COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE ECONOMIC AND SOCIAL COMMITTEE - concerning regulatory transparency in the internal market for information society services
Date: 1996-08-30
Institutions: European Commission
Subjects: European standard, information, single market, standardisation, technical regulations

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

Brussels,  30.08.1996 
COM(96)  392 final 

%/<>220 (COD) 

COMMUNICATION  FROM  THE  COMMISSION 
TO THE EUROPEAN  PARLIAMENT.  THE  COUNCIL 
AND  THE ECONOMIC  AND  SOCIAL  COMMITTEE 

concerning  regulatory  transparency  in  the  internal  market  for 
information  society  services 

Proposal  for  a 
EUROPEAN  PARLIAMENT  AND  COUNCIL  DIRECTIVE 

amending  for the  third time  Directive  83/189/EEC  laying  down  a 
procedure  for  the  provision  of  information  in the  field  of 
technical  standards  and  regulations 

(presented  by  the  Commission) 

Executive summary 

Introduction 

I. 

A. 

B, 

Information Society services in the Internal Market 

Towards a European market for services 

The current legal framework  of the Internal Market 

II. 

The need for a transparency  mechanism 

A. 

B. 

The outlook for regulatory activity in the Member States 

The risks to the functioning  of the Internal Market 

III.  Description  of the transparency  mechanism 

Objectives 
General approach 
Legal instrument 
Scope 
Legal basis 
Subsidiarity 

A. 
B. 
C. 
D. 
E. 
F. 
IV.  Proposal for a Directive 

Table of contents 

Executive summary 

INTRODUCTION 

, 

I. 

INFORMATION  SOCIETY  SERVICES  IN  THE  INTERNAL 
MARKET..... 

.......'..... 

A.  Towards a European market for services 
1.  A wide diversity of services 
2. 
3.  Geographic differences in the development of new markets 
4. 

An inevitable growth in the level of cross-border services 

A gradual development of markets 

B.  The current legal framework  of the Internal Market... 

H.  THE NEED FOR A TRANSPARENCY MECHANISM 

A.  The outlook for regulatory activity in the Member States... 

Preregulatory mobilisation in the Member States 

1. 
2.  New regulatory needs 

a. 
b. 

The need for  new forms  of protection 
The need to scale down existing forms  of protection 

3.  A wide-ranging and drawn-out regulatory adjustment 

(a)  A broad spectrum of rules and regulations 
(b)  A vague and very drawn-out timetable... 
B.  The risks to the functioning  of the Internal Market..... 

1.  Risks of refragmentation  of the Internal Market 
2.  Risks of overregulation...... 
Risks of inconsistency 
3. 

III.  DESCRIPTION OF THE TRANSPARENCY MECHANISM 

A.  Objectives 
B.  General approach 

1. 
2. 

Experience gained with existing transparency mechanisms 
The proposed transparency mechanism 

C.  Legal instrument 
D. 

Scope.. 

1.  Regulations concerning services that must be notified. 
2. 
E.  Legal basis 
Subsidiarity 
F. 

Exceptions 

IV. 

PROPOSAL FOR A DIRECTIVE 

± q_ 

1 

d 

^4 
4 
4 
6 
7 
8 

9 

14 
14 
14 
18 
19 
20 
21 
21 
22 

23 
23 
24 
25 

26 
26 
28 
28 
31 
33 
34 
34 
36 
37 
38 

40 

1. 

2. 

3. 

4. 

Executive summary 

The  purpose  of  this  communication  and  of  the  accompanying  proposal  for  a 
Council Directive is to establish at Community level a procedure for the provision 
of information and the holding of consultations on possible future draft  rules and 
regulations on Information  Society services. 

As part of its general policy on the Information Society, the Commission is keen 
to develop a legal framework  enabling  inter alia the new services which will be 
provided in the Information  Society to benefit from the opportunities afforded  by 
the  area  without  internal  frontiers,  while  bearing  in  mind  both  the  fundamental 
objectives to be pursued in the general interest and the social, societal and cultural 
factors that come into play.  These services will be (or already are) highly diverse 
and  include  electronic  newspapers,  distance  education  or  healthcare  services, 
distance tourism services, the distance selling of goods and services by electronic 
means, distance betting services, interactive games and leisure activities, etc.  The 
feature  they  all  have  in  common  is  that  they  are  provided  electronically  at  a 
distance and are intended to meet one or more specific  requests by an individual 
service receiver.  Owing to this latter characteristic, the services are "interactive" 
inasmuch  as  the  provider  responds  to  specific  requests  from  a  receiver  and 
vice-versa. 

The  area  without  internal  frontiers  is  a  key  factor  in  the  development  of  these 
services  as  it  will  enable  them  to  cross  borders,  thereby  providing  ordinary 
citizens with new ways of communicating  and receiving  information,  consumers 
with  new,  reliable  forms  of  access  to  goods  and  services,  and  the  European 
their 
industries  with  new  opportunities 
service  supplying 
competitiveness. 

increase 

to 

the 

Internal  Market, 

in  particular  Articles 52 

At present, these services are not developing in a legal vacuum: the body  of law 
(freedom  of 
governing 
establishment) and 59 (freedom to provide services) of the Treaty and the existing 
secondary  legislation,  already  constitutes  a  basic  legal  framework.  However, 
those involved in the considerable amount of analysis that has been undertaken on 
the  subject  at  both  national  and  Community  level  (studies,  reports  and  think 
tanks) agree that the current national  rules and regulations  applicable  to  existing 
services  need  to  be  adapted  to  take  account  of  the  peculiarities  of  the  new 
Information  Society  services,  and  predict  a  surge  of  regulatory  activity  in  this 
area.  Indeed, these services might give rise to different  risks from those covered 
by  the  existing  rules  and  regulations  on  traditional  services  or  on  television 
broadcasting or telecommunication  services.  Accordingly, it will be necessary to 
amend  the existing  rules and regulations either to  allow then  to  better  safeguard 
the general  interest or, instead, to scale them down where their application  is no 
longer  justified.  Moreover,  the  intense  interest  in  the  Information  Society 
confirms  that  we  are  on  the  eve  of  a  substantial  alteration  to  the  regulatory 
framework. 

5. 

Without  co-ordination  at Community  level, there  is every  reason  to  believe  that 
these  new  rules  and  regulations  in  the  Member States  will  be  highly  divergent 
from  one Member State to another, each of them being motivated  by concerns of 
their  own stemming from  a different  perception of the general  interest  objectives 

ifc-

to  be  pursued.  This  future  regulatory  activity  thus  creates  a  serious  risk  of 
refragmentation  of the Internal Market, that is to say, of the introduction of new, 
unjustified  or  excessive  obstacles  to  the  free  movement  of  services  between 
Member States  and  to  the  freedom  of  establishment  for  the  providers  of  such 
services, which might,  moreover,  have repercussions  at Community  level  in the 
form of overregulation or mutually inconsistent regulations. 

At  the  same  time,  in  view  of  the  cross-border  dimension  of  the  new  services, 
isolated,  uncoordinated  national  initiatives  might  prove  ineffective  in  terms  of 
protecting  legitimate  general  interest  objectives  and  might  well  lay  themselves 
open  to  circumvention,  notably  through  geographical  relocation  and  "forum 
shopping" by the operators concerned. 

There  is,  therefore,  a  clear  need  for  co-ordination  at  Community  level  of  this 
future  regulatory  activity  in  order  to  forestall  any  such  refragmentation  of  the 
Internal Market and to pursue more incisively  general interest objectives  that are 
worthy  of protection.  It would be premature, for  the purpose  of achieving  such 
co-ordination, to propose extensive and exhaustive harmonisation  at  Community 
level of the substantive rules applicable to Information  Society  services, without, 
of course, prejudice to those fields that are already subject to specific  Community 
regulation  such  as, for  example, the telecommunications  sector.  In  general,  not 
enough  is  known  about  the  form,  nature  and  market  development  of  these  new 
services  for  it  to  be  possible  to  determine  the  need  for,  and  content  of,  such 
harmonisation  in the light of the Internal  Market.  The Commission  accordingly 
proposes  to  co-ordinate  these  future  rules  and  regulations  by  means  of  an 
information, consultation and administrative co-operation procedure. 

Obviously, this does not preclude in certain specific  areas, the launching of work 
to examine the need for  action at Community  level with a view to  safeguarding 
certain general interest objectives. 

in 

laid  down 

respect  of  draft 

The  procedure 
rules  on  goods  by 
Directive 83/189/EEC of  28 March 1983 already  pursues  precisely  the  objective 
of  establishing  a  co-ordination  procedure.  The  fact  that  more  than  ten  years' 
experience  has  been  gained  in  applying  this  Directive  demonstrates 
its 
effectiveness,  since  it  is  the  most  extensively  used  regulatory  transparency 
mechanism  to  date.  The  administrative  co-operation  it  provides  for  and  the 
procedures  it  lays  down  are perfectly  suited  to  the  needs  raised  by  Information 
Society services.  The Commission accordingly proposes to widen the Directive's 
scope  so as to include draft rules and regulations on Information  Society services. 

6. 

7. 

8. 

The proposal for an extended Directive pursues several objectives: 

•  permitting  the  smooth  functioning of  the  Internal  Market  particularly  by 
preventing  the  creation of  new  obstacles via  the  exchange  of  information 
between  Member States  and  between  Member States  and  the  Commission. 
Depending  on  the  issue  at  hand,  this  information  exchange  will  make  it 
possible either to forestall the appearance of national rules and regulations that 
are  incompatible  with  the  principles  of  free  movement  of  services  and 

1C 

freedom of establishment, or, where the national rules envisaged are likely to 
result in justified  legal barriers pursuing general interest objectives worthy of 
protection,  to  detect the need  for new Community  rules aimed  at removing 
those barriers; 

•  ensuring  more  effective  safeguarding of  general  interest  objectives  by 
anticipating  the  need  for  Community  intervention  aimed  at  ensuring  an 
adequate,  equivalent  level  of  protection  between  Member States.  The 
domestic  concerns  which  may  induce  a  Member State  to  legislate  may  be 
shared  by  other  Member States  and  may  be  more  effectively  met  by  co 
ordinated protection at Community level; 

•  establishing more clearly and reducing  the need for new Community  rules 
and regulations by permitting  a more  effective  application  of  the  Treaty,  in 
particular  Articles 52 and  59 thereof,  and  of  Community  law,  together  with 
closer  co-operation  between the Member States.  A transparency  mechanism 
would make a valuable contribution here by making it possible, upstream, to 
prevent  or  limit  the  adoption  of  certain  domestic  laws  which  subsequently 
could  give  rise  toregulation,  at  Community  level  in  an  attempt  to  validate 
them which was not really necessary; 

• 

facilitating administrative  co-operation  at the  stage  of the  drafting  of  rules 
and  regulations  by  encouraging  the  national  legislator  to  ask  other  national 
administrations  about  the  situation  in  the  other  Member States  so  as  not  to 
legislate  in  isolation  without  regard  to  experience  gained  elsewhere  and  the 
impact on service providers and receives established in other countries; 

•  contributing to  the  stability  of  the  regulatory framework, first of  all  by 
limiting  the risk  of unforeseeable  regulatory  reactions, secondly  by  avoiding 
the  periods  of  uncertainty  resulting  from  infringement  proceedings  brought 
against  Member States  for  failure  to fulfil  their  Community  obligations,  and 
thirdly by enabling operators, competent national authorities and consumers to 
have  more  information  about,  and  contribute  to,  draft  rules  and  regulations 
potentially affecting  them. 

9.  The  transparency  mechanism  would  cover  draft  national  rules,  except  those 
aimed  at  implementing  any  Community  Directive, whether  present  or  future, 
on  the  taking-up  and  pursuit  of  service  activities  where  the  services  are 
provided  by electronic means at a distance and on the individual  request  of a 
service receiver (element of "interactivity").. 

10.  The  transparency  mechanism  should,  as  far  as possible,  be  supplemented  by 
regulatory  and  administrative  co-operation  procedures  at  international  level 
with  a  view  to  establishing  a  stable,  coherent  regulatory  framework  on  a 
broader  front. 

