AVMS Directive reform: Video-Sharing Platforms Regulatory Framework

1. Background. AVMSD Reform and DSM Strategy
 
On 25 May 2016, the EU Commission adopted a new legislative proposal ("Proposal") amending the Audio-Visual Media Services Directive no. 2010/13/EU ("AVMSD") and very recently (24 May 2017) EU Council adopted its "General Approach" on the Proposal.
 
The revision of the AVMSD is one of the key elements of the EU Digital Single Market Strategy ("DSM"), along with the Copyright Reform –including the EU Commission proposal for a regulation on cross-border online content portability –the review of the Satellite and Cable Directive, the General Data Protection Regulation no. 679/2016/EU (and many other pieces of law).
 
During the drafting process, EU Commission acknowledged that while viewers (and especially minors) were shifting from traditional TV to online, the regulatory burden remained much higher on TV (e.g., on advertising thresholds, content quotas, minors' protection). The ambitious aim of the Proposal is therefore to introduce flexibility when restrictions only applicable to TV are no longer justified and to ensure an adequate consumers' protection in the AVMS provided online.
 
In this context, an ad hoc regulatory framework on video-sharing platforms has been set out, which represents one of the most important innovations brought by the Proposal.
 
In particular, Mr. Andrus Ansip (Vice-President of the European Commission and Commissioner for the Digital Single Market) in his speech accompanying the publication of the Proposal argued that "[The] aim is that online platforms, the creative sector and the audio visual sector become the driving forces of the digital economy; I do not want them to be weighed by useless or overdue standards. They need the certainty of a modern and equitable legal framework […]. This does not mean that the provisions currently in force need necessarily to be amended, such as those relating to the responsibility of online service providers. It means deregulating, as necessary, traditional sectors such as broadcasting, or extending certain obligations to platforms and other digital operators to improve user’s protection and ensure equal conditions".

2. Video-Sharing Platforms: Current Italian and European Regulatory Framework
 
The Italian AVMS Code – in accordance with the AVMSD – expressly states that video-sharing platforms do not fall within its scope of application (mainly because there would be no accountability/editorial responsibility in connection with the user-generated content).

As a consequence, the regulatory framework on video-sharing platform is mainly laid down by the Directive no. 2000/31/EC (so called “E-Commerce Directive”), according to which video-sharing platform providers should be regarded as "hosting providers" and so they benefit from the “no general obligation to monitor” principle set forth by Section 15 of the same Directive.
 
3. Definition of "Video-Sharing Platform Service" under the Proposal
 
In the scenario drawn up sub paragraphs 1. and 2., the Proposal sets forth a brand-new definition of “video-sharing platform service” which falls within the scope of the AVMSD, i.e. the service which meets the following requirements:
 
A. the service consists of the storage of a large amount of programmes or user-generated videos, for which the video-sharing platform provider does not have editorial responsibility;
 
B. the organisation of the stored content is determined by the provider of the service, including by automatic means or algorithms, in particular hosting, displaying, tagging and sequencing;
 
C. the principal purpose of the service is the provision of programmes and user-generated videos to the general public, in order to inform, entertain or educate;
 
D. the service is made available by electronic communication networks.
 
It is worth noting that the General Approach added new Recitals to the Proposal, according to which:
 
a) Member States maintain the ability to impose obligations on providers of live-streaming services in compliance with EU Law, so that the AVMSD would apply only to video-sharing platforms "designed to deal only with stored content". A definition of "stored content" would be advisable, as certain modalities of AVMS exploitation could not imply a full storage of content, but rather a combination of streaming and downloading;
 
b) social media services may be caught by the definition of video-sharing platforms, because they compete for the same audiences and revenues as the AVMS, to the extent "the provision of programmes and user-generated videos constitute an essential functionality of that service";
 
c) a video-sharing platform may be constituted (merely) by a dissociable section of the service/website, only that section being covered by the provisions applicable to video-sharing platforms (and only as regards programmes and user-generated videos).
 
4. "Video-Sharing Platform Services": Regulatory Framework
 
The EU Commission remarked that “[it]will maintain the existing intermediary liability regime while implementing a sectorial, problem-driven approach to regulation”.
 
