Content Forum made up of industry representatives and action to promote the production of quality digital production to counteract the problems faced as a result of technological convergence. (Full report available on request).

4 Copyright

4.1 DGIII hosts cross-industry meeting on redraft of Commission proposal

Things are not going well for rightsholders as the Commission revises its text on the draft copyright directive. Faced with massive lobbying from publishers and other content providers to accept the EP amendments which strengthened our position, the Commission is biding its time.
On the initiative of DGIII (which is not leading on this issue), an unprecedented cross-industry meeting on 18 March brought together representatives of rightsholders and telcos/ISPs to discuss a revision of the draft Directive currently under consideration within the services of DGXV. Although constructive discussions were held on Article 6 (technical devises) little progress was made on the question of temporary copies (Article 5.1), in spite of an offer from rightsholders to link this provision with liability provisions in the electronic commerce Directive. This offer was made to try and dispel the fears of the intermediaries that they would be held liable for the use of temporary copies even when an act of piracy was not involved. Publishers also made it clear that they were not seeking levies on temporary copies. However, the Commission is continuing to refuse to include the concept of "authorised use" for temporary copies and has not yet found a way, jurisprudentially, to link the copyright and e-commerce directives.

While EPC and other rightsholders increase the pressure on the Commission to support rights holders interests above those of the telcos and other intermediaries the draft proposal is scheduled for adoption mid- April (TBC).

4.2 Council working group discusses exceptions
Member States are considering whether or not to produce an exhaustive list of exceptions to the core right of reproduction. Some Member States are against harmonisation of exceptions wanting instead to leave this for the national level implementation.

4.3 Commission withdraws study tender
The Commission has announced that it has withdrawn an invitations to tender for a study on the economic impact of copyright and related rights in the EU. The tender was published in August 1998, but the notice was withdrawn after the Commission failed to find a contractor. it is understood that the Commission will now consider redrafting the terms of reference.

4.4 Commission launches study to evaluate national regulations on collecting societies
The Commission has announced the award of a tender to carry out an analytical study of laws and regulations, as well as practices and codes, in force in Member States concerning mechanisms for the regulation and monitoring of collecting societies. The study will also evaluate the need for further harmonisation and its possible scope. The study is expected to last approximately 12 months. (Further details available on request).

5 Advertising

5.1 Advertising to children - advertising representatives discuss regulatory options with the Commission

An initial meeting has taken place between EAT and DGXXIV to discuss mechanisms currently in place to regulate advertising to children. Industry representatives have already submitted a compendium of existing codes of conduct and legal instruments in use across the EU. However, DGXXIV has requested an additional paper identifying common factors in these codes, significant differences and any obstacles experienced by the industry regarding their implementation and enforcement. Industry representatives plan have been meeting to discuss the contents of their submission which must be made before the deadline of 3 May.

5.2 Commercial communications national experts group continues to make slow progress
The national experts' group postponed the formal publication of its opinion on sales promotions until its next meeting in April. The group will also consider a draft work programmed to be presented by the Commission which will contribute towards a Communication planned for Autumn 1999. This document will bring together views from Member States, industry and consumer groups gathered from a formal consultation to be undertaken by the Commission. It will also assess the need for legislative action in this field. Commission officials have privately expressed their disappointment at slow pace of progress and the reluctance of national officials to discuss the issues openly.

5.3 High level conference on advertising planned for April
UNICE and the International Chamber of Commerce (ICC) will host an advertising conference, bringing together advertisers, agencies and MEDIA from across Europe to discuss topical issues relating to advertising regulation and future development of the industry. EPC President Francisco Pinto Balsem¬čo, together with Hubert Burda and Christian Van Thillo, will speak at this event. All EPC members are invited (details on request) to the conference on 27 April in Brussels and to the pre-conference Reception on 26th April.

6 Audiovisual

6.1 Commission to publish new proposals on financial transparency and accounting requirements

The Commission has confirmed that state funded broadcasters must be subjected to new requirements on financial transparency and accounting. Formal proposals will be published shortly in the Official Journal.

6.2 Council working group postponed
The latest meeting of the audiovisual working group has been postponed to 9 April after the agenda was deemed to be insufficient. In the meantime, the German Presidency continues with its plans for a seminar on self-regulation which will conclude with two reports drawn up by national officials nominated as Rapporteurs and Council conclusions on a way forward (see paragraph 6.7) The next meeting of the working group is expected to turn to the Commission's recent proposal for full EU membership of the European Audiovisual Observatory, the Council's response to the Communication on convergence and the revised Commission Directive on the financial transparency of public undertakings, which is due to be released for consultation shortly (see paragraph 6.1).

