Update: The Council of the EU adopted the AVMSD on 6 November 2018.
Recently, the European Parliament approved the revised Audiovisual Media Services Directive (revised AVMSD), which extends the scope of regulation to cover video-sharing services such as YouTube, Instagram and Facebook (the existing rules only cover traditional TV broadcasters and video-on-demand services).
It is expected that the Council of the EU will adopt the revised AVMSD in the coming weeks before it enters into force at the end of the year. Once adopted, Member States will have a period of 21 months to implement the new AVMSD into their national legislation (i.e., by around August 2020).
The revised AVMSD introduces significant changes. In particular, it means that video sharing platforms will be subject to a media regulator, will have to be registered, and will need to consider implementing measures to protect minors from harmful content and all citizens from hate crime (if they do not do so already).
Amending the AVMSD was part of the European Commission's Digital Single Market (DSM) strategy which it first set out in a white paper on 6 May 2015. The Commission also took into account the significant shift in the media landscape since the original AVMSD first came into force in 2010, and the need to update the directive for the 21st century.
What's new in the revised AVMSD?
Extending the scope to video-sharing platforms
The revised AVMSD defines a video-sharing platform as a commercial service addressed to the public:
- which stores a large amount of programmes or user-generated videos, for which the video-sharing platform provider does not have editorial responsibility;
- where the content is organised in a way determined by the provider of the service, in particular by hosting, displaying, tagging and sequencing;
- where the principal purpose of the service (or a dissociable section thereof) is devoted to providing programmes and user-generated videos to the general public, in order to inform, entertain or educate; and
- which is made available by electronic communications networks.
This will therefore extend the reach of the current AVMSD to services such as YouTube, Instagram and Facebook (all of which are classified as a 'video-sharing platform' for the purposes of the revised AVMSD).
In cross-border terms, the application of the revised AVMSD does not change and will continue to be based on the same criteria: 1) the location of the media service provider's head office; and 2) where editorial decisions are made. If they are located in different Member States or outside of the EU, further criteria will be taken into account, in particular, whether a significant part of the service provider's workforce is based in the EU. By way of example, a media service provider with its head office in a third country, such as the US (or the UK post exit), could apply for a licence in an EU Member State. However, to be eligible for this licence, media service providers would have to make editorial decisions in the EU and have a “significant part” of their workforce in the EU.
Protection of minors from harmful and illegal content and hate speech
Under the revised AVMSD, video-sharing platforms will now be required to implement appropriate measures protecting minors from harmful content and protecting the general public from content which contains incitement to violence, hatred and terrorism. The revised AVMSD lists ten tools that video-sharing platforms should consider. Such measures may include selecting the time of broadcast, age verification tools or other technical measures. Gratuitous violence and pornography or other content which may impair "the physical, mental or moral development of minors" will be subject to the strictest measures such as encryption and effective parental controls. Member States may adopt stricter measures - subject to the liability exemptions for digital intermediaries in the E-commerce Directive - and co-regulation is encouraged.
The UK is already considering age verification measures in a number of sectors. For example, in the UK, the British Board of Film Classification (BBFC) is appointed as the regulator responsible under the Digital Economy Act 2017 for designating which of the websites accessible in the UK are commercial pornographic websites and whether any age-verification arrangements used by such sites are adequate. The BBFC's guidance relating to age-verification measures was considered for approval by Parliament on 10 October (Guidance) and is viewable here. One age-verification measure proposed by the BBFC is the inclusion of measures which authenticate age-verification data and measures which are effective at preventing use by non-human operators including algorithms.
Improving the country of origin principle
Under the country of origin principle, as long as audio-visual media service providers are regulated in one Member State, they may freely transmit into other Member States without the need for compliance with additional regulation. The revised AVMSD confirms and facilitates the country of origin principle by introducing transparency among Member States, requiring them to keep a public database which contains an up do date list of providers. Among other things, the revised AVMSD also introduces new urgency procedures for derogations in case of public security concerns.
The revised AVMSD encourages Member States to adopt self- and co-regulation through codes of conduct to reduce children's exposure to audiovisual commercial communications for alcoholic beverages and foods and beverages which are particularly high in fat, salts and sugars. The revised AVMSD also stresses the importance of minors being "effectively protected from exposure to audiovisual commercial communications relating to the promotion of gambling".