11.  The  proposed  transparency  mechanism  reproduces  the  procedural  measures 

laid down in Directive 83/189/EEC: 

\ 

4~ à 

a procedure for the provision of information on draft rules and regulations on 
the services defined  above: the Member States would have to communicate to 
the  Commission  any  draft provision  which will be  applicable  to  Information 
Society  services.  The  Commission  will  forward  the  information  to  all  the 
other Member States in order to make them aware of national initiatives; 

a consultation procedure: following notification  of the draft rule or regulation, 
an  initial  standstill  period  of  three months, starts  to  run  during  which  the 
Member States and the Commission may make comments or deliver a detailed 
opinion (in which case the total standstill period is extended to six months), or, 
in the  case  of the  Commission,  declare  that  a future  harmonisation  proposal 
will be presented or that it has already proposed harmonisation measures in the 
field  concerned  (in  which  case  the  total  standstill  period  is  extended  to 
twelve months and may be as long as eighteen months). 

a  committee:  the  committee  of  Member States'  representatives  already 
provided for in Directive 83/189/EEC will enable the authorities to stimulate a 
dialogue  between  Member States'  legislators  and  promote  administrative  co 
operation.  At  a  time  when  in  many  Member States  talks  on  the  legal 
framework  for services are already under way, the committee might  constitute 
a particularly useful  forum in which the authorities can meet and express their 
views. 

j^Q^ 

COMMUNICATION  FROM  THE  COMMISSION 
TO THE EUROPEAN  PARLIAMENT.  THE  COUNCIL 
AND  THE ECONOMIC  AND  SOCIAL  COMMITTEE 

concerning  regulatory  transparency  in the  internal  market  for 
information  society  services 

INTRODUCTION 

The  Commission's  policy  on  the  Information  Society  was  defined  in  its  action  plan 
entitled  "Europe's  way  to  the  Information  Society:  an  action  plan".1  As  part  of  this 
general  policy  on the  Information  Society,  in  March 1995 the  Commission  defined  its 
regulatory  policy  in relation  to Information  Society  services, that  is to  say, the various 
services  that  will  be  carried  on  the  information  superhighways.2  A  full  range  of 
interactive  services  will  be  made  available  to  consumers,  including,  for  example, 
electronic newspapers, distance learning, distance legal and healthcare  services, distance 
tourism  services,  electronic  commerce  involving  goods  and  services,  distance  betting 
services, interactive games, leisure services, etc. 

These services are, in general terms, characterised by the fact that they are provided  at a 
distanceT by electronic means, and are intended  to satisfy  one or more specific  requests 
by  an  individual  service  receiver.  Owing  to  this  latter  characteristic,  they  are 
"interactive"  services  inasmuch  as  the  provider  can  react  to  specific  requests  from  a 
receiver  and vice versa.  These  services, hereinafter  referred  to  as  "Information  Society 
services",  are  therefore  different  from  television  broadcasting  services  in  that  the 
consumer can interactively gain access to them, manipulate them, and choose and control 
their content in order that they might meet his own distinct requirements.  However, they 
also differ  from  traditional  professional  services which normally  require the provider  or 
receiver to travel to or from the home (e.g. medical, legal or educational services) in that 
they  are provided  at  a distance  by  electronic  means.  The  social,  societal,  cultural  and 
economic  implications  of this diversity  of  services are clear: ordinary  will  above  all  be 
afforded  new  opportunities  for  transmitting  and  receiving  information  regardless  of 
frontiers or distances; a dynamic economic sector will come into being; and such services 
will be the main raison d'être (apart from the development of telecommunication  services 
proper)  for  the  development  of  information  networks  and  technologies 
in  the 
European Union.  There are also clear implications for European integration inasmuch as, 
by doing  away  with  the  distance  factor,  such  services  will  be a means  of achieving  an 
ever-closer  union  among  the  peoples  of  Europe  and  of  establishing  closer  relations 
between the States belonging to the Union. 

In this context, the frontier-free  area of the Internal Market is a key factor  in the success 
of  the  Information  Society  as  the  considerable  investment  needed  to  develop  such 
services  will  be  undertaken  only  if  it  is  possible  to  achieve  economies  of  scale,  target 
niche  markets,  and  distribute  the  services  throughout  Europe.  Thus  potential  markets 
which at national  level are too small to be profitable  may become interesting  if they are 
exploitable in all the Member States. 

Communication  from  the  Commission  to  the  Council  and  the  European  Parliament  and  to  the 
Economic  and  Social  Committee  and  the  Committee  of  Regions,  COM(94)347  final,  Brussels, 
19 July  1994.  The  action  plan  was  drawn  up  following  the  Corfu  European  Council 
(24-25 June  1994), which stressed the need for creating "a clear and stable regulatory  framework" 
for the Information  Society  and which  invited the Commission to establish  as soon  as possible a 
program  of  measures  needed  at  the  Community  level  to  complete  the  regulatory  framework. 
Previously,  the  report  by  the  High-Level  Group  on  the  Information  Society,  chaired  by 
Mr Bangemann, had stressed the importance of adopting a single legislative  approach  which was 
both  consistent  and  relevant  and  at  the  same  time  flexible  enough  to  evolve  with  the  new 
technologies and new markets. 

"Information  services -  Establishment  of  a  regulatory  framework".  Memorandum 

from 
Mr Bangemann,  Mr Oreja  and  Mr Monti,  adopted  on  22 March  1995.  See  also  the  explanatory 
memorandum  accompanying  the  proposal  for  a  Directive  amending  Directive 89/552/EEC, 
COM(95)86 final of 31  May  1995, p. 27. 

A  C\ 

The Commission's regulatory approach to Information Society services must be designed 
precisely  to  meet  these  challenges  by  ensuring  a  clear,  secure  and  coherent  legal 
framework.  In this respect, the Commission considers it would be both premature and 
risky to seek, at this stage, to lay down extensive and specific Community rules on these 
new services.  Indeed, inasmuch as their form, nature and development on the market are 
still unknown quantities, not enough is known about the needs and problems which might 
justify  Community  action.  Moreover,  there  is  no  legal  vacuum  since  existing 
Community  law  and,  in  particular,  the  rules  governing  the  Internal  Market  already 
constitute a basic legal  framework. 

However, this by no means implies that action is not called for.  It is already clear that the 
development of the Information Society will in future be accompanied by new rules and 
regulations  at  national  level  which  will  alter  the  existing  legal  framework.  If  this 
regulatory activity is not co-ordinated  at Community level, a refragmentation  of the area 
without  internal  frontiers,  overregulation  and  regulatory  inconsistencies  might  ensue  to 
the detriment of the development  of Information  Society services and of the pursuit and 
effective  safeguarding of the relevant general interest objectives. 

It  is  to  counter  these  risks  that  the  Commission  has  decided  that  one  of  the  priority 
measures  at  Community  level  must  be, at  this  stage, to  organise  this  future  regulatory 
activity  by  proposing  a regulatory  transparency  mechanism  which  seeks  to  ensure  the 
transparency of future draft national rules and regulations and their compatibility with the 
principles of the area without internal frontiers and the other objectives pursued. 

This does not imply that the Commission will not present other specific  initiatives.  The 
Commission  has already  clearly  envisaged  this possibility, first by  deciding  that  future 
Community regulatory initiatives will have to be anchored  in the legal framework of the 
Internai  Market  and  respect  the  principle  of  regulatory  consistency,  and  secondly  by 
launching  preparatory  work  in  the  form  of  the  analysis  of,  or  the  organisation  of 
consultations  concerning,  specific  questions  which  have  already  been  identified  with  a 
sufficient  degree  of  accuracy.  The  Commission  has  thus  recently  adopted  three 
Green Papers:  the  Green  Paper  on  copyright  and  related  rights  in  the Information 
Society,3 the  Green  Paper  on  legal protection for  encrypted services, and,  finally,  the 
Green  Paper  on  commercial  communications in the Internal Market, all  of  which  have 
been or are the subject of in-depth consultations.  Two other Green Papers are also being 
living and  working  in  the  Information Society  and  another  on  the 
prepared,  one  on 
development of  the new audiovisual services, which  will  deal  with  the  question  of  the 
safeguarding  of certain general  interest  objectives,  notably  the protection  of minors and 
the promotion of cultural and linguistic diversity, and the question of the development of 
the new audiovisual services. 

The  regulatory  transparency  mechanism  proposed  hereinafter  represents  therefore  an 
important  step  in  the  establishment  and  organisation  of  the  legal  framework  of  the 
Information  Society  and  is motivated  by the  desire to  ensure that  the  service  industries 
derive  suitable  benefit from the  area  without  internal  frontiers.  It thus  forms  part  of a 
coherent  policy  aimed  at  ensuring  a  balanced  development  of  the  Information  Society 

COM(95)382 final of 19 July 1995. 

which takes account of the variety of general interest objectives concerned, notably those 
relating to social, societal and cultural aspects. 

\ 

It is also an essential means of enabling the Community to take part more effectively  and 
consistently  in  the  debate  and  in  the  handling  of  regulatory  issues  of  the  Information 
Society in the context of international co-operation.  ^ 

I. 

INFORMATION SOCIETY SERVICES TN THF, INTERNAL MARKET 

The  development  of  the  regulatory framework for  the  Information  Society  is  closely 
linked to the market for services.  It would appear that we are on the eve of a  significant 
expansion of that market in Europe (A) and that a basic legal framework (B) is already in 
place. 

A.  Towards a European market for services 
The new national rules and regulations will depend to a large extent on the development 
of the market for  services in the Information  Society.  As these  services  arrive, one by 
one,  on the market or as their forthcoming  arrival impacts on public opinion, regulatory 
needs will arise.  It is therefore  essential first of all to identify  the key characteristics of 
the development of the market for those new services which are likely to have an impact 
at the regulatory level. 

I.  A Wide diversity of services 

All the services currently known or being developed and a large number of new services 
exploiting  new  possibilities  might  form  part  of the Information  Society.  The  common 
denominator  of  all  Information  Society  services  will  be  the  special  role  played  by  the 
final consumer  in the chain, and more precisely  the fact  that the marketing,  sale and/or 
distribution of the  services will be provided to the consumer at a distance, by  electronic 
means and on his individual request. 

In  the  light  of  these  key  factors,  the  range  of  services  proposed  by  the  Information 
Society  is  immense.  Already, the on-line  services  offered  and planned  for  sale  on the 
market cover a great many  fields.  Active both in the more innovative fields and in the 
more  traditional  fields  (health,  education,  publishing,  consumer  goods,  etc.),  operators 
have already begun to evaluate and exploit the opportunities afforded  by the inclusion of 
direct  electronic  interactivity  in their  relations  with  consumers.  In the  light  of  current 
analyses,4 the following  examples can be given of services already  available or planned 
for the future: 

See,  for example: 

EUROPEAN INFORMATION TECHNOLOGY OBSERVATORY (OETI), "European  Information 
Technology  Observatory 95",  Germany,  1995; LAURENT  ABRIL  and  others,  "Développement 
d'un  environnement multimédia en Europe: Besoins pour  le développement  d'un  Environnement 
Multimédia fondé sur les Infrastructures  de Télécommunications et les Réseaux de Télévision par 
Cable".  Final  report  for  DG XIII  of  the  European Commission,  DEVOTECH  Conseil  and 
ANALYSIS, January  1995; EUROPEAN  IT INDUSTRY  ROUND TABLE,  "Multimedia  in the 
Fourth  Framework  Program",  Workshop report,  Brussels, June  1,  1994; MINISTRY  OF POSTS 
AND  TELECOMMUNICATIONS,  "Reforms  toward  the  Intellectually  Creative  Society  of  the 
21st  Century,  Program  for  the  Establishment  of  High-Performance  Info-Communications 
Infrastructure",  Japan,  May 31,  1993; ZENITH  MEDIA,  "New  Interactive  Media:  The  Practical 
Guide",  Zenith  Media,  April  1995;  AFTEL,  "La  télématique  française  en  marche  vers  les 
autoroutes  de l'information",  Les éditions  du téléphone, Paris,  1994; THIERRY  BRETON,  "Les 
téléservices  en  France: Quels marchés  pour  les autoroutes  de  l'information?",  Officiai  Report  to 
the Minister of State, the Minister for the Interior and Regional Development and the Minister for 
Enterprise  and  Economic  Development,  JOUVE,  Paris,  1994;  INSTITUT  MULTIMEDIAS; 
"Multimédias made in USA",  Multimedia seminar, Paris, March-April 1995. 

4 

• 

• 

• 

• 

• 

• 

Electronic commerce:  often called, confusingly  and incorrectly,  "teleshopping" or 
described as an "electronic purchasing system", electronic commerce would enable 
the consumer to order products directly via his television set or computer terminal. 
Distance teaching: distance teaching would be provided interactively; it would rely 
on an audiovisual  aid and would enable the student  to  answer questions,  choose 
alternatives, and receive an assessment of his/her abilities. 
Electronic publications/information  services:  this  term  covers  a  wide  range  of 
services such as news, weather reports, on-line databases, etc.  For services such as 
travel  information  or  information  about  the  times  of  various  events,  one  of  the 
possibilities often offered by electronic commerce is direct booking. 
Professional teleservices: professional  services  such  as  telemedicine  and  legal 
advice afford an expert the opportunity of giving advice from his place of work to 
his client's home with total interactivity between the two. 
Home banking:  clients can obtain information  about their accounts  and carry out 
financial transactions directly and at a distance via a/the network. 
On-line entertainment:  this  includes  services  such  as  on-line  video  games  or 
video-on-demand which would enable the consumer to order a programme or a  film 
at any time, watch it on his screen and manipulate  its content  (ranging  from  fast 
winding or rewinding to making wholesale changes). 