6.3 European Parliament meeting discusses the competitiveness of European audiovisual industry
Italian MEPs Caccavale and dell'Alba hosted a hearing on broadcasting on 2 March, attended by Commissioners Oreja and Bonino. Director General of DGIV, Alexandre Schaub, spoke candidly of the outstanding complaints of unfair competition under consideration with his services and future regulation of public service and commercial broadcasting. Speakers from both commercial and public service broadcasting bodies also spoke, with a short session focusing on the Italian broadcasting market as a case study. (A summary report is available on request).

6.4 MEDIA II evaluation delayed
The European Commission delayed its adoption of the evaluation report of the MEDIA II programme after concern was raised by the budgetary services concerning the amount proposed to complete the final year of the programme in 2000. Uncertainty now surrounds the publication of this report following the resignation of the Commission.

6.5 TPS satellite agreement approved by Commission
The European Commission has approved a modified agreement allowing TPS to exclusively distribute content for TF1, France 2, France 3 and M3 during the initial 3 years of its operation. TPS had submitted its agreement with the four broadcasters end-1996, which was approved on the grounds that it will introduce new competition in the French satellite market.

6.6 Council of Europe holds hearing on digital broadcasting and public service television
The Council of Europe held a hearing on 7 March on the role of public broadcasting in the digital era. Evidence was heard from both public service and commercial broadcasters, and concluded that public service broadcaster should be allowed to make full use of the opportunities offered by digital technology but that the establishment of commercial services should be kept separate from their public service activities. (A brief summary report is available on request).

6.7 German Presidency seminar on self-regulation to focus on European framework
The focus of the seminar planned for 19-21 April in Saarbrucken will be firstly an assessment of existing national and European initiatives and secondly the potential for developing a European-wide framework to implement the structure envisaged in the Council Recommendation on the protection of minors regarding co-operation between national bodies. One working group will focus on each of these issues, producing a report which will form the basis of Council Conclusions on the issue. Participation is limited to 200 representatives of national administrations and self-regulatory bodies. (Full programme available on request).

7 Taxation

7.1 Progress slows on VAT reform

As expected, talks between Member States on the revision of standard rate VAT have revealed serious divisions. Member States are agreed on maintaining the current minimum rate of 15% but there is no consensus on the Commission's proposal to introduce a maximum rate of 24% for the first time. Proposals to amend annex H (goods and services subject to a reduced rate of VAT) remain submerged in the services of DGXXI under considerable pressure from Member States against changes to the current regime.

8 General

8.1 EU working party adopts recommendation on data protection and the internet

The latest report by the working party set up by the EU Directive to examine its implementation and related issues recognises the high level of automatic and undetectable processing of personal data which takes place on the internet and proposes measures to increase consumer control. It recommends that tools should be available to allow consumers to filter the reception, storage and sending of personal information. Consumers should also be informed of which information is intended to be transferred and be allowed to remove information in a simple way. (The full text can be consulted on the internet at: http://www.europa.eu.int/comm/dg15/en/media/dataprot/wpdocs/index.htm).

8.2 Commission consultation on piracy ends with hearing
The Commission has now concluded its consultation on its Green Paper on piracy and counterfeiting following a hearing with interested parties at the European Patent Office, Munich. The hearing revealed support for the role of private sector in combating piracy and ensuring full implementation and enforcement of EU laws in Member States, with closer co-operation between national authorities. The Commission will follow-up its Green Paper with a Communication in the Autumn.

8.3 Recycling Forum - initial sessions of working groups complete
Areas for further discussion were identified at the inaugural meetings of the recycling forum working groups this month - diagnostics and statistics; regulation; innovation and research; market development and standards. A second series of working group meetings in April and May will examine key issues such as the economic impact of existing environmental legislation on European industry and the recycled content of newsprint. (Minutes and dates of next meetings are available on request or on the internet at: http://europa.eu.int/comm/dg03/directs/dg3c/recycling/recycling.htm).

8.4 Talks begin with the Commission on a European Agreement for the paper sector
The Confederation of European Paper Industries (CEPI) has held initial talks with DGXI and DGIII on its proposal to negotiate an agreement on shared responsibility for paper recovery. Industry federations representing other parts of the paper chain continue to support CEPI's initiative although some differences of opinion remain. Following concerns raised by the publishing federations, CEPI is taking advice on the legal implications of agreements of this kind. It will also launch a study on options for a monitoring mechanism. A further industry meeting is expected before Easter ahead of further talks with the Commission. (Note: CEPI will present its plans to the EPC Corporate Affairs meeting on 28 April).

