COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 18.05.1998 
COM(1998) 332 final 
97/0198 (COD) 
Amended proposal for a European Parliament and Council Directive on the Legal 
Protection of Services based on, or consisting of, Conditional Access 
(presented by the Commission pursuant to Article 189 a (2) 
of the EC-Treaty) 

EXPLANATORY MEMORANDUM 
1. The initial proposal 
1. 1 Content 
Following the publication of the Green Paper on the Legal Protection of encrypted 
services which has launched a wide consultation process in 1996, and the Resolution 
adopted by the European Parliament on 13 May 1997, the Proposal for a European 
Parliament and Council Directive on the Legal Protection of Services based on, or 
consisting of, Conditional Access, was adopted by the Commission on 9 July 1997. 
This proposal aims at ensuring an adequate level of legal protection to television and 
radio broadcasting and information society services that are provided against 
remuneration and on the basis of conditional access. 
The proposed Directive will require Member States to prohibit and provide appropriate 
sanctions against a wide range of commercial piracy activities that relate to illicit (pirate) 
decoders, smart cards and software which allow the circumvention of conditional access 
systems and the receipt of a service free of charge. 
The proposed protection is limited to commercial piracy activities against services which 
use conditional access techniques to ensure their remuneration. 
• Protected service is defined under Article la) as a television or radio broadcasting or 
information society service as well as the provision of conditional access as a service 
in its own right. Consequently, the proposal does not only cover services such as pay-
television, or pay-radio but also services such as video-on-demand, music-on-demand, 
electronic publishing and a wide range of other on-line services. However to be 
covered by the proposal these services need to be offered under two conditions: 
- they must be provided on the basis of a conditional access device which is defined as 
any equipment or software designed or adapted to give access to a protected service in 
an intelligible form 
- the use of conditional access must aim be to ensure the remuneration of the service. 
• Infringing activities listed under Article 3 envisage solely commercial activities 
related to illicit devices, the latter being defined as equipment or software designed or 
adapted to give unauthorised access to a protected service, As a matter of 
proportionality and subsidiarity, it is left to the Member States to take measures 
against the private possession and use of illicit devices. 
^ 
1.2 Institutional procedure: 
The Commission adopted the proposal for a Directive on 9 July 19971. 
The proposal was transmitted to the European Parliament, the Council and the Economic 
and Social Committee on 22 September 1997. 
The Economic and Social Committee adopted its opinion on 25 February 1998. 
On 30 April 1998, the European Parliament adopted, on first reading and in accordance 
with the codecision procedure (Article 189b), a legislative resolution approving, subject 
to amendments contained in this resolution, the Commission's proposal and calling on 
the Commission to alter its proposal accordingly. 
2. The amended proposal 
2.1 The European Parliament's amendments 
The initial proposal has been amended to incorporate those amendments -which are 
acceptable for the Commission. In this respect, the Commission has accepted as many 
amendments as possible to take account of the European Parliament's aim to clarify and 
strengthen the proposal. Accordingly, amendments 1, 2, 3, 4, 6, 7, 8, 10, 12, 13, 14, 15, 
16, 17, 19, 23, 24 and 25, which are designed to clarify the initial text and to strengthen 
the objectives of the Directive, have been incorporated into the amended proposal, either 
in their integrity or at least in spirit. 
However, the Commission is unable to accept: 
- Amendments 5 and 20 which go beyond the objectives of the Directive by 
extending its scope of application. 
- Amendments 9, 11, 18, 21, 22 and part of 23, which are not entirely clear and 
could create legal insecurity. 
Com (97) 356 final published in the OJ n° C314 of 16.10.1997 
2.2 The amendments incorporated in the proposal 
The Commission's amended proposal is set out in the right hand column, with the 
amendments to the initial proposal underlined. 
For ease of understanding and comparison, the left-hand column shows the wording of 
the Commission's initial proposal. Only amended Recitals and Articles figure on this list. 
Recital 2 fully incorporates Parliament's amendment 1. 
