DSM Watch: JURI votes on the Draft Regulation on Online Transmissions and Retransmissions and proposes major reduction in scope

Hogan Lovells
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Last week, the European Parliament’s Committee on Legal Affairs’ (JURI) took its long awaited and frequently postponed vote on the draft Regulation COM(2016) 594 relating to online transmissions and retransmissions by broadcasters (press release). With fifteen to eight votes (and one abstention), JURI –the lead EP committee on this proposal – adopted the paper which is likely to become the European Parliament’s position in the trilogue with the Council and Commission. The proposed amendments to the Commission’s first draft can be expected to be approved in plenary shortly.

Background

In the context of the Digital Single Market Strategy, the European Commission aims to simplify the cross-border clearance of rights for broadcasters and thereby enhance the distribution of content within the European Union. Therefore, on 14 September 2016, the Commission presented its draft regulation on online transmissions of broadcasting organisations and retransmissions of television and radio programmes. The draft addresses two main issues: (1) the extension of the “country of origin” principle to broadcasters own online services (so called “ancillary online services“), and (2) the technologically neutral extension of the retransmission right to certain closed networks. For more detailed information about the proposed draft, please have a look at our blog post.

After the rapporteur Tiemo Wölken published a draft report in May 2017 which was recognizably in favour of more far-reaching provisions, there was a lot of push back by the other parliamentary committees as well as by industry representatives. In consideration of the received feedback, rapporteur Wölken worked out a compromise which was leaked not long ago (see our respective blog). Now JURI has taken its final vote on the matter. And, apparently rapporteur Tiemo Wölken is disappointed. From his initial comment we learn:

The chance to create a European audience was missed. Conservative forces put the interests of Big Players over the interests of millions of European citizens in an irrational, unbalanced way. Under the pretext of cultural diversity European Broadcasters are refrained from adapting to the digital age.”

The final Report

Against the background of the discussions we have seen, it’s not a big surprise that the JURI report differs significantly from the Commission’s initial proposal. In particular, one can see substantial limitations and exceptions from the principles the Commission originally put forward.

According to Art. 2 (1) of the report, the “country of origin” principle will only be extended to cover online services ancillary to broadcasts of “news and current affairs content“. For this type of content, broadcasters will only be required to obtain a license in one Member State in order to make available the content via the Internet. In comparison: the Commission suggested an extension of this principle to content that is ancillary to any broadcast, irrespective of its nature. The scope of application now adopted by JURI is therefore substantially narrower. In other words, the Digital Single Market will remain kind of “selective” in this respect.

Moreover, operators offering “packages” of TV and radio programmes via the Internet by way of retransmission will in future benefit from collective rights management. The idea is to create a one-stop-shop system. At present, the clearing of rights for such packages can be likened to the myth of Sisyphus. However, the details of JURI’s amendments to the initial draft are still to be analysed in detail.

What’s next?

The report will now move to the plenary for final adoption. Thereafter, the Parliament will negotiate a final compromise with the Commission and the Council. The so-called trilogue is about to commence. In a Revised Presidency Compromise Proposal, the Council has already argued in favour of a more restrictive approach to the extension of the “country of origin” principle. However, instead of limiting it to “news and current affairs content“, the Council advocates for introducing three explicit exceptions that will, for instance, cover commissioned works and sport events. This would lead to a broader scope of the “country of origin” principle compared to the final JURI report. Whether the European Parliament and the Council will follow the approach that the majority of JURI just voted for, is uncertain. The first reading in the Parliament is likely to take place in the next couple of months.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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