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POSITION PAPER OF THE EUROPEAN PUBLISHERS COUNCIL ON THE DRAFT DIRECTIVE ON ELECTRONIC COMMERCE

CHAPTER 1 - GENERAL PROVISIONS
We fully support the objectives and scope of the draft directive; in particular the application of internal market principles to e-commerce. Such a regulatory framework is essential to enable European businesses and consumers to benefit from electronic commerce.

Article 2: Definitions
The definition of information society service is, we believe, the same as that contained in the Directive 98/48/EC on regulatory transparency in information society services. For the sake of consistency, the EPC is not proposing any amendment to that basic definition. However, we would like to raise two points of clarification:

- Limitation to services provided for remuneration Recital 3 of the draft directive describes a wide range of economic activities which can be covered by the definition of "information society services" which we note explicitly includes services which are not remunerated by those who receive them, such as on-line information services. This is an important clarification as electronic newspapers made available free to the consumer (often supported by advertising) should come fully within the scope of the directive. Publishers have to comply with the law in the country of publication and accept liability for their own content - both editorial and commercial - regardless of whether or not they sell their services directly to consumers.

- Inclusion of commercial communications within the definition of information society service. In that commercial communications are an integral part of many information society services, including electronic newspapers, whether or not made available on subscription or free of charge, we propose that they be explicitly covered in the same Recital 3.

Proposed amendment: to Recital 3.

Add ÉÉ.extend to services which are not remunerated by those who receive them, such as those offering on-line information and commercial communications; whereasÉÉÉ..

Definition of consumer
The directive should define 'consumer'

Proposed amendment: Article 2 (d)

bis: "Consumer" means natural person acting for purposes outside their trade, business or profession', in accordance with the definitions in other directives (e.g. that on distance selling).

Article 3: Internal Market
As stated above, we fully support the application of internal market principles to e-commerce. Mutual recognition by Member States of services emanating from another member state which comply with the rules of that country of origin facilitates free and unrestricted circulation throughout the Internal Market of information society services. This is crucial to the free flow of information within the Internal Market. Any attempt by Member States to impose the rules of the country of reception to content produced lawfully in another Member State would pose a serious threat to the freedom of expression and be tantamount to censorship.

Chapter IV of the directive proposes certain derogations from internal market principles. We are concerned that Member States may use these derogations as justification for unwarranted interference with both editorial and advertising content.

Proposed amendment:

See comments under Chapter IV and under Annex II It is important that it is absolutely clear that commercial communications are included within the applicable law provisions. Article 3 applies to 'information society services', which are separately defined from 'commercial communications' in Article 2. While this may be resolved by the provisions of Article 1, which seems to subordinate commercial communications to information society services, it is important that this matter is clarified within the scope of Recital 3 (as set out above); as subsequent argument could be contentious.

Article 3 (3) - Requirements for electronic contracts and private international law
The effect seems to be that, in seeking to enforce national rules for forming contracts by e-commerce (as harmonised by the directive), member states are free to apply their own doctrines of conflict of law. If the intention is to retain under doctrines of conflict the freedom of the contracting parties to determine which law applies to the interpretation of a contract, as between themselves, we would support this. However, the Articles (9-11) in Section 3 - those establishing basic rules for the formalities of electronic contracts, do not seem relevant to this intention, and it is surely important that member states do have adequately harmonised rules for acceptable electronic contracts.

Proposed amendment:
Delete Article 3 and Recital 7.


CHAPTER II - PRINCIPLES
Section 1 (Articles 4-5): Establishment and Information Requirements; Section 2 (Articles 6-8): Commercial communications, and Section 3 (Articles 9-11):

Electronic contracts
We have no comments on these Articles other than to support the proposed wording.

Section 4 (Articles 12-15): Liability of intermediaries
We regard the issues covered by this section, which seeks to clarify the liability of different parties in the information chain for content which may infringe any of the various provisions governing the flow of information as being of major importance: for example, copyright, harmful and illegal content, or breach of regulatory regimes on advertising, provision of financial services.

Our concern, as publishers and producers of content, has been to ensure that service providers carrying (but not providing) content are required, on the one hand, to take reasonable steps to ensure that, for example, their services are not used for copyright infringement, while, on the other, ensuring that they are not so cautious on matters such as freedom of expression as to have a chilling effect on the dissemination of information and ideas that may be regarded as radical or challenging to political, moral and cultural correctness.

A considerable body of law has been built up on these matters over the years, providing, for example, that physical distributors and retailers of copyright goods have a liability from the moment they know, or should know, of a purported infringement. In the information society, there is increasing confusion between the role of conduits, distributors, and content providers, and it is clearly vital that operators i) are not able to escape liability as having one role when in fact acting in another, and ii) take an active part, in the digital environment that makes infringements increasingly difficult to detect, in helping prevent infringement. We are concerned that established rules on liability should be maintained in the digital environment, and that partners in the information chain should each have to play a proper part in ensuring that the law is sensibly enforced.