The range of services planned today is, however, just the tip of the iceberg.  The common 
advantages  of  all these  services  mentioned above could apply to virtually  all  currently 
existing services: 

1.  Greater proximity to the consumer:  the ability to reach the consumer wherever he 

happens  to  be  and  to  afford  him  the  opportunity  of  receiving  information  or 
purchasing and/or receiving a product/service on the spot  saves him the time and 
trouble that are associated with a traditional service. 

2.  Direct  reaction  of  the  consumer:  inasmuch  as  the  link  and  the  exchange  of 
information  between  the  service  receiver  and the  service  provider  can  be  much 
more intense, the service provider can gain a much better idea of his client's profile 
and hence personalise his offer. 

3. 

The  instantaneous universal scope  and  internationalisation  of  the  geographic 
market: since  physical  distance  no  longer  matters  in  the  case  of  an  on-line 
connection,  the  service  provider  can  just  as  easily  reach  a  client  on  another 
continent as in the next street. 

Any  attempt  to  name  or  categorise  the  services  would,  by  definition,  be  artificial, 
incomplete  and extremely  temporary  as  it would  necessarily  be  based  on the markets, 
products, services and economic realities of today which are likely to change tomorrow. 
The forecasts  of the various types of Information  Society  service which might be made 
available  in future  are constantly  being  updated.  Depending  on their purpose, various 
categories  are  drawn  up,  based,  for  example,  on  the  features  of  the  application 
(professional,  consumption-related,  educational  or  healthcare,  etc.)  or  on  the  type  of 
medium  (PC,  TV,  etc.)  or  distribution  network  (satellite,  cable,  telephone,  wireless, 

terrestrial, copper/fibre, CD-ROM, interactive kiosks,5 the Internet,6 etc.).  None of them 
is, however, really satisfactory  and lasting in view of the fact that no limit to the potential 
of the Information  Society of tomorrow can be determined with sufficient  clarity today. 

At the regulatory level, the first conclusion to be drawn is that the scope of the regulatory 
sphere will necessarily be as wide as that of the economic sphere. 

2.  A gradual development of markets 

The Information  Society will not start with a "big bang".  Although the possibilities  are 
enormous, Information  Society services are emerging only  gradually.  New  applications 
are  constantly  being  developed  and  tested  (on-line  shopping,  telebanking,  distance 
education, video-on-demand, etc.) and pilot projects financed by private and public  funds 
are being launched throughout the world.  The reason for this gradual development is the 
length of time it takes service providers to respond to the many challenges, in particular: 

• 

• 

• 

• 

• 

Attracting the consumer: resistance to change has to be overcome, especially in the 
case of services intended for those categories of consumer who are the least aware 
of  the  new  technologies  (e.g.  the  older  generation  as  opposed  to  the  younger 
generation, the mass market as opposed to the business market). 

Finding means of payment: the services will not be able to  expand  until  payment 
mechanisms  have  been  developed  which  facilitate  easy  and  direct  electronic 
payment.  Thus, it is those services for which the method  of payment  is the most 
simple (e.g. services provided on closed networks) that are developing the quickest. 

Finding and  developing commercially  exploitable applications of technologies: 
services  based  on  the  most  advanced  technologies  will  take  off  only  when  the 
application  of those technologies becomes commercially  viable and/or  sufficiently 
widely  available  for  the consumer to be ready to pay the asking price for  the new 
service. 

Redesigning distribution:  if the product  needs to be physically  transported  or  if a 
complementary  service  has'  to  be  performed  manually,  a  completely  new 
distribution  concept must be developed  whose advantages  are on a par with those 
of speed and proximity offered  by the Information  Society services. 

Overcoming regulatory obstacles: the unsuitability of the national legal  framework 
(see below) will in many cases make it expensive to develop services owing to the 
legal  uncertainty  or  the  need  to  find  favourable  regulatory  niches,  and  in  some 
cases will even make such development impossible. 

Computers to which the public have access, normally specific to one company, affording  access to 
information  via  a  choice  of  menus,  under  the  control  of  the  user.  Possibility  of  live  video 
conference with an "expert" from the kiosk. 

An ownerless open system based on the ARPANET network originally ordered by the US Defense 
Department  in  1969. Its core structure  is currently  managed  by  Advanced  Network  &  Services 
(ANS), this system in its present form  serves some 4 million users and provides E-mail  access to 
at  least  30-40  million  individuals  over  more  than  160 countries.  In  some  parts  of  Europe,  the 
number of users of the network has increased by more than  1  000% in the last three years. 
6 

• 

Defining  schemes  for  rendering  operators  liable  :  it  will  be  important  to 
differentiate  between the obligations of providers of on-line  services  networks or 
cable networks and those of providers of services and editors of the content, and to 
set out the ethical and moral rules which the  latter must observe. 

The opportunities and challenges are evolving and are perceived differently  by operators 
in the various areas of economic activity, and it is impossible to determine exactly at this 
stage which application/technology combinations will give rise to profitable markets and 
precisely  how profitable  those  markets will  be.  The first applications  are and  will  be 
those  for  which  the  necessary  adaptations  are  the  most  simple  and  least  costly  (e.g. 
electronic  publishing,  personalised  interactive news, on-line marketing,  etc.)  and/or for 
which  the  benefits  to  the  consumer  should  be  the  greatest  (e.g.  electronic  shopping, 
on-line  financial  services,  distance  teaching,  medical  services  provided  at  a  distance, 
video-on-demand,  etc.).  With  the  passage  "of time,  however,  a  growing  number  of 
"traditional" services will  be modernised and redesigned and entirely  new services  will 
be developed. 

At the regulatory level, the gradual nature of the  development of the market means that 
the new regulations  will  not  come  into  being  all  at once,  there  being  instead  a strong 
likelihood that they, too, will be spread out over a period of time. 

3. 

Géographie  differences in the development of the new markets 

At the  European Union  level,  it  can be  expected  that there  will  be  different  levels  of 
development of Information  Society services from one Member State to another.. There 
are various reasons for this : 

• 

• 

differences  between  Member States  in  the  level  of  diffusion  of  information 
technologies  , broadly reflected  in the graph below by the IT quotient  (by which 
the  country  which  has  the  lowest  quotient  would  theoretically  have  the  highest 
penetration levelYor computers and telecommunications,  and the highest  levels  of 
economic activity); 

differences between Member States  in  the growth  of  the  information technology 
markets.  Given  that  national  markets  are  not  developing  at  the  same  rate,  the 
differences  between  Member States  will  diminish  in  some  cases  and  increase  in 
others;8 

IT quotient = (OE + PM + CP + PC + TP + FM + PG)/(GDP*Host*NSF).  OE representing  total 
expenditure  on  office  equipment  in  1990 (in  US$); PM representing  the  number  of  mailings  in 
1990;  CP representing the number of new cellular telephone subscribers in  1994; PC representing 
the number  of computers  in service  in  1993; TP representing the number of telephones  in  1990; 
FM representing the number of fax  machines  in service in  1992; PG representing the number of 
pagers in service in  1992; GDP representing gross national product per head in  1995 (estimates in 
US$);  Host representing the number of computers connected to the Internet in October  1994; NSF 
representing the sum of the net income and expenditure of the NSF in 1994, in US$ millions. 

See the table on the rate of growth in information  technologies by region between  1990 and  1994 in 

OETI, already cited, p. 357. 

7 

differences between  Member States  in  the  types  of  service  that  will  develop, 
reflecting  differences  in the current characteristics of the market due to  historical, 
socio-political,  demographic,  geographical  and  technological  factors. 
This 
difference  in the characteristics of the underlying markets is already apparent  (e.g. 
the degree of interest  shown in the market for  Minitel services in France  and that 
shown  in  advanced  satellite  television  services  in  the  United Kingdom)  and  is 
mirrored  in the available  information  infrastructure  (e.g. the different  use made of 
cable distribution  and of the telecommunications  network, as illustrated  below by 
the penetration of connections via the Internet). 

IT quotient9 

Internet connections pçr 1  QW inhabitants 10 

At the regulatory level, this differing  development of services across geographic  markets 
will in all probability be translated into different  national regulatory approaches. 

4.  An inevitable growth in the level cross-border services 

Information  Society  services  differ  from  "traditional"  services  in  that  they  can  be 
provided regardless of the distance between the consumer and the provider.  Exploitation 
of this inherently cross-border nature will be essential to the development of  Information 
Society services owing to a combination of the following factors: 
• 

attaining  critical  mass  and  reducing  marketing costs: whereas  in  the  case  of 
"traditional"  services the advantages connected with the cross-border  provision  of 
services and trade in goods in a wider geographic market often  remain unexploited 
owing  to  the  cost  involved  (time, transport,  distribution,  collection  of  data,  etc.), 

Eric  Arnum,  "Internet  Cross-Subsidisation:  Traffic,  Spending  and  Government  Spending  on  the 
Internet.  A close-up  study of the commercialization of the Internet and the growth of the NSFnet 
Backbone  Service  from  January  1993  to  January  1995",  Report  to  the  Commission  of  the 
European Communities, 1995. 

Source: Société Internet.  Observatoire Européen de l'Audiovisuel. 

10 

8 

• 

• 

Information Society services, by abolishing the distance factor, considerably reduce 
this cost (to  an extent which depends on whether or not the products need to be 
delivered or interpretation costs, etc.); 
meeting specialised  requirements and  targeting niche markets: the  interaction 
between the service provider and the individual consumer enables the provider to 
gain a competitive edge by meeting, as closely as possible, the needs of individual 
consumers.  As  a  result,  the  consumer  increasingly  expects  to  be  able  to find 
products/services which precisely meet his requirements.  For the service provider, 
this  means  that  specialisation  and  personalisation  are  increasingly  important. 
Generally  speaking,  small  service  providers  will  have  to  exploit  the  global 
geographic market in order to create economically  viable  niches.  Larger service 
providers active in markets for more standardised products/services might offer  a 
higher level of personalisation if the  service is itself adaptable (e.g. information or 
education  services);  in  the, case  of  services  which  have  relatively  fixed 
characteristics  (e.g. video-on-demand,  on-line shopping, etc.), it will  be necessary 
to offer a wider range of choice if service providers are to justify their subscription, 
that is to say to offer  "bouquets" of services.  In all these cases, the possibility  of 
covering a wider geographic market becomes a crucial requirement. 
accessing niche markets across frontiers: the  Information  Society  has  started  to 
develop in each Member State, but more among some segments of the population 
than among others (e.g. the younger generation as opposed to the older generation, 
business  users  as, opposed  to  private  users,  etc.).  It  follows from this  that the 
nationality of the  market matters less than the segment of the  market, and that, in 
order to be able to achieve a big enough market to make the provision of services 
commercially  viable,  these  segments  will  have  to  be reached  and  accessed  as a 
niche market across national  frontiers. 

The consumer will be quick to demand these cross-border services owing to their positive 
impact: 
•  Much  easier  and  wider  access  to  all  services/products  existing  in  the 

• 

• 

European  Union:  thanks  to  a  substantial  reduction  in  the  cost  of  searching  for 
products and services within the Union, markets which used to be inaccessible due 
to their remoteness are rendered as accessible as domestic markets. 
A reduction in the cost of the service provided: in view of the increased competition 
between service providers and the resulting greater ease with which prices can be 
compared, downward pressure will be exerted on price levels. 
New,  more  specialised/personalised services: thanks  to  the  geographic  market 
being wider, consumers will be able to link up to more specialised and personalised 
services (e.g. information services or education services tailored to the consumer's 
individual  requirements)  and  there  will  be  a  greater  number  of  new 
products/services from which to choose. 

At the regulatory level, the need for the cross-border development of services underscores 
the fact that it is essential that the frontier-free area be fully guaranteed. 

B.  The current legal framework of the Internal Market 

The European market for services  is not developing  at present in a legal  vacuum.  The 
existing  body  of  law  governing  the  Internal  Market  already  constitutes  a  basic  legal 

framework.  Full  and  effective  application  of  the  principles  of  the  freedom  of 
establishment  (Articles 52  et seq.  of  the  Treaty)  and the  freedom  to  provide  services 
(Articles 59  et seq.  of  the  Treaty)  and  of  the  existing  secondary  legislation  already 
enables  Information  Society  services  to  benefit  from  the  opportunities  afforded  by  the 
area without internal  frontiers. 