8.5 Competitiveness of EU publishing industries - interim report presented to European federations
A disappointing Interim report on the competitiveness of the publishing industries was presented to EPC and publishing trade associations on 30 March. The Commission has asked for a re-draft before proceeding to the next stage of analysis. Copies available on request. The head of research will attend the EPC Corporate Affairs group meeting on 28 April in Brussels to gather further practical information and to test some of the preliminary conclusions.

8.6 Commission abandons plans for a Communication on corporate governance
DGXV has given up its plans to draft a Communication on corporate governance as a follow-up to its conference on company law in December 1997. Instead, work will begin on what was to be the second stage - i.e. the creation of a forum to discuss and monitor developments. The Commission expect progress, however, to be slow and little action is anticipated before the Summer. Meanwhile, the German Presidency hopes to reach a common position on the draft Directive on company take-overs by June, although the Commission remains pessimistic that agreement can be found so soon.

8.7 European Parliament amends rules of procedure ahead of entry into force of the Amsterdam Treaty
The European Parliament has amended its internal rules of procedure to reinforce changes introduced by the Amsterdam Treaty. The Council, for example, will be encouraged to begin a dialogue with the Parliament at an earlier stage of the co-decision procedure. New rules will prevent political groups tabling contradictory amendments, identical amendments will be voted as one and series of amendments can be voted en bloc. Also, explanatory statements will no longer be included in legislative reports. These new rules will apply in the next Parliament once the treaty has been ratified by all Member States. (Further details available on request).

8.8 Adoption of White Paper on competition policy delayed by Commission resignation
Following the resignation of the Commission, Commissioner Van Miert announced the decision to suspend work on the long-awaited White Paper on the grounds that it is a politically sensitive issue and that the current Commission should no longer be associated with it. The Commission was due to adopt the Paper on 17 March. DGIV's work on sport has been left in a similar situation, following the adoption of guidelines on the application of competition laws to this area. Meanwhile, the services of DGIV have assured interested parties that work will continue on on-going investigations. Only political decisions remain on hold for the time being.

Documents available on request

European Commission
- Non-paper on taxation of electronic commerce: options for the EU VAT system
- Communication on the competitiveness of European enterprises in the face of globalisation
- White Paper on commerce
- Working party on the protection of individuals with regard to the processingof personal data
- latest opinions on data protection on the internet
- Green paper on Public Sector Information in the Information Society
- Green paper on Piracy and Counterfeiting in the single market
- Draft Communication on competitiveness of e-commerce
- Communication on Convergence
- Evaluation report on the INFO 2000 programme
- revised proposal for a Directive on copyright and related rights

European Parliament
Draft Directive on electronic commerce (first reading - co-decision)
- Legal Affairs Committee - draft report (Oddy)
- Economic and Monetary Affairs Committee - adopted opinion (Hoppenstedt)
- Culture Committee - adopted opinion (Heinisch)
- Environment Committee - adopted opinion (Whitehead) forthcoming

Draft Directive on copyright (first reading - co-decision)
- first reading resolution (based on Barzanti report)

WIPO Treaties (consultation) - procedure suspended
- Legal Affairs Committee - draft report (Habsburg-Lothrigen)
Culture Committee - adopted opinion (Kerr)

Draft Directive on a European framework for electronic signatures (first reading)
- first reading resolution (based on Ullmann report)

Draft Commission Directive to ensure that telecommunications networks and cable TV networks owned by a single operator are separate legal entities
- adopted resolution (based on Watson report)

EPC Documents
- latest statements from the Ad Hoc Alliance against unfair competition in the broadcasting and new services markets
- EPC final position paper on e-commerce
- Press releases on copyright
- Minutes of the EPC meeting held 21 January

Others
WIPO - draft database Treaty
- Consultation documents

WIPO - audiovisual performers Treaty
- consultation documents
CEPI - Towards a European Agreement on the Recovery of Paper and Board Products
- draft paper on producer responsibility

Media Group
- Interim report for study on the competitiveness of EU publishing industries

Bonn University study on advertising and children
- results of academic survey and statistical data

Council of Europe
- recommendation on measures to promote media pluralism - text formally adopted the Committee of Ministers (Jan. 99)
- draft Convention on the legal protection of services consisting of or based on conditional access
Association of Commercial Television (ACT)
√° Position paper on public service broadcasting


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