AVMSD: European Audiovisual Reform – It’s Not All About Quotas

Last May, the European Commission published its proposal to update the European rules on audiovisual (the “AVMSD”). And – if you follow European policy news – you might have noticed that most of the news coverage focused on the requirement for video-on-demand providers such as Netflix to implement a 20% quota of European works.

However, quotas are only a small part of the audiovisual reform. Many other crucial issues – including the 6 listed below – are currently hotly debated at the European Parliament and within the European Council, and could have a massive impact on the Internet ecosystem:

1) Minimum harmonisation

One of the key priorities of the European Commission is to create a Digital Single Market (“DSM”). However, how can a true DSM be created if key legislative proposals (such as the AVMSD) are only going for minimum harmonisation of national legislations? Minimum harmonisation in the European audiovisual sector means more – not less – fragmentation within the EU, as Member States can adopt stricter rules than the ones adopted at the European level.

That’s how we could end up, if current proposals from the European Parliament and the Council are adopted by the EU, with 28 codes of conduct or regulations on minor protection or on safeguards against violent content to be implemented. If these measures are indeed adopted, despite European initiatives already underway (such as the recent launch of the new European alliance to better protect children online), then why are we even bothering to try to create a DSM?

2) The undermining of the e-Commerce Directive

Less than two years ago, the European Commission decided not to regulate “platforms” as a whole, but to address the issue of “platform regulation” in every sectoral reform. Hence, we’re seeing instead an undermining of the limited liability regime of the e-Commerce Directive (“ECD”), legal cornerstone of the European digital sector, in various proposals.

This is the case with the proposed AVMSD , where proposals in the Parliament blur the line between broadcasters and video sharing-platforms, creating new obligations for the latter on a vast number of topics while raising legal uncertainty over who should be liable to make sure rules are respected. This could lead to general monitoring obligations for video-sharing platforms, who do not have editorial control over the videos uploaded by their users. Not only is this scenario largely infeasible, but it goes directly against the e-Commerce Directive. It would harm platforms of all sizes, but would have the largest impact on small and emerging ones, freezing European innovation in this sector.

3) The undermining of the Country of Origin Principle

This is an issue that has been especially overshadowed by the debate on quotas despite it being the most crucial issue of the reform for video-on-demand providers. As experts Rob Kenny and Tim Suter explained in a previous blogpost on DisCo, the key principle of Country of Origin – i.e. the fact that a company only has to apply the law of its Member State of establishment when providing a service in other Member States – has been removed for video-on-demand providers following the introduction of cross-border levies.

In short, video-on-demand services available across the EU will have to contribute to up to 28 different cultural national funds, creating important fragmentation within the Single Market, numerous unintended consequences and implementation challenges – all without meeting the Commission’s ostensible goal of establishing a “level playing field” between video-on-demand providers and broadcasters. Furthermore, the Council is also considering extending the scope of those cross-border levies to “all audiovisual media services” – i.e. allowing multiple regulation of video-on-demand providers and of broadcasters.

Again, with the introduction of measures unravelling the few existing benefits of the single market for digital players such as video-on-demand providers, why are we spending time and energy trying to create a Digital Single Market?

4) The scope of the AVMSD proposal

At this stage of the negotiations, it is also very difficult to understand the scope of the AVMSD proposal. For example, do the measures on video-sharing platforms also apply to social networks? Moreover, the Commission’s proposal removed the “TV-like” standard – which established a measure of “professionalism” for the content provided – from the definition of an audiovisual media service. So would the measures for AMVS apply only to “professionals” uploading their content on video-sharing platforms and social networks? Or would it apply also to individuals (like small YouTubers, for example), who are only producing some audiovisual content by uploading a video from time to time? The answers to these questions could have an important impact on the digital sector.

5) Protection of minors against harmful content

One of the aims of the European audiovisual rules is to ensure that minors are not exposed to harmful content – and so the EU institutions are looking at additional regulations to protect minors from harmful content available online. While looking at ways to achieve this crucial objective, EU institutions should make sure to strike the right balance between the existing self- and coregulation initiatives on minors protection and effective protection of children through legislative instruments.

It’s worth noting that many initiatives in this field have been launched these past few years. Video-on-demand providers, for example, have already implemented measures to ensure that minors cannot watch harmful content – through age ratings, a mandatory login before accessing any content and the setup of different user profiles for the same family. Furthermore, video-sharing platforms have community guidelines, ways for users to easily flag inappropriate comments/contents and the help of active users’ communities policing the platforms. The recent launch of the Alliance to Better Protect Children Online I referred to above is also a new sign of a dynamic ongoing coregulation process and the commitment of the digital industry to make it work. Finally, it’s also important not to be too prescriptive in terms of methods and/or tools to protect children online, so as to leave enough room for future (and potentially more efficient) technological developments in this field.

6) Advertising for children

In its complementary opinion on the file, the Parliament’s Internal Market and Consumer Affairs Committee adopted an amendment that would altogether ban advertising on content that is directed at children. Again, minors protection is indeed crucial. However, legislation is about achieving a balanced outcome. In this matter, the audiovisual industry is very active in making sure that children are not shown inappropriate ads. However, it is important to remember that advertising remains one of the major sources of financing for the industry – often the only one for free content online. Such an extreme ban would not be proportionate and would end up reducing the offers of content available for children.

As I hope to have demonstrated with those few examples, the reform of European audiovisual rules is not only about quotas of European content. I haven’t even mentioned the debates currently raging on prominence of certain types of content and the independence of audiovisual regulators! This is why such a key reform – one that will impact the European audiovisual sector, both off and online for more than 10 years – should be debated as transparently as possible.