Article 59  of  the  Treaty, which  lays  down  the  principle  of  the  freedom  to  provide 
services,11 plays a key part in facilitating  and encouraging the creation of a critical mass 
of  cross-border  services  transported  along  the  information  superhighways.  As  is 
explained  in  the  "Commission  interpretative  communication  concerning  the  free 
movement  of  services  across frontiers",12 this  principle  prevents  a  Member  State from 
restricting  the  freedom  to  provide  services  originating  in  another  Member State. 
According to Article 59 and the case-law of the Court of Justice, a service must comply 
with the law, and is subject to the control, of the Member State of origin, that is to say, 
that in which the service provider is established.  Owing to this country of origin  control 
system and the system of mutual recognition that flows from it, providers of  Information 
Society  services  will  therefore  in principle  not  be obliged  to  apply  different  regulatory 
provisions depending on the final destination of the services, as this would, in a Union of 
15 Member States, purely and simply be tantamount  to denying the existence of an area 
without  internal  frontiers.  There  will,  however,  be  a  need  for  harmonisation  where 
application  of  the  law  of  the  country  in  which  the  service  is  received  is justified  for 
reasons relating to the public interest.13  In this case, it will be necessary  to establish  a 
level of protection of the public interest that is equivalent among all Member States so as 
to remove such a legal barrier. 

An  approach  based  on  effective  application  of  Article 59  and  of  the  country  of  origin 
control  system  (mutual  recognition)  will  reduce  the  need  for  secondary  legislation.  In 
many cases, direct application of Article 59 will indeed suffice  to prevent Member States 
from  restricting the freedom  to provide Information  Society services.  It is only where a 
restriction  is justified  in the light  of the  case-law  of the  Court of Justice that  secondary 
legislation might be necessary.  In other words, the stricter the application of Article 59, 
the less need there will be for Community rules. 

Article  52  of  the  Treaty  is  also  relevant  as  far  as  Information  Society  services  are 
concerned because it guarantees the providers of such services the benefit  of the right of 
establishment.  This  means  that  a  provider  of  Information  Society  services  who  is 

H 

The  concept  of  service  is defined  in Article 60 of the  Treaty:  "Services  shall  be considered  to  be 
'services'... where they are normally provided for remuneration, in so far as they are not governed 
by the provisions relating to freedom  of movement for goods, capital and persons.".  In addition, 
Article 59 states that the principle of freedom  of movement applies to cross-border  services:  "... 
restrictions  on  freedom  to  provide  services  within  the  Community  shall  be  progressively 
abolished  ...  in  respect  of  nationals  of  Member States  who  are  established  in  a  State  of  the 
Community other than that of the person for whom the services are intended.". 

OJC 334,9.12.1993, p. 3. 
Restrictions  on  freedom 

to  provide  services  may  be  justified  under  certain  conditions: 
discriminatory restrictions may be justified  only on the grounds set out in Article 56 of the Treaty 
and subject to respect for the principle  of proportionality; non-discriminatory  restrictions may be 
justified  by overriding reasons relating to the general  interest.  Any restrictive measure must, all 
the same, be proportional  to the objective  pursued  (the measure must be appropriate  and not  go 
beyond what is necessary for attaining that objective). 

10 

established  in  one  Member State  and  who  wishes  to  establish  himself  in  other 
Member States  should  not  be  subject  to  discriminatory  restrictions,  disguised 
discriminatory restrictions, or, in certain cases, non-discriminatory restrictions. 

The secondary legislation  governing the Internal Market already comprises  a number 
of  Directives  which  will  play  a  major  part  in  the  development  of  Information  Society 
services.  These  Directives  are  intended,  as  are  all  "Internal  Market"  Directives,  to. 
safeguard the general interest, to the extent necessary to remove obstacles to the Internal 
Market, by establishing an equivalent level of protection in all Member States. 

Reference  may be made in particular to the recent Directive 95/46/EC on the protection 
of individuals with regard to the processing of personal data and on the free movement of 
such data,14 which shows the "value added" of Internal Market legislation in terms of the 
protection  of  fundamental  rights  in  the  Information  Society,  in  this  case  the  right  to 
privacy.  Although this Directive has a scope which extends well beyond the  Information 
Society, it nonetheless represents a key stage in the establishment of its legal  framework 
inasmuch as the protection of personal data is an issue deemed crucial to the development 
of Information  Society services.  It also represents a substantial step forward  in the drive 
to  promote  confidence  in  the  new  services  among  ordinary  citizens.  As  information 
technology  develops,  the  Commission  will  consider  and,  if  appropriate,  propose  such 
additional measures as may be necessary.  Mention should also be made of the proposal 
for  a Directive  on the protection  of  personal  data  and  privacy  in the  context  of  digital 
telecommunications  networks,  in  particular  the  integrated  services  digital  network  and 
digital  mobile  networks,15  which  governs  the  specific  problems  connected  with  digital 
telecommunications networks. 

the 

With regard to intellectual property, several Directives will play a key role, in particular 
legal  protection  of  computer  programmes,16 
Directive 91/250/EEC  on 
Directive 92/IOO/EEC on rental right and on lending right and on certain rights related 
to  copyright  in  the field  of  intellectual property,  7  Directive 93/83/EEC  on  the  co 
ordination  of  certain  rules  concerning  copyright  and  rights  related  to  copyright 
applicable to satellite broadcasting and cable retransmission,  and Directive 93/98/EEC 
harmonising the term of copyright and certain related rights.19  Directive 96/6/EC on the 
legal protection of databases20 is also of  fundamental  importance  and  might  serve  as a 

14 
15 

16 

17 
18 

19 

20 

Adopted on 24 October  1995. 
Amended proposal  COM(94)  128 final of  13 June  1994.  See also Article 22(4)(d) of the proposal 
for a Directive on the application of open network provision (ONP) to voice telephony, common 
position of 12 July  1995 (OJ C 281, 25.10.1995, p. 19). 

OJ  L  122,  1.5.1991,  p.  42. 

It  is  of  particular  importance  because  computer  programs  are 
fundamental  to  the  information  superhighways.  The  Directive  grants  copyright  protection  to 
computer programs qua literary works. 

OJL 346, 27.11.1992, p. 61. 
OJ L 248, 6.10.1993, p. 15.  It  lays down  common  rules  on copyright,  notably  with regard  to the 
collective administration of rights, of which certain elements may prove relevant to the legislative 
proposals concerning the information  society. 

OJ L 290, 24.11.1993, p. 9.  It is a cornerstone of the legal framework  needed to protect the works 

and performances  which will be broadcast on the information  superhighways. 

OJ  No  L  77,  27.3.1996,  p.20.  Adopted  on  11 March  1996,  this  Directive  seeks  to  harmonise 
copyright as it applies to the structure of databases  in whatever form, whether on-line or  off-line, 
and to introduce a new economic right protecting the substantial investment by the  manufacturer 
of a database. 

11 

basis for any future additional initiative concerning those aspects of copyright and related 
rights which relate to the Information  Society. 

The  Green Paper on  "copyright  and related rights in the Information  Society''11  is an 
initial response to analyses which have identified the intellectual property field as one of 
the key regulatory fields as far as the emergence of the Information  Society is concerned. 
The specific character of digital technology, which makes it possible to transmit and copy 
a  large amount  of data much more easily  than  in the traditional  analogue  environment, 
brings with it specific  risks.  Without  adequate protection, it is difficult  to ensure that a 
work or service is not copied, modified  or exploited unbeknown to, and to the detriment 
of,  the  rightholder.  The  Green Paper  seeks  to  launch  a  wide-ranging  consultation 
exercise with a view to determining future policy in this area. 

The  Green Paper on  "legal protection for  encrypted services in the Internal Market'*11 
surveys the problems  stemming  from  the regulatory  disparities  between  Member States 
in  relation  to  the  protection  of  such  services  against  piracy  and  the  risks  to  the 
functioning  of  the  Internal  Market  which  might  arise  therefrom  in  the  context  of  the 
Information  Society.  The  Green  Paper  mentions  the  possibility  of  Community  action 
aimed precisely at harmonising national laws in this field. 

The Green Paper on  "commercial  communications  in the Internal Market'*2*  discusses 
the  various  forms  of  advertising,  direct  marketing,  sponsorship,  sales  promotion  and 
public relations that are intended to promote products and services and their prospects for 
future  development  in the context of the advent of the Information  Society.  The Green 
Paper  examines  the  extent  to  which  national  rules,  though  not  discriminatory,  are 
nevertheless capable of hampering cross-border activity, notably on networks, in this type 
of  service,  and  proposes  a  method  for  assessing  the  proportionality  of  such  rules  and 
improving co-ordination between possible initiatives at Community level. 

The proposal for  a Directive  on contracts negotiated at a distance  will  assume, as far 
as the protection of consumers is concerned, obvious importance in relation to some new 
services, notably electronic commerce. 

Lastly,  Directive 89/552/EEC  on  "television  without frontiers''15 guarantees  the free 
movement  of  television  broadcasts,  and  these  will  also  benefit  from  the  cross-border 
broadcasting facilities made available by the new Information  Society technologies. This 
Directive  covers so-called  conventional  television  broadcasting  services as well  as  "pay 
per  view"  or  "near  video  on  demand".  The  present  initiative  does  not  prejudge  the 
discussions  within  the  European  Parliament  and  the  Council  on  the  review  of  the 
Directive, including its scope.  In so far as some new services would be included within 
the  Directive's  scope,  these  services  and  the  draft  rules  relating  thereto  will  not  be 
covered  by  the  transparency  mechanism  in  view  of  the  fact  that  the  prior  notification 

21 
22 
23 
24 
25 

COM(95) 382 final of  19 July 1995. 
COM(96) 76 final of 6 March  1996. 
COM(96) 192 final of 8 May 1996. 
Proposed revision, OJ C 308, 15.11.1993, and OJ C185 of  19.7.1995, p4. 
OJ L 298,  17.10.1989, p. 23.  Proposal  for an amendment dated 31 May  1995, COM(95) 86 final;; 
Modified  proposal.  COM(96)200  of  7.5.96;  Common  position  of  8.7.1996  and  Communication 
form the COMMISSION AND THE Parlaiment S.EC(96)1292 on the Common position. 
12 

procedure  does  not  apply  inter  alia  to  national  rules  implementing  a  Community 
Directive. 

13 

II.  THE WEED FOR A TRANSPARENCY MECHANISM 
The need for a transparency mechanism stems from the regulatory activity that will  gain 
momentum  at  national  level  in  the  years  ahead  with  a  view  to  regulating  Information 
Society  services;  if  it  is  not  co-ordinated,  this  regulatory  activity  might  lead  to  the 
Internal Market being called into question, notably through a refragmentation  of the area 
without internal  frontiers. 

In  addition,  a  problem  of  discordance  arises  between,  on  the  one  hand,  the  limited 
territorial  scope  of  national  rules  and,  on  the  other,  the  transnational  dimension  of  the 
new  interactive  services  which,  as  a  result,  need  to  be  discussed  extensively  and  call 
above all for co-operation at Community level. 

A.  The outlook for regulatory activity in the Member States 
Developments  in Information  Society  services will  be reflected  at the legal  level  by  new 
regulatory  needs.  The  setting-up  of  think  tanks  in  the  Member States  and  the  many 
official  reports and studies that have been commissioned  at national  or Community  level 
lead to  the  same  conclusion: the Information  Society  necessitates  regulatory  action  on a 
broad front aimed at adapting the current legal  frameworks. 

