On Tuesday 14 November the Hogan Lovells DSM Taskforce (our dedicated pan-EU team of lawyers tracking the Commission’s DSM strategy) had its annual live meeting in Brussels to discuss the progress of the implementation of the DSM strategy and key forthcoming developments. The team held a webinar on the status of the strategy and what to expect in 2018 in the areas of platforms, e-commerce, the draft AVMS Directive, the copyright reforms, privacy and telecoms. If you missed it you can read the highlights below or watch the recorded webinar here.
In the area of platforms, Christian Ritz and Falk Schöning highlighted the Commission’s Impact Assessment: “Fairness in platform-to-business relations” (which is running until 22 November). In this, the Commission outlines three policy options to regulate online platforms: (1) a soft law approach to stimulate industry led actions; (2) targeted legislation in parallel with EU competition law, and (3) a detailed regulatory framework to be applied in conjunction with EU competition law. This third option would involve an EU regulator for online platforms. Falk Schöning explained that the Commission currently contemplates whether regulation or antitrust enforcement of platforms is the more efficient way to tackle digital markets. He talked about the term “Hipster antitrust”, which is a US term applied to the call for interventionist regulation for the big internet players. Falk said that the Commission is trying to obtain more data on the power of these large companies in order to understand the impact of the big players on SME’s in Europe. This will feed into the debate on whether a more interventionist approach is needed on online markets. The Study will be published in the next few months.
Salomé Cisnal De Ugarte highlighted that in May 2017 the Commission adopted its final report on the E-Commerce Sector Enquiry. She said that in relation to digital content the Commission found there were concerns with substantial competition restrictions e.g. geo-blocking. Regarding consumer goods, the Commission found that manufacturers were trying to control the distribution of their products and there has been an increase in selective distribution systems. The Sector Enquiry has led the Commission to open a series of investigations as a result and more are expected. Looking ahead, Salomé said that the CJEU ruling in the Coty case is expected in December and this will provide clarity around the legality of the use of selective distribution systems.
Audiovisual Media Services (AVMS)
Alberto Bellan explained the Commission’s proposed reforms in relation to the AVMS Directive. He said the main goal of the reforms is to create a level-playing field between the traditional AVMS services (linear broadcasting) and on the other hand OTT services and video-sharing platforms. Some of the reforms the Commission has proposed include extending the scope of the AVMS Directive to video-sharing platforms and introducing new obligations on them. In relation to promoting EU works, the Commission has proposed that Member States be allowed to require financial contributions from on-demand providers based in their territory or targeting their national audience. Alberto said this is a major departure from the country of origin principle of the AVMS Directive. He said the disagreements in the Trilogue phase are slowing down the negotiations and we do not expect a final vote on the reforms before the end of 2018.
Al Shaw discussed the draft Copyright Directive. He highlighted that the Council IP Working Party is currently considering the reforms. It may be assumed that the European Parliament will vote on the changes not before the end of Q1/2018. Al mentioned that the two most controversial aspects of the reforms are Article 11 (the new press publishers right) and Article 13 (the “value gap” proposal in relation to hosting provider obligations). Al also pointed out that, in relation to the press publishers right it seems likely that this will end up as a presumption that the publisher is entitled to enforce rights and conclude licences. In relation to Article 13, there have been a number of changes recently proposed by the Estonian presidency and we will have to wait until January to see how the European Parliament votes.
Nils Rauer particularly discussed the draft Online Transmission and Retransmissions Regulation, which is intended to facilitate the clearing of rights. For broadcasters’ online services the regulation applies the country of origin principle from the SatCab Directive to broadcasters’ online services. For online retransmission services (e.g. where services are bundled and retransmitted online) the regulation introduces mandatory collective licensing for the clearing of rights. Nils said that certain compromise amendments were leaked on 4 October. The final vote is expected on 22 November this year. However, we have seen such votes being postponed several times. Thus, we will see whether the draft will indeed stay on the agenda.
Nick Westbrook discussed the draft E-Privacy Regulation, which was proposed by the Commission in January 2017 in order to bring existing e-privacy laws into line with the General Data Protection Regulation (GDPR) and technological developments. It includes rules around the use of communications data, cookies and direct marketing. He said the draft Regulation is getting a lot of attention because it includes proposals to raise the level of fines for breaches and introduce a higher standard of consent (in line with the GDPR). In addition, under the draft Regulation the rules around the use of communications data will apply to OTT providers (e.g. Skype, WhatsApp) and M2M communications. The next steps are for the European Council to finalise their position, and following that the Trilogue discussions will begin.
Dina Jubrail discussed the current status of the draft Electronic Communications Code, a proposal for common EU rules on telecoms regulation. Dina said that in October MEPs in the European Parliament’s Industry Committee (ITRC) approved a sweeping telecoms bill, which watered down the original proposals and introduced a controversial price cap on calls between Member States. The next step is for the legislation to be agreed in the Trilogue phase. Dina explained that the Commission has also sought to elevate the status of BEREC with full blown agency powers and a Commission-appointed Executive Director that would have had voting rights over national regulatory decisions. The ITRC has rejected this proposal. She also touched on the alignment of the European Parliament and the Commission in relation to the harmonisation of spectrum licensing and the 5G Action Plan. Parliament has suggested that the Commission should provide it with an annual 5G Action Plan review on progress, together with any recommendations.
Watch this space
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