Audiovisual Media Services: Council approval upgrades the EU framework for a digital age

On 6 November 2018, the Council of the European Union formally adopted a new directive revising the existing Audiovisual Media Services Directive (2010/13/EU) ("AVMSD"). This is the final stage in the lengthy legislative process and the new directive will enter into force on the 20th day after its publication in the Official Journal of the EU. Member states will have 21 months to transpose it into national legislation (likely to be around August 2020).

The existing directive on the provision of audiovisual media services dates back to 2010. The market has developed significantly since then; fast paced technological advances arising from the convergence between television and internet services have led to new types of services and changes in viewing habits (particularly an increase in on-demand content consumption). User-generated content has also gained in importance. The legislative amendments seek to reflect these market developments.Key amendments under the revised directive include:

• Level-playing field for providers: creating a level playing field between all audiovisual media service providers to protect viewers (regardless of the service they provide and the platform they use). This is the most significant change and expands the scope of the existing directive from broadcasters and video-on-demand providers, to also include video-sharing platforms (such as Netflix and Youtube), as well as live streaming on video-sharing platforms.
• Combatting violence, hatred and terrorism: requiring audiovisual media service providers to have appropriate measures in place to combat content inciting violence, hatred and terrorism. Video-sharing platforms will now be responsible for reacting quickly when content is reported or flagged by users as harmful. Whilst the legislation does not include any requirements around automatic filtering of uploaded content, at the request of the European Parliament, platforms need to create a transparent, easy-to-use and effective mechanism to allow users to report or flag content.
• Country of origin principle: reinforcing the "Country-of-Origin" principle by providing more clarity on which Member State rules apply in each case. The Country-of-Origin principle provides that in order for a company to broadcast audiovisual media services across the whole of the EU, it must only be licensed by a single national regulator and comply with the regulatory standards of the Member State in which it is established. The revised AVMSD also provides for a public database to include a list of providers under each Member State's jurisdiction.
• Protection for minors: enhancing rules for the protection of minors, including regarding advertising, product placement in children's television programmes and content available on video-on-demand platforms. It also includes a personal data protection mechanism for children, which sets out measures to ensure data collected by audiovisual media service providers are not processed for commercial use, including for profiling and behavioural targeted advertising.
• Redefining advertising limits: introducing greater flexibility in television advertising. The updated directive, removes the current limit of 12 minutes per hour and instead permits advertising to take up to a maximum of 20% of the daily broadcasting period between 6.00 am and 6.00 pm. It also sets a prime time window between 6:00 pm and midnight, during which advertising can only take up to 20% of broadcasting time.
• VOD platform cultural diversity: extending existing requirements on European content for video-on-demand providers to promote European works. Video-on-demand providers need to ensure that 30% of content in their catalogues comprises European works. They are also required to contribute to the development of European audiovisual productions, either by investing in content directly or contributing to national funds. The level of contribution required in each Member State should be proportionate to the on-demand revenues in that country (i.e. the Member States where the provider is established or where it wholly or mostly targets the audience).

The UK: In or out?

The extent to which this updated directive will apply to the UK remains uncertain as this will depend on whether the UK Government is able to reach a Brexit deal with EU negotiators.

Deal: Following a UK Cabinet meeting on 14 November 2018, the Government announced support for a draft Withdrawal Agreement and an outline of the Political Declaration on the Future Relationship agreed with EU negotiators. The Withdrawal Agreement sets out the arrangements for the UK’s withdrawal from the EU on 29 March 2019. It includes a transition period through to 31 December 2020, during which EU law will continue to apply in and to the UK. If the draft Withdrawal Agreement is finalised and approved before the UK leaves the EU, the Government will still be required to implement the new AVMSD into national legislation by August 2020 (prior to the end of the Brexit transition period).

No-deal: However, the Government's "no-deal Brexit" technical note on broadcasting and video-on-demand confirms that if the UK leaves the EU with no deal (i.e. no withdrawal agreement and no transition period), the AVMSD will no longer apply to the UK. The Government would therefore have autonomy to determine the extent to which it implements the revised AVMSD into national law. Although, in doing so, the Government is likely to continue to "focus on ensuring the ability to trade as freely as possible with the EU and supporting the continued growth of the UK's broadcasting sector" as mentioned in its Brexit White Paper earlier this year. For our previous articles on the impact of Brexit on audiovisual media services in a "no-deal" scenario click here.

Conclusion

Whilst many in the industry will welcome this latest development in modernising the audiovisual media services regulatory framework, the changes may well prove to be a relatively steep learning curve for video-sharing platforms who will fall within the ambit of the directive for the first time. Given the uncertainty of a "no-deal" Brexit, the likely effect of the changes in the UK remains to be seen. Watch this space.