As we reported last month, the EU Council approved amendments to the Audiovisual Media Services Directive on 6 November 2018. The revised directive obliges EU member states to implement rules extending obligations previously applying only to broadcasters and video on demand services on video-sharing platforms (such as YouTube). Importantly, member states have until September 2020 to implement the directive, meaning that the UK will have to implement it if the UK-EU withdrawal agreement, and therefore the transitional period, is agreed.

Television without frontiers…

The new directive is the latest in a series of steps seeking to harmonise regulation of audiovisual content starting in 1989 with Council Directive 89/552/EEC, known as the “television without frontiers” directive (“TWF directive”). The TWF directive brought into EU law the so-called “country of origin” principle, under which broadcasters can broadcast throughout the EU while only being required to comply with the laws of the member state in which they are established.

The TWF directive also introduced various standards to protect children, established rules on advertising and sponsorship, introduced a pan-European “right of reply”, and created European works quotas (under which broadcasters would be required to allocate a majority of transmission time and 10% of production budgets to programmes originating in the EU and certain other European countries). However, the TWF directive only applied to (linear) television broadcasts and not (non-linear) video-on-demand (“VOD”).

2010: The Audiovisual Media Services Directive

As a result of changing technology and consumer choice, the omission of VOD created an uneven playing field between broadcasters and VOD services. This imbalance was largely addressed by the introduction of the Audiovisual Media Services Directive 2010/13/EU (“AVMSD”) in 2010. With the AVMSD came a new set of terminology. In particular, the AVMSD applies to all “audiovisual media services”, which means either television broadcasts or “on-demand services” (ie VOD) that have as their principal purpose the provision of programmes that inform, entertain or educate the public, and audiovisual commercial communications (adverts/sponsorship) accompanying or incorporated in programmes. Recital 21 to the AVMSD made clear that it only applied to “mass media”, meaning that it did not apply to user-generated content such as that available on YouTube and social networks. Crucially, while the AVMSD did apply to services such as Netflix and Amazon Prime, it did not apply the same strict obligations that applied to broadcasters.

The AVMSD applied certain rights and obligations to all media service providers providing audiovisual media services. Those included:

  1. The country of origin principle (and the corresponding right to reception of the service in all member states);
  2. Minimum standards for audiovisual commercial communications, including restrictions on ads/sponsorship that promote discrimination, tobacco, alcohol and prescription medicines, or target children;
  3. Restrictions on product placement, but with the caveat that member states can permit product placement in certain situations.

The AVMSD applied obligations on all media service providers to promote European works. However, it applied stricter obligations on TV broadcasters, such as:

  1. European works quotas, meaning that only broadcasters had to devote a majority of their schedules to European works and 10% of their schedules or 10% of the budgets to independent producers of European works. VOD services had a much looser obligation to promote the production of European works (without any set quota);
  2. Caps on the amount of advertising that could be shown as well as minimum intervals between advert breaks;
  3. A requirement that advertisements be recognisable and distinguishable from editorial content;
  4. A power for member states to designate certain important events (such as sporting and ceremonial events) as being precluded from exclusive licences, as well as enabling broadcasters to use other broadcasters’ coverage for short news reports;
  5. A right of reply (ie correction) for those subject to inaccurate reports about them;
  6. Stricter obligations protecting minors, including preventing the broadcast of anything that might seriously impair the physical, mental or moral development of minors, particularly pornography or gratuitous violence.

2018: Revisions to the AVMSD

Since 2010, there has been huge growth of VOD services such as Netflix, video-sharing platforms such as YouTube, and the increasing use of services such as Facebook and YouTube to view audiovisual content. In particular, young people are much more likely to watch content on video-sharing platforms and VOD services than on linear broadcasts, leaving a perceived gap in regulation. The revised AVMSD seeks to close that gap in order to protect viewers and promote European culture. We have created a document showing the changes to the AVMSD, available here.

The main changes are:

  1. European works quotas now apply to VOD services such as Netflix. Those services will now need to ensure that 30% of their catalogues is European, subject to certain exemptions, eg for smaller services. The European works quotas for broadcasters are unchanged.
  2. Video-sharing platforms such as YouTube and Facebook are now covered by the AVMSD and are obliged to protect minors from harmful content, and protect the public generally from violent, hateful and unlawful content. Platforms are required to comply with the same advertising rules as broadcasters and VOD services, taking into account the limited control they might have over some such adverts. Platforms are also expected to introduce technical measures such as for flagging harmful content, making advertisements identifiable, and introducing age verification and parental controls.
  3. The rules on advertisements have been tightened up, including through prohibiting advertisements for electronic cigarettes and encouraging codes of conduct covering foods high in fat, salt and sugar (HFSS);
  4. Increasing the protection of children from harmful and illegal content on VOD services, including by making such programmes available in a way so as that they would not normally be seen by children.

What about Brexit?

If the UK Parliament and the EU27 agree the draft UK withdrawal agreement there will be a transition period lasting to 31 December 2020. The new AVMSD directive must be implemented by September 2020, meaning that the UK would be required to implement it. However, with Brexit nothing is certain; if there is no deal agreed before 29 March 2018, not only will the new AVMSD not be implemented by the UK, the current AVMSD will cease to apply to the UK meaning all UK-based European broadcasters may need to obtain a licence (and potentially move some of their operations) to an EU27 member state in order to benefit from the country of origin principle across the EU.

The draft withdrawal agreement does not expressly refer to the AVMSD. However, Article 127 provides that EU law (which includes the AVMSD) continues to apply to the UK during the transition period. Further, the UK will in effect be treated as a member state meaning that UK-based broadcasters should benefit from the country of origin principle until at least 31 December 2018. Regardless of whether there is a deal, the UK has implemented the current AVMSD, and the European Union (Withdrawal) Act 2018 essentially leaves all EU-derived law untouched post Brexit.

Brexit is fast moving and complicated. Any media businesses looking to work out the implications for them should seek specific legal advice.



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