Preregulatory  mobilisation  in the Member  States 

1. 
In  a  number  of  Member States,  work  has  begun  on  analysing  and  assessing  future 
regulatory  needs  in the Information Society.26  This is  symptomatic  of the beginnings  of 
regulatory  activity.  In the  light  of  the  information  in the  Commission's  possession,  the 
work in hand may be summed up as follows: 

26 

The following studies can be cited by way of example: Thierry Breton: "Les télé-services en France. 
Quels marchés pour les autoroutes de l'information?"  Officiai  report to the Minister of State, the 
Minister for the Interior and Regional Development and the Minister for Enterprise and Economic 
Development (France, December  1994); Jean-Marc Detailleur: "Evolution de la presse écrite dans 
la  perspective  des  nouvelles  technologies  multimédias". 
Report  to  the  Minister  for 
Communication  (France,  December  1994);  Gérard  Théry:  "Les autoroutes  de  l'information"; 
Report to the Prime Minister (France, July  1994); "Industries culturelles et nouvelles techniques"; 
Report by the Committee chaired by Mr Sirinelli, Minister for Culture and the French Language; 
Prognos  AG:  "Digitales  Fernsehen-Marktchancen  und  ordnungspolitischer  Regelungsbedarf, 
commissioned  by  the  Bayerische  Landeszentrale  fur  neue  Medien  (Munich,  January 1995); 
Coudert Brothers: An overview and analysis of the  legal and regulatory barriers to the take-off  of 
multimedia  applications  in  preparation  for  the  infrastructure  Green  Paper  (Report  to  the 
European Commission,  December  Î 994):  The  Danish  Government  report  on  the  Information 
Society year 2000; Actieprogramma Electronische Snelwegen  "van metafoor naar actie"  (Official 
document of the Dutch  Government, December  1994); "Wings to Human ability" (Official  report 
to  the Swedish  Government  (August  1994));  Titan:  Study  of the regulatory  framework  of the 
French-speaking  community  for the launching  of multimedia  experiments  and workshops "Le 
contrôle  des accès  et des droits"  (Belgium,  November  1994  and January  1995);  "Creating the 
superhighways  of the  future:  Developing  Broadband  Communications  in the UK"  (presented to 
Parliament by the President of the Board of Trade by command of Her Majesty: November  1994): 
The  Waterloo  Report on "Transatlantic  Dialogue on Broadcasting and the Information  Society", 
19-  21 May 1995;  Informationsgesellschaft  Chancen,  Innovationen  und  Herausforderungen, 
Festellungen und Empfehlungen.  Der Rat fur Forschung, Technologie und Innovation, Dezember 
1195; a number of recent resolutions of the International  Communications  Round  Table (ICRT) 
have also stressed certain regulatory needs. 

14 

* 

Belgium 

Fifty or so individuals from various spheres of the communications industry are working 
on  "Titan",  a  project  to  introduce  the  new  technologies  in  the  French-speaking 
community.  À  "legal"  subgroup  is  examining  certain  questions,  such  as  intellectual 
property  law,  data  security,  the  rules  of  evidence,  consumer  protection  and  the 
safeguarding  of  privacy.  A  preliminary  report for the  Titan group on  the  regulatory 
framework,  drawn  up  in  November 1994,  states  that  a  complete  remodelling  of  the 
existing regulatory system is extremely desirable, and expresses the hope that a thorough 
review might ensure consistency  among the rules and regulations governing these new 
services.  With a view to drawing up rules on interactive services, the "Conseil Supérieur 
de  l'audiovisuel"  has  been  asked  to  analyse  the  issue  and produce proposals.  In the 
Flemish-speaking community, talks are being held on draft amendments to a Decree of 
4 May 1994 governing broadcasting/television in the context of the "Telenet Vlaanderen" 
project.  This  is  a  project  which  is  being  carried  out  jointly  by  the  Government, 
quasi-public  bodies  and  private  enterprise  and  which  is  aimed  at  the  new  cable 
distribution services. 

• 

Germany 

The  German  Christian-Democrat  Party,  and 

Several  think  tanks  have  been  set  up,  either  at  Land  or  at  federal  level,27  and  are 
examining  among  other  things  the  specific  question  of  the  regulatory framework for 
Information Society services and questions relating to data protection, crime prevention, 
the protection of minors, intellectual  property, the protection of consumers, encryption, 
the 
and  media  ownership. 
Social-Democrat/Bûndnis 90/Die Grtinen parties, have established think tanks28 to study 
the legislative issues and the need for adaptation of the rules.  The Bundestag has decided 
to set up a commission of enquiry to look into regulatory matters among others.29  One of 
the  questions  still  outstanding  is  whether the  new  services  come  within  the  terms  of 
reference  of the Lander  or of the Federal  Government.  Recently  the Lander agreed a 
draft  Treaty  on  on-line  services  (On-line  Staatsvertrag)  which  is  based  on  the 
broadcasting  Treaty  (Rundfunkstaatsvertrag)  between  the Lander.  The  draft  contains 
provisions on the taking-up of the activity, identification of the service-provider, editorial 
responsibility, the protection of minors, advertising, sponsorship, the right to reply, data 
protection,  supervision,  etc.  For  its  part,  the  Federal  Government  has  published 
guidelines  on  a  new  multimedia  law31  which  addresses  issues  relating  to freedom of 
access  without  a  license,  consumer  protection,  the  publishing  of  supply  and  pricing 
conditions,  liability,  the  protection  of  minors, contract  law  including  digital  signature, 
intellectual property rights, etc. 

27 

28 

29 

30 
31 

For  example,  the  "Forschungs-  und  Technologierat"  of  the  Federal  Government,  a  group  of 
representatives of the  16 Lander and of the Federal Government; the "Petersberger Kreis", formed 
by the Government and economic operators.  Preliminary reports are expected for the autumn. 

Cf., 

for  example, 

the  12 media-policy  demands  of  Bûndnis 90/Die Grtlnen  of  9  and 
10 September  1995, calling for rules on the new services in the areas of data protection, privacy, 
minors, intellectual property and consumers. 

In this context,  attention has been drawn to the fact that the existing body  of rules and  regulations 

should be slimmed down so as to be more in keeping with the new requirements. 

Staatsvertrag Uber Mediendienste. 
Statement  vom  Bundesminister  Dr  JUrgen  RUttgers  zu  den  rechtlichen  Rahmenbedingungen  ftlr 

neue Informations- und Kommunikationsdienste - Multimedia Gesetz - 2/5/1996. 

15 

Denmark 

In  October 1994  the  Ministry of Finance,  which  is  responsible  for  "The Information 
Society 2000",  presented  a  governmental  report  which  concluded  inter  alia  that  the 
Danish law on the protection  of personal  data should be revised  and  simplified  to  cope 
with  the  changes  brought  about  by  the  Information  Society.  The  report  asks  that  the 
discussion  on the  various  aspects  of the  Information  Society  be  treated  as  a  matter  of 
priority by Parliament and by local authorities, and that an action plan containing  future 
initiatives be drawn up. 

• 

France 

The "Minitel" and the development of "telematics" have made it possible to gain valuable 
experience  in the  area  of  services provided  at  a distance.  With  a view  to  launching  a 
debate  on  the  need  for  a new  policy,  in  1994 the  French Government  commissioned  a 
series of  strategic  reports  on the  various issues raised by the advent  of the  Information 
Society.  The Breton Report, entitled  "Teleservices  in France", which  was  presented  to 
the  Prime Minister  oft-  11 July  1994,  examines  more  particularly  the  question  of  the 
development  of  new  Information  Society  services  and  concludes  that  the  rules  and 
regulations  need to  be adapted  owing to the mismatch  between the current  instruments 
and  the  new  methods  of  organisation  made  possible  by  new  technologies.  The 
De tailleur Report,  which  was  presented  to  the  Prime Minister  on  24 January  1995, 
examines the implications  of the  new technological  environment for the press.  It points 
out that  some  new  situations  involving  the  new  services  will  uncover  gaps  in the  law. 
Any adaptations  should be gradual  and be the result both of analysis of the  experiments 
that  are  being  carried  out  and  of  an  ongoing  study  of  the  legal  implications.  The 
Sirinelli Report, entitled "Cultural industries and new technologies", examines the impact 
of  new  technologies  on  intellectual  property  law.  The  Théry Report, entitled  "The 
the  Prime Minister  on 
Information  Superhighways",  which  was  presented 
31 July  1994,  examines  the  strategic  implications  for  France  of  the 
information 
superhighways.  All these reports stress that regulatory activity will be necessary in those 
areas that are already identified, without, however, specifying clearly either the content or 
time-scale.  On 26 March  1996 a Law, which came into effect  immediately, was adopted 
by Parliament with a view to launching experimental new services. 

to 

The  Senate  Standing  Committee  approved,  in  February 1995, a  document  entitled  "in 
materia di  multimedialità",  which  describes  in  detail  the  Italian  situation  in  this  field. 
The report, which  analyses the French  "Breton" and  "Théry" reports, highlights  several 
regulatory  issues  (e.g.  data  protection,  media  concentration,  advertising)  and  asks 
whether adaptation of the existing laws is necessary. 

10 

• 

Luxembourg 

On 4 May 1995 the Prime Minister announced to the Chamber of Deputies the setting-up 
of  a body  to  be  known  as the  "Cabinet  de  l'information",  within  which  the  competent 
Ministries  are  to  co-ordinate,  channel  and  centralise  initiatives.  Alongside  this  body, 
there will be a "Comité d'accompagnement",  consisting of representatives of the business 
community  and  of  the  media  and  the  communications  industry,  whose  task  will  be  to 
make proposals and discuss ways of bringing about the Information  Society.  According 
to the Prime Minister, many issues still have to be clarified,  such as data protection, the 
social consequences, copyright, etc.  The Chamber of Deputies is to hold a wide-ranging 
debate.  In  any  event,  it  would  appear  that  either  a  new  regulatory  framework  will  be 
drawn  up, or the  existing  regulatory  framework  will  be adapted  to take  account  of  the 
specific character. 

Netherlands 

In December  1994 the Government adopted an action programme ("Actieprogramma,r) to 
accelerate  the  introduction  of  the  Information  Society.  Although  the  document 
concentrates  on the infrastructure  aspects, certain  issues relating to the legal  framework 
for the  services were identified:  for  example, the protection  of personal  data,  encrypted 
services,  intellectual  property  and  public  policy  (crime  and  ethics).  The  regulatory 
review  will  be  centred,  not  only  on  telecommunications  legislation,  but  also  on  the 
so-called  "accessory" regulations  governing  identified  areas.  Particular  importance  will 
be  attached  to  the  possibility  of  self-regulation  in  the  service  sector,  which  the 
Government  believes might  accelerate practical  applications.  The competent  Ministries 
have set up interdepartmental  working parties to implement the action programme.  The 
Dutch media authority ("het  Commissariaat  voor de Media") recently  authorised  the use 
by television companies of the opportunities afforded  by the new electronic media.  The 
authorisation covers, among other things, the interactive use of television, the publication 
of  electronic  programme  guides,  the  distribution  of  programmes  on  the  Internet,  the 
exchange  of  information  and  direct  marketing. 
It  might  also  cover  the  supply  of 
video-on-demand  and pay-per-view services.  Lastly, a steering committee, composed of 
representatives of several Ministries, has been set up to deal with any difficulties  caused 
by the existing rules and to co-ordinate the introduction of the new legal framework  for 
electronic services. 

Smdm 

The  Government  has appointed  a commission  to promote  information  technology.  An 
initial  report  entitled  "Wings to  Human Ability"  was  submitted  in  August  1994.  The 
current  legal  situation  is considered  unsatisfactory.  The report finds that  a  stable  legal 
framework  in  the  areas  of  copyright,  contract  law,  civil  law,  advertising,  and  the 
safeguarding  and  protection  of  personal  data  is  essential  to  the  development  of 
information  technologies.  To produce a body of profitable  services, particular  attention 
should be paid, among other things, to the law of contract and intellectual  property  law. 
The aim of adjusting the rules and regulations should be attained in the course of the next 
three years.  An  official  committee  has  been  set  up  to  examine  such  matters  as  the 
relationship between televised media, the new services and the law on the freedom  of the 
press.  Concrete proposals should be made during this year. 

17 

• 

Finland 

In  early  1995  the  Government  published  a  report  entitled  "Developing a  Finnish 
Information Society".  Existing  working  parties,  such  as  those  on  audiovisual  law, 
copyright law and multimedia law, might discuss problems connected with new services. 
It would appear likely that Finland, which already has very liberal rules on  media, will, 
in the field of new services, base itself also on self-regulatory  bodies, with the exception 
of criminal  acts  governed  by the  criminal  code.  The general  approach  seems  to  be  to 
regulate as little as possible. 