Recital 3 adopts Parliament's amendment 2 in spirit but replaces the text by the exact 
wording of the Treaty 
Recital 3 a) new corresponds exactly to Parliament's amendment 3 
Recital 3 b) new corresponds exactly to Parliament's amendment 4 
Recital 5b) new corresponds exactly to Parliament's amendment 25 
Recital 6 corresponds exactly to Parliament's amendment 6 
Recital 8 a) new adopts Parliament's amendment 7 in spirit but adds the words "possible 
future" before Community or national provisions since no such legislation exists so far 
Recital 8 b) corresponds exactly to Parliament's amendment 8 
Recital 10 a) adopts partially Parliament's amendment 23 but in the more appropriate 
format of a recital instead of an addition to Article 3c 
Recital 10 b) adopts Parliament's amendment 10 but replaces the words "legally provided 
service", a notion which is not defined in the Directive by "protected service" as defined 
in Article 1 a) 
Recital 13 a) corresponds exactly to Parliament's amendment 12 
Recital 14 a) new corresponds exactly to Parliament's amendment 13 
Recital 14 b) new adopts Parliament's amendment 14 in spirit without the quote of the 
Commission's Communication on the role of penalties in implementing Community 
Internal Market legislation 
Recital 15 corresponds exactly to Parliament's amendment 15 
Recital 15 a) new adopts Parliament's amendment 16 but replaces the word "right" by 
"ability" because legally speaking viewers do not have such a "right" of access 
Recital 16 a), corresponds exactly to Parliament's amendment 17 
Article 1 a) corresponds exactly to Parliament's amendment 19 
Article 4.2 also corresponds exactly to Parliament's amendment 24 
i 
Amended proposal for a European Parliament and Council Directive on the Legal 
Protection of Services based on, or consisting of, Conditional Access 
Initial Proposal 
Recital 2: 
Whereas the cross-border provision of 
broadcasting and Information Society 
services may contribute significantly to 
the achievement of these objectives; 
Recital 3: 
Whereas the Treaty provides for the free 
movement of all services provided against 
remuneration ; whereas this right, as 
applied to broadcasting and Information 
Society services, is also a specific 
manifestation in Community law of a 
more general principle, namely the 
freedom of expression as enshrined in 
Article 10 of the European Convention for 
the Protection of Human Rights and 
Fundamental Freedoms; Amended Proposal 
Whereas the cross-border provision of 
broadcasting and Information Society 
services may contribute, from the individual 
point of view, to the full effectiveness of 
freedom of expression as a fundamental 
right and, from the collective point of view, 
significantly to the achievement of the 
objectives laid down in the Treaty 
Whereas the Treaty provides for the free 
movement of services which are normally 
provided for remuneration ; whereas this 
right, as applied to broadcasting and 
Information Society services, is also a 
specific manifestation in Community law of 
a more general principle, namely the 
freedom of expression as enshrined in 
Article 10 of the European Convention for 
the Protection of Human Rights and 
Fundamental Freedoms; whereas this 
Article explicitly recognises the right of the 
citizens to receive and impart information 
regardless of frontiers and whereas any 
restriction of that right must be based on 
due consideration of other legitimate 
interests deserving of legal protection; 
Recital 3a) new 
Whereas conditional access systems should 
not be used for the sole purpose of refusing 
access for consumers in some Member 
States to services which are freely available 
in other Member States, 
X 
Recital 3 b) new 
Recital 5b) new Whereas this Directive should grant 
protection against illicit (pirated) devices 
i.e. devices which are explicitly designed or 
technically adapted for unauthorised 
reception; 
Whereas the encryption of broadcasting 
services must not 
inconsiderately deprive the average viewer 
of these services if they were 
orginally available without charge; 
Recital 6 
Whereas the opportunities offered by 
digital technologies provide the potential 
to increase consumer choice and 
contributing to cultural pluralism, by 
developing an even wider range of 
services within the meaning of Articles 59 
and 60 of the Treaty; whereas the viability 
of those services will often depend on the 
use of Conditional Access in order to 
obtain the remuneration of the service 
provider; Whereas the opportunities offered by digital 
technologies provide the potential to 
increase consumer choice and contribute to 
cultural pluralism, by developing an even 
wider range of services within the meaning 