That said, Section 28a of the Proposal obliges video-sharing platform providers to:
 
A. protect minors from content which may impair their physical, mental or moral development;
 
B. protect the general public from content containing incitement to violence or hatred directed against a group of persons or a member of such a group defined by reference to sex, race, colour, religion, descent or national or ethnic origin;
 
C. protect the general public from content containing a public provocation to commit a terrorist offence.
 
The features of such obligations depend on the type of content displayed and shall consist of ("as appropriate"):
 
a) defining and applying in the terms and conditions of the video-sharing platform the concepts of incitement to violence or hatred as referred to in letter B. and C. above (and of content which may impair the physical, mental or moral development of minors);
 
b) establishing and operating mechanisms for users of video-sharing platforms to report or flag to the video-sharing platform provider concerned harmful content as per letters A. and B. above;
 
c) establishing and operating age verification systems;
 
d) establishing and operating systems allowing users of video-sharing platforms to rate the harmful content as per letters A. and B. above. This is particularly worth noting, as rating systems currently in force are generally based on a self-assessment carried out by AVMS providers;
 
e) providing parental control systems (in connection with content which may cause prejudice to minors);
 
f) providing systems through which the users’ reporting as per letter b) above is actually enforced (or the reasons why it has not been enforced);
 
g) providing for effective media literacy measures and tools and raising users' awareness of these measures and tools.
 
The Commission provides that the above obligations shall be further detailed by Member States, also through a co-regulation procedure (i.e., codes of conduct). This approach is aimed at ensuring a tailor-made regulation; however, it could determine regulatory asymmetries in this field, to be carefully assessed also in light of the rules on jurisdiction set out by the Proposal (as amended by the General Approach).
 
The latter conclusion has also been flagged by the European Audiovisual Observatory which, along with the European Platform of Regulatory Authorities (EPRA) on 17 January 2017 published the summary (available here) of a workshop entitled "Addressing Regulatory Asymmetries: Video-Sharing Platforms, Targeting On-Demand Services, and Services Outside the EU".
 
In addition, Member States may impose on video-sharing platform providers measures that are more detailed or stricter than the measures referred to above, in compliance with EU Law and, in particular, with the liability regime laid down by the E-Commerce Directive (see par. 2.).
 
The Proposal will likely be subject to further amendments. That said an adequate set of regulations on video-sharing can be a great opportunity to further promote the development of the European audiovisual industry, and at the same time foster consumers (and minors) protection.
 
Giangiacomo Olivi is the partner of DLA Piper Italy where he heads the Italian Intellectual Property and Technology Department and the Media Sports and Entertainment Sector Group. He is also the Global Co-Chair of the Firm's Retail Group. He is based in the Milan office. Since 2006, Chambers & Partners Europe, The Legal 500 EMEA and a number of other client surveys have identified Mr. Olivi as a leading individual in the telecoms, media and technology field. Since 2008, the group led Mr. Olivi has been awarded as leading team in the field. Limiting to 2017, he was awarded as TMT "Lawyer of the Year" by Legalcommunity and DLA Piper Italy was awarded as TMT "Law Firm" of the Year by Top Legal.

Giangiacomo cam be contacted +39 02 80 618 1 or by email at giangiacomo.olivi@dlapiper.com
 
Saverio Cavalcanti is an associate in the Intellectual Property and Technology Department of DLA Piper Italy and he is based in the Rome office. Mr. Cavalcanti focuses on a number of issues in the field of technology, media and telecoms. He advises clients on audio-visual media services-related issues (including copyright), data protection, telecommunications and unfair commercial practices. Mr. Cavalcanti also advises on the negotiation and drafting of commercial contracts, outsourcing contracts for IT services and licensing of intellectual property rights. On 2014 he achieved an LL.M. in Competition and Media Law at Queen Mary, University of London and is a member of the Licensing Executives Society (LES) and AIPPI.

Saverio can be contacted on +39 02 806181 or by email at Saverio.Cavalcanti@dlapiper.com