* 

United Kingdom 

The report entitled  "Creating the Superhighways of the Future:  Developing Broadband 
Communications in  the  UK",  prepared  by  the  DTI  and  presented  to  Parliament  in 
November  1994,  has  identified  an  overriding  need  to  create  a  stable,  effective  and 
evolutive legal framework  in order to increase the confidence operators must have if they 
are to invest, and has found that particular attention should be paid both to the protection 
of  personal  and  industrial  data  moving  on  the  networks  and  to  adequate  protection  of 
intellectual  property  rights.  The  document  announced  the  creation  of  a  Multimedia 
Industry  Advisory  Group  (MMIAG)  composed  of  leading  industrialists  which  is  to 
advise  the  competent  Minister  on  the  opportunities  for,  and  obstacles  to,  multimedia 
development.  Subgroups are charged with examining inter alia questions concerning the 
legal  framework  in  the  identified  areas  and  also  that  for  medical  applications.  The 
subgroup  on intellectual  property  issues  has expressed  the view that the procedures  for 
conferring rights should be simplified  for the new multimedia products, and recommends 
that  the  laws  on  defamation  and  obscenity  should  be  amended  and  that,  following 
proposals  in  the  United States,  a  transmission  right  should  be  introduced  to  protect 
the 
copyright. 
Prime Minister's office  to discuss the need for  adaptation  of the law in force,  notably  in 
the areas of intellectual  property  and data protection  law.  In July  1995 a bill  amending 
the  law and  procedure  relating  to  defamation  was  introduced  (bill  entitled  "An  Act  to 
amend the law of defamation  and to amend the law of limitation with respect to  actions 
for  defamation  and malicious falsehood").  The bill includes electronic publishing  in its 
scope  (section 1).  At  political  party  level, the  Labour Party  presented  a report  in  July 
1995 entitled "Labour's Policy Forum on  the Information Superhighway", which refers in 
particular to the areas of consumer protection, copyright, the protection of minors, public 
policy, piracy, data protection, marketing, and the rules of labour law and the law relating 
to social security as they apply to teleworking, etc., and calls for regulatory action at the 
domestic level. 

interdepartmental  working  party  was  set  up  within 

Another 

2.  New regulatory needs 

In addition to specific  areas, such as telecommunications,  which are subject  to  specific 
regulations  at Community  level, an analysis  of these various activities reveals  that  new 
rules, or legislative adjustments to the existing ones, will be needed often inasmuch as the 
latter were not designed with Information  Society  services as such in mind.  They  were 
meant for certain specific risks which may be attendant on existing services in relation to 
certain  general  interest  objectives  (e.g.  the  protection  of  public health  in  the  case  of 

18 

medical services, the protection of  consumers or of pluralism in the case  of  television 
services, the protection of competition or consumers in the case of  telecommunication 
services, etc.).  Owing to their different characteristics, Information Society services will 
change, for better or for worse, the nature of the risk covered by the current rules.  Thus, 
compared with traditional professional services necessitating movement on the part of 
the provider  or  receiver,  services  provided  electronically  at  a distance  may  change  the 
type of risks to which consumers are exposed.  Similarly, compared with broadcasting, 
services meeting specific needs of the service receiver ("interactive" services) do not give 
rise to  the  same  problems  in  relation  to  the  safeguarding  of  the  public  interest.  For 
example,  unlike  in  the  case  of  interactive  services,  the  risks  inherent  in  television 
broadcasting are that, (a) once a programme has been broadcast, it is not possible to know 
precisely  who  is  in  fact  going  to  watch  it,  (b)the  consumer  is  more  passive  in  his 
response to, or a captive of,  the programme (as he cannot influence its content) and (c) it 
is  a  "mass"  medium.  Conversely,  interactive  services  give  rise  to  other  risks  owing 
precisely to the level of individualisation of the special relationship between the provider 
and the receiver of a service (privacy, consumer protection, etc.). 

To  counter  these  various  risks,  regulatory  changes  will  be  needed  to  ensure,  where 
appropriate,  better protection  or, on the  contrary, to  loosen the existing  constraints.  In 
some cases, one short-term solution for national authorities will be to use their power of 
interpretation to find solutions.  These solutions might, however, be variable and open to 
challenge and may thus themselves  trigger  intervention  by the legislator.  Moreover,  in 
many  cases, the  current  rules  do  not  leave  sufficient  room  for  manoeuvre  for  it  to  be 
possible to avoid the need for legislative intervention. 

a. 

The need for  new forms  of  protection 

The  current  rules  are  attuned  to  serving  the  needs  of  existing  service  activities  (e.g. 
professional  services, telecommunication  services, television broadcasting  services), but 
will not necessarily be so in the case of the new services and might therefore  need to be 
strengthened or supplemented. 

Improving the existing protection.  The rules in force pursuing a general interest objective 
may  need  to  be  adapted  in  order  to  ensure  more  effective  protection  of  that  interest 
against the new risks created by Information  Society services.  In this case, the aim will 
be not  to pursue  a new  general  interest  objective,  but to  ensure  better  protection  of  an 
objective that is already recognised. 

This  better  protection  might  be  brought  about  by  an adaptation of  the  applicable  laws 
aimed  at  increasing  the  level  of  the  existing  protection. 
In  view  of  the  fact  that 
Information  Society services will consist in providing, in a different  form, services which 
already  exist  and  are  already  regulated,  it  is  likely  that  numerous  adaptations  of  these 
rules  will  be  necessary.  Thus,  for  example,  bearing  in  mind  that  the  services  will  be 
provided at a distance, the current rules governing professional  services (health care, etc.) 
might not be  sufficient  in relation to  identification  and the qualifications  of the  service 
provider (difference  between a consultation in a hospital and a consultation at a distance). 

The improvement  in protection might also consist in extending the spectrum of the laws 
applicable to a particular activity.  Thus, services which were traditionally subject to a set 

19 

of  clearly  delimited  legal  rules  might  be  made  subject  to  sets  of  rules  applied  to  other 
legal  categories so as to ensure fuller protection.  For example, in the case of audiovisual 
services  such  as  video-on-demand,  compliance  with  specific  provisions  on  data 
protection  might,  where  appropriate, be  provided  for  (bearing  in mind  that  interactivity 
makes it possible to identify the user and hence gives rise to risks as far as the protection 
of  privacy  is concerned), whereas the rules on television  traditionally  do  not cover  such 
risks. 

Protecting  new  areas  of public  interest.  Besides  adapting  the  rules  with  a  view  to 
attaining  more  effectively  the objective  they  pursue,  it might  be  necessary  to  meet  new 
general  interest  objectives.  Thus,  for  example,  the  current  discussions  about  the 
virtuality  of  the  Information  Society  might  trigger  a  regulatory  response  aimed  at 
ensuring a degree of veracity. 

The need  to scale  down  existing forms  of  protection 

b. 
Conversely,  some  existing  rules might become  unnecessary  or disproportionate  and will 
have to be rendered inapplicable to the new services or made more flexible. 

In view  of  the  fact  that  the 
Stopping  the  applications  of  rules  which  are  misapplied. 
services  will  be at a cross-roads  between  different  legal  categories,  some  of  them  might 
be  subject  to  rules  which  were  clearly  not  intended  to  cover  this  type  of  activity. 
Legislative  intervention  will  therefore  be  necessary  in  order  to  remove  the  services 
concerned from the scope of the rules in question.  It would, for instance, be appropriate 
to assess whether, and if so, to what extent laws on television broadcasting  are applicable 
to Information Society services. 

Adapting  disproportionate  rules.  Other  services  might  be  subject  to  certain  constraints 
which  will  be  out  of  proportion  to  the  legitimate  objective  they  pursue.  This  might 
involve  either  a  type  of  obligation  which  is  out  of  keeping  with  Information  Society 
services,  or measures which  go  further than is  necessary  to attain their objective.  Thus, 
for example, while the protection of minors is, of course, a fundamental  aim, it might be 
inappropriate (and perhaps contrary to Article  10 of the ECHR) to provide, as in the case 
of television broadcasting  (where there can be no safeguards  as to  "who watches what"), 
for a total ban on services intended for adults.32  To take another example, the obligation 
to  draw up  a written  contract  before  concluding  a sale  is  not  appropriate  in the  case  of 
electronic  commerce.  Similarly,  the  prior  authorisation  or  licensing  arrangements 
applicable  to  telecommunication  or  broadcasting  services  might  not  be  suited  to 
Information  Society  services  (bearing  in  mind,  in  particular,  that  other  arrangements, 
such as those applicable to the press, might afford more effective protection). 

32 

Interactivity  and the technical  means  by which  a user will  have access  to aie new  services  might 
increase  the  opportunities  for  parents  to  control  access  by  minors  to  violent  or  pornographic 
programmes.  The  broadcasting  rules  on  the  protection  of  minors  are  therefore  not  necessarily 
appropriate,  the  risk  of  uncontrolled  access  by  minors  being  much  greater  in  the  broadcasting 
context. 

20 

3.  A wide-ranging and drawn-out regulatory adjustment 

The political mobilisation  in the  Member States  around  the  Information  Society theme 
and the development  of the market for services  will necessarily  have  an impact  on the 
scope of regulatory activity at national level. 

(a)  A broad spectrum of rules and regulations 

Owing  to  the  wide  variety  of  services  involved,  a  multitude  of  legal  fields  will  be 
affected,  in  particular  the  law  governing  the press  (should,  for  example,  the  specific 
arrangements  governing  the  press,  such  as  the  principle  of  editorial  responsibility,  be 
applicable?), the law governing telecommunications,  civil law,33 in particular the law of 
contract,34 the law governing audiovisual services35 (for  example, must there be a prior 
authorisation system, or should the traditional rules on pluralism apply?), labour law and 
the law  relating to  social security36 (for  example,  what  arrangements  should  apply  to 
teleworking?),  tax  law37  (for  example,  which  new  services  might  qualify  for  tax 
incentives?), criminal law3*  (for  example, what arrangements and procedures  should  be 
laid  down  for  offences?),  banking and financial  law  (for  example,  what  arrangements 
should  apply  to distance  banking,  insurance  or  stock  exchange  services?),39 the law on 
commercial communication  and,  lastly,  the  rules  governing  the  professions  (for 
example,  what  arrangements  should  apply  to  the  provision  at  a  distance  of  legal  or 
medical services?). 

These  provisions  will  pursue  a  variety  of  general  interest  objectives:  freedom  of 
expression, the  protection  of  privacy  (all  services),  the  protection  of  minors, the 
protection  of  the  consumer (for  example,  electronic  sales  service),  the  protection  of 
intellectual property, the protection  of  health (for  example, telemedicine  services),  the 
protection of culture or language (for example, teaching service), etc. 

Certain  specific  questions  have  already  been  identified,  in  numerous  governmental 
studies and reports, as being the first that will have to be dealt with, such as those of data 
protection, the protection of intellectual property and the protection of consumers and of 
minors, and the protection of, and arrangements applicable to, the encryption of services. 

33 

34 

35 

36 

37 

38 

39 

40 

See the Swedish report entitled "Wings to Human Ability". 
The  question  is  already  being  examined  by  notaries  in  some  Member States.  See  Revue  de 
l'Assemblée  de  Liaison  des  Notaires  de  France  n6 6,  1995,  and  Bundesnotarkammer, 
Elektronischer Rechtsverkehr, Cologne 1995. 

See the Prognos study; the Detailleur  Report;  "the Waterloo Report"; the Coudert Brothers  report; 
the  study  entitled  "Information  Society:  Access  and  Pluralism",  International  Federation  of 
Journalists, March 1995. 

See  in  this  connection  the  study  by  Thierry Breton  entitled  "Le  télé-travail  en  France:  Situation 

actuelle, perspectives de développement et aspects juridiques". 

Thierry Breton  "Le  télé-travail  en  France:  Situation  actuelle,  perspectives  de  développement  et 
aspects  juridiques";  Thierry Breton:  "Les  télé-services  en  France.  Quels  marchés  pour  les 
autoroutes  de  l'information?";  Jean-Marc Detailleur:  "Evolution  de  la  presse  écrite  dans  la 
perspective des nouvelles technologies multimédias". 

See  inter alia  the  Dutch Government's  report:  Actieprogramma  Electronische  Snelwegen  "van 

metafoor naar actie". 

See reports by  Thierry Breton  "Les télé-services  en  France" and  Gérard Théry  "Les autoroutes  de 

l'information". 

See Prognos study, Détailleur Report, and the Coudert Brothers report. 

21 

(b)  A  vague and very drawn-out timetable 
Analysis of the market for  services has shown that there will be no  "big bang" and that 
the  services  will  develop  gradually.  Accordingly, the regulatory  response  will  also  be 
staggered  so  as  to  keep  pace  with  the  development  of  the  market  and  deal  with  the 
various  questions  as  and  when  they  arise.  The  national  regulatory  framework  for 
Information  Society services will therefore be evolutive in nature. 

No precise timetable has been set.  As a rule, the studies and reports confirm that thinking 
in  the  vast  majority  of  Member States - apart  from  Germany - is  not  yet  focused  on 
specifics, and stress that it is difficult  to fix a timetable for adapting laws.  Some reports 
provide pointers only to the making of the first specific  regulatory  adjustments.41  Thus, 
the Netherlands wishes to review its legislation on data-related offences  before the end of 
1996, and Sweden wishes to adjust  its legislation within the next three years.  Moreover, 
economic  analyses  reveal  that  new  services  which  cannot  yet  be  imagined  might,  in 
future,  arrive  on  the  market  as  technological  progress  is  mastered  and  the  market 
develops.  It is all the more difficult  to imagine today what the regulatory needs will be 
for such services. 