Happily, we regard the proposed draft, defining the liability of 'mere conduits' (Article 12), 'caching activities (Article 13), and 'hosts' (Article 14), while providing for the exclusion of obligations on service providers to monitor their services actively (Article 15), as providing a broadly acceptable regime. We could not accept any proposals which would have the effect of diminishing copyright protection, or making copyright more difficult to enforce, or, on the other hand, which imposed unduly onerous restrictions on content providers in their editorial function. In general, the Commission's proposals provide a regime very similar to that recently agreed in the USA in the Digital Millennium Copyright Act, with the addition of the availability of injunctive relief, presumably designed to provide a fallback mechanism should a service provider wantonly fail to assist in the prevention of unlawful activity when other remedies against a third party have failed. The proposals appear to distinguish clearly between different functions, and have adequate criteria for determining into which category an activity falls. The exclusion from liability of a party merely engaging in providing a conduit, and the imposition of liability of a host or caching service when on notice of infringement, seem acceptable.

The proposals do not however, deal with the position of search engines, data aggregators or service providers which include hyperlinks. In the case of search engines, these often act as content providers and, as such, should be covered by the provisions of the directive as they relate to information society services. In the case of hyperlinked-content, information society service providers should not be put in the position of having to check the content of everything to which they provide hyperlinks, especially as that content could change frequently. The same is true of content supplied by data aggregators. These examples are different from acquiring third party content by licence and incorporating that content into the main service as part of the editorial process of publishing. A problem of identifying who is liable arises in the event that an illegal act takes place in connection with third party content: e.g. if a publisher has linked subscribers to another site which contained defamatory material, could the publisher be held liable if the libelled person found the illegal material via his site, or would the original perpetrator be solely liable? Additional articles may be necessary to cover these points.

Article 15 - No obligation to monitor
We accept this provision, as it helps to ensure that service providers do not take such a cautious attitude towards potentially 'harmful and illegal' materials as to have a chilling effect on freedom of expression. Nevertheless, we are concerned that it does not also enable them to be uncooperative in helping prevent private law infringements, such as breach of copyright.

Proposed amendment to article 15
- new paragraph 3: A complainant may seek a court order, requiring the service provider in appropriate circumstances, and on prima facie proof of infringement, to monitor content to detect infringement.

CHAPTER 3: IMPLEMENTATION
Article 16: Codes of conduct
Paragraph 2 - Involvement of consumer associations


Proposed amendment to article 16.2:
Delete The proposed mandatory involvement of consumer associations in either the drawing up or implementation of codes of conduct drawn up by industry is not acceptable; nor is it common practice in the Member States. However, it is undoubtedly in the interests of effective e-commerce that industry should address issues of concern to consumers through industry codes of conduct. This should be voluntary. Forced involvement of outside parties negates the very essence of self-regulation.

Articles 17-26
We have no comments on these Articles at present

CHAPTER IV - DEROGATIONS
Article 22.3 (a) (i)

These proposed derogations allow Member States the possibility to censor content emanating from outside their jurisdiction for reasons of public policy, in particular the protection of minors, or the fight against any incitement to hatred on grounds of race, sex, religion or nationality; the protection of public health, public security and consumer protection.

Proposed amendment to article 22.3 :
By way of derogation to Article 3(2), and without prejudice to Article 10 of the European Convention on Human Rights which guarantees the freedom of expression, which includes the freedom of commercial speech, or to court actions, the competentÉÉÉ..
Such an amendment is vital in order to safeguard the freedom of expression from unjustified protectionism or censorship by the Member States.

ANNEX II - DEROGATIONS FROM ARTICLE 3
Derogation for copyrights We welcome the exclusion of copyrights, neighbouring rights, database rights and 'typography of semi-conductor' rights from Article 3. These rights are of particular importance in the marketing of content, and the legal issues arising are the subject of current discussions in the context of other directives.

Contractual obligations concerning consumer contracts. We are concerned about what seems to be the unnecessary exclusion of consumer contracts from Article 3. We believe that the draft seems to have the effect of improving consumer protection by clarifying the position in electronic commerce for suppliers and their consumers and ensuring that member states actively apply harmonised standards of protection in e-commerce.

Proposed amendment to Annex II - indent 5:
Delete Unsolicited commercial communications by electronic mail. This derogation is otiose. EU Data Protection legislation already provides for consumer protection in this regard. Suppliers of electronic services must offer consumers the possibility not to receive direct marketing messages. Proposed amendment to Annex II - indent 6: Delete


On behalf of the European Publishers Council February 1999