Quota of European works
Video on Demand (VoD) services will now be required to ensure that their catalogues have at least 30% content share of European works - as defined in the revised AVMSD - and that such works are given due prominence, for example, by indicating the country where a film or series comes from. This is to help promote EU content. VoD services with a low turnover and low audiences are exempt. The Commission is due to issue further guidelines on the calculation of the share of European works and the definition of low audience and low turnover.
The revised AVMSD allows Member States to impose financial contributions on VoD services including via direct investment in content and contribution national funds. These may be imposed on VoD services that operate in the jurisdiction of that Member State and, under certain proportionate and non-discriminatory conditions, where VoD services are established in a different Member State but are targeting their national audience. These financial contributions should be based only on the revenues earned in the targeted Member State and should take into account any financial contributions imposed by other targeted Member States, and comply with EU law, including State aid rules.
Brexit: What will happen once the UK leaves the EU?
It seems likely that the revised AVMSD will be adopted whilst the UK is still in the EU but it will not need to be implemented by Member States until potentially after the UK has left, or during the possible implementation period.
The current AVMSD was implemented by the UK through the Broadcasting Acts 1990 and 1996, and the Communications Act 2003. Once the UK leaves the EU, subject to any agreement that is reached with the EU and any other international commitments, the UK Government would have the scope to repeal or amend these laws over time without being limited by the requirements of European directive, subject to any other international commitments. However, this is unlikely to happen and indeed the UK Government has confirmed that it will not do this (see DCMS No-Deal Guidance below).
Country of Origin Principle
One of the key benefits of the AVMSD is the country of origin principle. As stated above, under this principle, as long as audio-visual media service providers are regulated in one Member State, they may freely transmit into other Member States without the need for compliance with additional regulation.
In the event of a UK exit from the EU, providers based in the UK would lose the benefit of this principle. This could mean that UK regulated providers may no longer be guaranteed freedom of retransmission in other Member States and may be required to comply with additional regulation in those Member States (and vice-versa). This issue is noted by the UK Government in its White Paper: The Future Relationship between the United Kingdom and the European Union (White Paper). Regardless of what happens after March 2019, the White Paper confirms that the UK is committed to ensuring continued licence-free reception for TG4, RTÉ1 and RTÉ2 to reflect and build-on the commitments in the Good Friday agreement.
If, post exit, UK broadcasters choose to access the EU market as an organisation established in a third country, the revised AVMSD (Article 2) would require them to relocate a significant part of their workforce and editorial decision-making to the EU to continue to participate in the Country of Origin regime.
Post Brexit, the UK will participate in the Council of Europe 1989 ‘European Convention on Transfrontier Television’ (Convention). The Convention operates as a substitute for some aspects of the market access conferred by the AVMSD, but not all: online services are not covered by the Convention, several EU Member States (Denmark, Greece, Ireland, Luxembourg, the Netherlands and Sweden) have not signed it, and it does not contain an effective enforcement mechanism.
As a signatory to the Convention, UK originated works may still continue to be classified as 'European works', as the definition of a 'European Work' in the AVMSD includes (subjects to certain conditions) those originating from non-Member States which are a party to the Convention. Therefore UK productions will contribute to EU 'European Works' quotas.
Funding from the EU
According to a report published by the British Film Institute (BFI) earlier this year, the UK screen sector has received £298.4 million in EU funding over the last decade. In its White Paper the UK Government hopes this may continue by stating that it is open to exploring its continued involvement in Creative Europe, an organisation which supports cultural, creative and audio visual projects. The BFI has warned however that it is "extremely unlikely" that EU structural funds will be available to the UK post-Brexit, and stresses the importance of the UK developing alternatives that preserve as many of their benefits as possible to the EU schemes it will no longer be able to participate in.
Guidance from the UK Government
Following publication of the Commission's Notice to Stakeholders: Withdrawal of the United Kingdom and EU rules in the field of Audiovisual Media Service on 19 March 2018, the Department for Digital, Culture, Media & Sport (DCMS) published guidance for media services providers in relation to broadcasting and VoD in the event that there is a ‘no-deal’ (DCMS No-Deal Guidance). In terms of practical advice, the DCMS No-Deal Guidance advises that any entity caught by the revised AVMSD should assess whether its current licence will continue to be accepted in the EU countries where the service is made available and seek independent local advice if necessary. As noted above, if the service is provided in Sweden, for example, it may not continue to be accepted post Brexit as Sweden is not a signatory to the Convention.