There is much uncertainty about the content of the  rules and regulations which might be 
necessary  in the  future.  National  and  international  experts  have  identified  the  relevant 
areas, but often  do not make proposals for the necessary course of action that should be 
followed and the specific provisions that should be laid down.  In view of the societal and 
political  issues  at  stake  as  revealed  by  the  intensity  of  the  political  mobilisation,  and 
leaving  aside  cases  where  rules  and  regulations  are  adopted  as  a  matter  of  urgency  in 
response to  a given  situation, regulatory  solutions will  be particularly  complex to work 
out  and  in  some  cases may  spark  a lengthy  debate which  might  Continue  into  the  next 
millennium. 

Recourse  to  pilot  projects  is one method  of regulatory  intervention  which  is  especially 
popular in France and Germany.42  It consists in intervening initially solely with a view to 
establishing  interim  or  ad hoc  exceptional  arrangements,  intended  to  permit  the 
development of pilot projects involving Information  Society services.  The follow-up to, 
and analysis of the  experience gained from, these pilot projects will enable the legislator 
to  have  a  better  overall  view  and,  subsequently,  to  regulate. fully  these  new  services. 
Thus,  the  actual  regulations  would  come  into  being  only  after  a  fairly  long  period, 
depending on the time it takes to draw reliable conclusions from  the pilot projects.  This 
pragmatic  "exception/pilot  project/monitoring/new  rules"  method  could  become  one of 
several  short-term regulatory  approaches making it possible not to legislate  prematurely 
while  remaining  in a posture  of regulatory  readiness  whereby  any  action  may  be taken 
advisedly. 

41 

42 

43 

See  inter alia the  Swedish  report  "Wings  to  Human  Ability",  the Dutch  report  "Actieprogramma 
Electronische Snelwegen" and "The Danish Government Report on the Information  Society Year 
2000". 

A bill is being drafted  with a view to introducing exceptional arrangements lasting five years aimed 

at enabling  170 pilot projects to be carried out. 

A period of five years is envisaged in France. 

22 

Lastly, the scenario of a permanent or continuous regulatory adjustment is also  possible 
given the potential versatility of technological developments and societal values. 

B.  The risks to the functioning of the Internal Market 
The  regulatory  activity  for  which  the  ground  is  being  prepared  in  the  Member States 
might, if it is not monitored, jeopardise attainment of the Internal Market objective. 

1.  Risk of refragmentation of the Internal Market 

If nothing is done to co-ordinate the formulation of the new national rules and regulations 
applicable  to  Information  Society  services, there  is a strong  likelihood  that  those  rules 
and  regulations  will  be  different,  if  not  divergent,  from  one  another.  Such  a  state  of 
affairs  would  lead  to  new  restrictions  on  the  free  movement  of  Information  Society 
services  between  Member States  since  one  Member State  could  limit  or  prohibit  the 
provision  of  a  service  originating  in  another  Member State  by  making  it  subject  to  its 
own national rules and regulations.  In the light of the law governing the Internal Market, 
and in particular Article 59, some of these measures might not be justified  whereas others 
would  be.  In the  former  case, the  Commission  would  have to  intervene  to  induce  the 
Member State to abolish the legal barrier thus raised, while in the latter it would have to 
propose,  if  necessary,  harmonisation  of  the  laws  in  question  in  order  to  safeguard 
freedom of  movement.  Until  the  effects  of this  action  made themselves  felt,  in  either 
case the European Information  Society services industry would be unable to benefit from 
a  genuine  area  without  internal frontiers and  might  be dissuaded  from  undertaking  the 
investment  which  is  essential  to  its competitiveness.  A  number  of  reasons  militate  in 
favour of this negative scenario. 

Reasons relating to  the development  of  the  market.  Analysis  of  the  market  for  new 
services  shows that  its development  will  be gradual  and  of a variable-geometry  nature, 
that is to say different  from one Member State to another.  This means that the regulatory 
reactions will be forthcoming  at different  times depending on the Member States and will 
be directed  towards different  sendees.  Thus, for  example, a particular  Member State in 
which  the  professional  services  of  telemedicine  are  destined  to  develop  rapidly  might 
therefore  regulate  such  services, whereas  at the  same time  another  Member State could 
regulate  electronic  commerce  and  distance  betting  services  owing  to  the  scale  of  an 
operator's activities on the domestic market. 

Reasons  relating to national traditions  and culture.  National  laws  are expressive  of a 
whole  set  of  economic,  cultural,  social  and  political  values  and  traditions  which  vary 
from  one  Member State to another.  Experience  shows that the  regulatory  approach,  in 
any field, is based on these different  concerns and may even lead to regulatory  reflexes. 
This means, first, that those issues which are prime  candidates  for  regulation  will  vary 
from  one  Member State to  another  (for  example,  some  Member States  might  place  the 
emphasis on safeguarding national culture, others on consumer protection, and others still 
on the protection of minors and the upholding of moral standards) and, secondly, that on 
one and the same specific issue the content of the rules and regulations will also vary (for 
example,  national  approaches  to  the  protection  of minors,  data  and  consumers  already 

44 

See,  for example, Prognos study, pp. 143 et  seq. 
23 

differ  considerably,  reflecting  the  diversity  of  sensitivities,  perceptions  and  objectives 
peculiar to each country). 

Reasons relating to  the original legal arrangements. The national  legal arrangements 
that  will  have  to  be  adapted  already  differ  from  one  Member State  to  another. 
Consequently,  the  adaptations  will  pursue their  own  intervention  logic,  and  this  might 
amplify  the  current  disparities.  Thus,  for  example,  the  German-law  concept  of 
"broadcasting"  (which permits the sharing of competencies  between the Lander and the 
Federal Government), or the French system oî a posteriori control developed for Minitel 
services,  or  the  modulated  and  simplified  British  system  already  applicable  to  satellite 
television  broadcasting  organisations  provide  many  different  points  of  departure  for 
laying  down  rules  governing  access  to  the  new  service  activities  {a priori  control  or 
a posteriori  control).  The  different  approaches  that  currently  exist  in  the  intellectual 
property field or the arrangements applicable to encryption systems (some Member States 
provide for prior authorisation, while others do not) also serve to illustrate this point. 

Reasons relating to the polymorphism of Information  Society services.  In  view  of the 
fact that these services will be highly diverse, the spectrum of legal fields concerned will 
also be very wide.  The risk of divergent regulatory approaches is therefore  all the greater 
and will result, at the level of the functioning  of the area without internal frontiers,  in an 
increase  in  the  number  of  potential  obstacles  to  the free movement  of  services.  This 
gives  particular  cause  for  concern  because  service  providers  will  generally  provide  a 
package, or  bouquet, of several  services, as a result of which there  is also  an  increased 
risk  of their  encountering  new legal  barriers.  Thus, a service provider  who  provides  a 
bouquet  of  services  consisting  of interactive  games, teleteaching, video-on-demand  and 
teleshopping  might  have  one  of  his  services  restricted  in  one  Member State,  while  in 
another  Member State  it  is  another  service  that  is  restricted.  The  number  of  possible 
combinations  of  situations  of  this  type  has  obvious  implications  for  the  increased 
potential for raising barriers. 

Initial signs of divergent approaches confirm the magnitude of this risk.  A study of the 
work  in  hand  reveals,  for  example,  that  there  are  differences  in  the  thinking  on,  and 
approaches  to, the  question  of  whether  a  system  of  prior  authorisation  is  necessary  or 
whether,  on  the  contrary,  a  system  closely  resembling  that  applicable  to  the  press  is 
needed.  To give another example, the regulatory issues that have been identified  as being 
important are not always the same (matters such as labour law, the protection of minors 
and the rules on liability are not always mentioned in the individual studies and reports). 

2.  Risk of overregulation 

The  political  mobilisation  and  the  mobilisation  of  interested  parties  around  the 
Information  Society  theme  could  result  at  national  level  in  new  rules  and  regulations 
which  will  themselves  result  in  Community  regulatoryactions  despite  the  fact  that  the 
need for such actions has not always been established. 

Internal  Market  legislation  is  necessary  only  where  national  measures  have  restrictive 
effects  on  the  freedoms  enshrined  in  the  Treaty  which  cannot  be  resolved  by  direct 
application  of  the  Treaty  or  by  the  existing  secondary  legislation.  Evaluating  these 
restrictive effects  can be a complex task given that in many cases it will be necessary to 

24 

assess  whether  the  national  measures  creating  such restrictions  are  proportional  to  the 
general  interest  objective  they  pursue.  It  is  worrying  that,  when  faced  with  national 
regulations  giving  rise  to  this  type  of  problem,  some  interest  groups  might  prefer  to 
extend  them  to  the  whole  Community  via harmonisation  rather  than  carry  out  such  an 
evaluation  exercise  enabling these new barriers to be removed  by  applying  directly  the 
< 
Treaty. 

This  would  be  tantamount  to  'encouraging  faits accomplis  aimed  at  provoking  a 
Community response.  The risk of overregulation must not be underestimated  given that 
pressure  is  already  clearly  being  exerted  by  certain  interested  parties,  operators, 
trade associations, consumer associations, etc.45 

The Commission  considers there should be no excessive regulation at Community  level 
simply  with  a  view  to  complying  with  vociferous  requests  for  intervention,  but  that 
instead  reliance  must  be  placed  on  the  well-tested  principles  of  the  Internal  Market, 
notably that of mutual recognition. 

3.  Risks of inconsistency 

The regulatory  activity  at national  level that will take place in the years ahead might  be 
reflected  at Community  level not only in overregulation but also in measures which are 
mutually inconsistent.  The diversity of general interest objectives which will be pursued 
at national  level  (protection  of the consumer, culture, health, etc.) might, as is permitted 
by the Treaty on European Union, be extended at Community level by measures pursuing 
each of these objectives in isolation, without any overall consistency. 

The  Commission  considers  that  all  national  measures  should  respect  the  regulatory 
consistency  that  is  essential  to  the  future  development  of  these  services  and  take  full 
account  of  all  general  interest  objectives.  Inasmuch  as the purpose  of Internal  Market 
secondary 
level  of  protection  between 
Member States  of  a  variety  of  general  interest  objectives,  the  Commission  has  already 
decided that any regulatory response to the new services will have to fit into the tried and 
tested framework of the Internal Market. 

is  to  ensure  an  equivalent 

legislation 

45 

A  number  of  operators'  representatives  outlined  their  position  at the  G7 summit  in  Brussels  on 
24-26 February 1995.  Following  the  manufacturers'  European  round  table,  a  document  was 
drawn  up  entitled  "Building  a  global  Information Society  -  A  call  for  Government Action", 
May 1995, calling for adaptation of national and international rules in the areas of data protection, 
intellectual  property  law,  civil  law  and criminal  law with  a view  to  affording  better protection 
against piracy (encrypted services), the rules on liability, etc.  The same areas were identified by 
representatives of the audiovisual industry, cable operators and telecommunications  companies at 
a  seminar  held  in  Belgium  from  19  to  21 May  1995  (The  Waterloo  Report  on  "Transatlantic 
Dialogue  on  Broadcasting  and  the  Information  Society");  three recent  resolutions  of  the 
International Communications Round Table (ICRT) also stressed certain regulatory requirements. 

25 

III.  DESCRIPTION OF THE TRANSPARENCY MECHANISM 

The  Commission  proposes  to establish  a regulatory  transparency  mechanism  based  on 
Directive 83/189/EEC laying  down  a procedure  for  the provision  of  information  in  the 
field of technical standards and regulations.46  To this end, the Commission is presenting 
a proposal for  a Council Directive amending Directive 83/189/EEC for the third time by 
extending  the  information  exchange  procedures  provided  for  therein  to  include  future 
draft rules and regulations of the Member States on Information  Society services. 

A.  Objectives 

The general objective of the transparency mechanism proposed by the Commission is to 
enable the Internal Market to function  more smoothly in the Information  Society services 
field.  The mechanism pursues more specifically the following  objectives: 

1*  Ensuring the smooth functioning  of the Internal Market by avoiding the creation 

of new obstacles 

The  exchange  of  information  between  Member States  and  between  Member States 
and  the  Commission  is  intended  to  make  it  possible  to  detect  in  good  time  any 
difficulties  in the functioning  of the area without internal frontiers and to take action 
to prevent  either  the  adoption  of  national  regulations  which might  be  incompatible 
with  the  principles  of  the  freedom  to  provide  services  and  the  freedom  of 
establishment  (contacts  with  the  other  Member States  or  the  Commission  having 
dissuaded the Member State concerned from adopting the draft  or having  induced  it 
to  amend  it), or  the  creation  of  legal  barriers  (where  such  regulations  are  justified 
under Community law) by proposing, where appropriate, Community rules.  It  is in 
no way the Commission's intention to limit the power to legislate at national level in 
order  to  protect  the  general  interest,  but  only  to  prevent  refragmentation  of  the 
Internal Market. 