of Articles 59 and 60 of the Treaty; whereas 
the viability of these services will often 
depend on the use of Conditional Access in 
order to ensure remuneration of the service 
provider; whereas accordingly the legal 
protection of service providers against illicit 
devices which allow access to these services 
free of charge seems necessary in order to 
ensure the economic viability of the services 
Recital 8 a) new Whereas this Directive is without prejudice 
of possible future Community or national 
provisions meant to ensure that a number of 
broadcasting services, recognised as being 
of public interest, are not based on 
conditional access; 
Recital 8 b) new Whereas this Directive is without prejudice 
of the cultural aspects of any further 
Community action concerning new services, 
£ 
Recital 10 a) new 
Recital 10 b) new Whereas these commercial activities which 
concern illicit devices include commercial 
communications covering all forms of 
advertising, sponsorship, sales promotion 
and public relations promoting such 
products and services; 
Whereas it seems necessary to ensure that 
Member States shall provide adequate legal 
protection against any individual or group 
using an illicit device for direct or indirect 
profit, knowingly or with reasonable 
grounds to know that they will enable or 
facilitate without authority the 
circumvention of any effective, 
technological measure designed to protect 
the remuneration of a protected service 
Recital 13 a) new 
Recital 14 a) new Whereas the sanctions and remedies 
provided for under this Directive are 
without prejudice to any other sanction or 
remedy for which provisions may be made 
under national law, such as preventive 
measures in general or seizure of illicit 
devices; 
Whereas in accordance with Article 5 of the 
Treaty, the Member States are required to 
take all measures necessary to guarantee the 
application and effectiveness of Community 
law, in particular by making the penalty 
chosen effective, proportionate and 
dissuasive, 
Recital 14 b) new Whereas when adopting the provisions laid 
out by this Directive, Member States should 
be in accordance with the Communication 
from the Commission to the Council and the 
European Parliament on the role of penalties 
in implementing Community Internal 
Market legislation; 
} 
Recital 15: 
Whereas this Directive should be without 
prejudice to the application of national 
provisions which may prohibit the private 
possession of illicit devices; whereas this 
Directive is without prejudice to the 
application of Community competition 
rules; whereas this Directive is without 
prejudice to the application of Community 
rules concerning intellectual property 
rights 
Recital 15 a) new Whereas this Directive is without prejudice 
to any measures by Member States seeking 
to prohibit the private possession of illicit 
devices; whereas this Directive is without 
prejudice to the application of the 
Community competition rules; whereas this 
Directive is without prejudice to the 
application of Community rules concerning 
intellectual property rights 
Whereas this Directive is without prejudice 
to the ability of the viewer to have access to 
free-to-air channels within a conditional 
access service platform without being 
required to pay an additional fee beyond the 
normal charge for accessing the platform; 
Recital 16 a) new Whereas a balance must be secured between 
the interest of the service providers and 
copyright holders to be remunerated for 
their services (by encryption) on the one 
hand and the interest of the general public 
not to be excluded more and more from 
information and cultural events; 
Article 1 a): 
....or the provision of conditional access This term also covers the provision of 
to the above service in its own right conditional access to the above services, 
considered as a service in its own right. 
Article 4.2 
Each Member State shall take the 
measures necessary to ensure that service 
providers, whose interests are affected by 
an infringing activity carried out on its 
territory, can bring an action for damages 
and/ apply for an injunction and, where 
appropriate, for the seizure of illicit 
devices Each Member State shall take the measures 
necessary, pursuant to its legislation, to 
ensure that service providers, whose 
interests are affected by an infringing 
activity carried out on its territory, can bring 
an action for damages and/ apply for an 
injunction and, where appropriate, for the 
seizure of illicit devices 
g 
ISSN 0254-1475 
COM(98) 332 final 
DOCUMENTS 
EN 10 09 01 06 
Catalogue number : CB-CO-98-339-EN-C 
ISBN 92-78-36473-8 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
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