2*  Ensuring more effective protection of the general interest 

The need for  Community  action to ensure that the general interest is protected  in an 
equivalent  manner  in  all  Member States must be anticipated  and  identified  in  good 
time.  Domestic concerns which may induce a Member State to seek to legislate may 
be shared by other Member States and may be more effectively  met by protection at 
Community  level.  This latter  aspect is essential  in the Information  Society  context 
given  that  the  technological  environment  will  increase  (a)  the  opportunities  for 
circumventing  protection provided  for  solely  at the level  of  a single  Member State; 
(b) the problems linked to determination of the law applicable to service providers or 
to the services  themselves;  (c)  the  identification  of  guilty  parties;  and  (d)  the 
difficulties  connected with effective  application of the rules or with crime prevention, 
etc. 

46 

Council  Directive  of 28 March  1983  laying  down  a procedure  for  the  provision  of  information  in 
the  field  of  technical  standards  and  regulations  (OJL  109,  26.4.1983,  p. 8),  as  amended  by 
Directive 88/182/EEC  of  22March  1988  (OJL  81,  26.3.1988)  and  by  Directive94/10/EC  of 
23 March  1994 (OJ L 100, 19.4.1994). 

26 

3*  Tareetine more accurately and reducing the need for new Community rules 

In order to limit the need for legislating at Community level to that which is strictly 
necessary, it is essential that the Treaty, and in particular Articles 52 and 59 thereof, 
be  applied  more  effectively.  A  transparency  mechanism  would  make  a  valuable 
contribution here by making it possible, upstream, to forestall or limit the adoption of 
certain  national  laws  which  might  subsequently  lead  to  Community  regulations 
aimed  at  validating  them.  Above  all,  the  national  legislator  must  consider  the 
possibility  of  applying  mutual  recognition  instead  of  allowing  fait accompli 
situations  to  develop  which  might  lead  to  harmonisation  being  proposed  at 
Community  level.  In  any  event,  since  it  represents  an  information  gathering 
procedure  which does  not prejudice  the basic evaluation of  the possible  need  for 
future Community harmonising measures, the transparency mechanism, wherever it 
is  necessary  to  ensure  effective  protection  of  a  general  interest  objective  through 
intervention  at  Community  level, will  contribute  to the possibility  of  a more  rapid 
and well informed introduction of a new harmonisation measure. 

4*  Facilitating administrative  co-operation 

A mechanism for the exchange of information  between Member States at the stage of 
the drafting  of rules and regulations should encourage the national  legislator to ask 
other national  administrations  about the situation in the other Member States.  The 
aim  is  not to  challenge  the  power  of  Member States to  legislate,  but to  create  an 
awareness  of  the potential  danger both to the  Internal  Market and to  the  effective 
protection of general interest objectives stemming from isolated legislative initiatives 
which ignore both experience gained elsewhere and the impact on service providers 
established  in  other  countries.  The  transparency  mechanism  is  a  particularly 
effective  tool of administrative co-operation which may lead to a genuine, collective 
European reflex. 

5*  Contributing to the stability of the regulatory framework 

The existence of a clear, stable legal framework has been identified as a precondition 
for  stimulating  the  development  of  the  Information  Society.  The  aim  of  a 
transparency mechanism is precisely to contribute to the stability and accessibility of 
the regulatory framework, first of all  by limiting the risk of unforeseeable  regulatory 
reactions,  secondly  by  avoiding  periods  of  uncertainty  during 
infringement 
proceedings,  and  thirdly  by  enabling  operators  and  consumers  to  have  more 
information about any draft rules and regulations that might affect  them. 

6* Improving the Community's participation in discussions at the international level 

The  definition  of  a  stable,  coherent  Community  law  framework  is  a  basic 
precondition for effective,  co-ordinated participation by the European Community  in 
work on regulatory  issues relating to  Information  Society  services  in the  context  of 
international co-operation and negotiations. 

27 

B.  Central approach 

1.  Experience gained with existing transparency mechanisms 
The idea of ensuring the  smooth functioning  of the area without internal frontiers with 
the help of a regulatory transparency mechanism is far from new.  Directive 83/189/EEC 
of 28 March  1983 laying down a procedure for the provision of information  in the field 
of technical  standards and regulations  is the most  comprehensive  instrument  to  date on 
regulatory transparency.  The Directive, which has already been amended twice, notably 
to widen its scope,  has become a key instrument  of Internal Market policy.  There are 
other  transparency  mechanisms  based  on  Directive 83/189/EEC.  They  differ  from  it, 
however, either  in that they are directed,  not  at draft  rules and regulations, but  national 
measures which may continue to exist despite the fact  that they form  an obstacle to the 
free  movement  of  goods  (European  Parliament  and  Council  Decision  establishing  a 
procedure  for  the  exchange  of  information  on  national  measures  derogating  from  the 
principle of the free movement of goods within the Community48), or in that transparency 
is only a secondary aspect compared with the general aims pursued by the instruments in 

49 

question. 

(a)  Functioning of Directive 83/189/EEC 

The Directive ensures that information  is exchanged between Member States in the field 
of  technical  regulations  and  standards.  Member States  are  required  to  inform  the 
Commission50 and the other Member States of any draft  national technical  regulations51 
they  propose  to  adopt.  A  three-month  standstill  period  is  provided  for  to  enable  the 
Commission and the other Member States to examine the draft  measures and make their 
reaction known. 

47 

48 

49 

50 

51 

Council  Directive 88/182/EEC 

of 

22 March  1988 

(OJL 81, 

26.3.1988) 

and  Council 

Directive 94/10/EEC of 23 March  1994 (OJ L 100, 19.4.1994). 

OJ C 18, 21.1.1994,  p. 13.  The  Council  adopted  a  common  position  on  29 June 1995  (OJ C 216, 
21.8.1995,  p. 41).  The  Decision  provides  for  the  provision  of  information  to  the  Commission 
within  45 days  of  the  date  on  which  the  measure  was  taken;  the  Commission  forwards  the 
information  to the other Member States. 

cf.  Directive 87/22/EEC of 22 December  1986 (Article 5) on the approximation  of national  measures 
relating  to the  placing  on  the  market  of  high-technology  medicinal  products,  particularly  those 
derived from  biotechnology (OJ L 15,  17.1.1987, p. 38); Directive 93/98/EEC of 29 October  1993 
(Article  12) harmonizing the term of protection  of copyright and certain related rights (OJ L 290, 
24.11.1993,  p. 9);  Directive 94/62/EEC  of  20 December  1994  (Article  16)  on  packaging  and 
packaging waste (OJ L 365, 31.12.1994, p. 10).  Whereas Directive 87/22/EEC refers expressly to 
those  articles  of Directive 83/189/EEC  which  provide that the notification  is to  have  suspensive 
effect,  the  other  two  do not provide  for  such  an  effect,  requiring  only  that  draft  regulations  be 
notified. 

Under  Article 8(1),  Member States  must  communicate  to  the  Commission  any  draft  technical 
regulation  at a stage  in  its preparation  at which  substantial  amendments  can  still  be made.  The 
Commission circulates the information  among the Member States in order to make them aware of 
national initiatives. 

Technical  regulation  is  defined  as  a  technical  specification  or  other  requirement  the  observance  of 
which is made compulsory de jure  or de facto,  by a Member State in the case of the marketing or 
use  of  a  product  in  its  territory  (Article  I).  The  category  of  de facto  compulsory  technical 
regulations  includes  voluntary  agreements  to  which  the  public  authorities  are  party  and 
professional  codes of conduct, compliance with which confers  a presumption  of conformity  with 
the requirements laid down by certain rules and regulations. 

28 

Four scenarios are then possible: 

1 -  No  comments from the  Member States  and/or the  Commission.  In mat  event,  the 
Member State concerned may adopt the draft rule upon the expiry of the three-month 
standstill period. 

2-  Comments, by the Commission or a Member State, about the possible consequences 
for the Internal Market of the proposed measures were they to be adopted and applied 
to  goods  from  other  Member  States,  and  requests  for  amendment.52  The 
Member State  concerned  is  required  to  take  the  comments  into  account  as  far  as 
possible when  it draws up the definitive  version.  Such comments  often  result  in a 
mutual recognition clause which is inserted in the draft law. 

3-  Detailed  opinion  issued  by  the  Commission  or  by  a  Member State  where  they 
consider that, were it to be applied  to goods from  other Member States, the measure 
would  contravene  the  Community  rules  on  the  free  movement  of  goods.53  The 
issuing of a detailed opinion extends the length of the standstill period to six months 
(or four months in the case of voluntary agreements).  The purpose of this period is to 
allow the  matter  to  be  re-examined  and  to  prevent  an  infringement  of  Community 
law from occurring. 

4-  Declaration  that  the  Commission is  going  to  propose, 4  or  has  proposed,55 
Community  measures  in  the  area  in  question.  The  announcement  extends  the 
standstill period to  12 months, or to  18 months if the Council adopts, before the end 
of the  period,  a common position  on  the proposal.  The extension  of  the  standstill 
period  is  to  enable  the  Community  to  examine  the  matter  without  the  discussion 
being  distorted  or made more complicated  by  earlier  measures.  It  is not,  however, 
possible in the case of voluntary agreements. 

If  a  Member State  wishes  to  adopt  a  technical  rule  for  urgent  reasons  relating  to  the 
protection  of  public  health  or  safety,  the  protection  of  animals  or  the  preservation  of 
plants, it may be authorised to do so without having to observe the standstill period.56 

An  Advisory  Committee 
consisting  of  Member States'  representatives  meets 
approximately six times a year and plays an important part in supervising the conduct of 
the procedure and examining political issues raised by notifications. 

A  vade-mecum,  adopted  by  the  Committee,  explains  the  operational  aspects  and,  at 
length, the procedures  to  be followed  (categories  of  information,  details  and  content of 
the notification, etc.).58 

52 

53 

54 
55 
56 
57 

The  Member States  and/or  the  Commission  may  make  comments  pursuant  to  Article 8(2)  of  the 
Directive.  At the request of the other Member States or of the Commission, the definitive  text of 
the technical regulation must be communicated to them. 

Article 9(2)  of  the  Directive.  The  detailed  opinion  of  the  Commission  is  a  formal  act  which  is 

equivalent to service of notice if the draft  is adopted as it stands. 

Article 9(3). 
Article 9(4). 
Article 9(7). 
Article 6. 

29 

With regard to the instrument's legal scope, the Commission has taken into account that a 
finding  that  a  Member State  has  failed  to  fulfil  its  obligation  to  comply  with  the 
notification procedure introduced by Directive 83/189/EEC may well remain a dead letter 
as  long  as  the  national  measure  remains  in  force. 
It  accordingly  stated  in  a 
communication  dated  1 October 1986 that  unnotified  technical  rules  cannot  have  legal 

59 

effect  against third parties. 

(b)  Application and evaluation 
In  the  light  of  the  latest  statistics,  Directive 83/189/EEC  has  clearly  confirmed  its 
reputation  as  a  key  procedural  instrument  that  is  both  highly  incisive  and  effective  in 
terms of the  results achieved.  In  1992, 1993 and  1994 the Commission processed  1 136 
draft  national  technical  rules,  across  all  sectors.  It  delivered  355  detailed  opinions  in 
respect of Member States, made 532 comments and made 62 declarations with a view to 
furthering harmonisation at Community level.  Member States' reactions to notified  drafts 
in the form of detailed opinions (226) or comments (473) are increasingly numerous, and 
this  enhances,  in  a  spirit  of  great  transparency,  their  participation  in  the  notification 
procedure. 
With regard to  the Member States, the  examination  of  drafts  by  the  Commission  and 
other  Member States  has  played  a  dissuasive  role  and  awakened  among  them  an 
awareness  of  their  European  responsibilities.  The  Commission  is  grateful  for  the  co 
operative  attitude  shown  by  Member States,  prepared  as  they  are  to  modify,  where 
necessary,  their  instruments  when they  are  still  in draft  form  so  as to  insert,  notably, a 
mutual recognition clause. 

With regard to operators, this  transparency  is  beneficial  inasmuch  as they  are  able  to 
intervene  indirectly  when  Member States  solicit  their  views  on  the  various  national 
legislative  proposals  with  which  they  will  be  confronted  in  the  Internal  Market.  The 
cessation  of 
introduced  by 
the  obligation  of  confidentiality,  an  amendment 
Directive 94/10/EC,  enables  economic  operators  who  are  concerned  mainly  about 
technical obstacles to defend their interests better during the notification procedure rather 
than belatedly through a complaint.  The part played by operators is worth  emphasising 
as the mechanism  may  constitute  not only  an instrument  of administrative  co-operation 
but  also  an  instrument  of  co-operation  between  the  authorities  and  interested  parties, 
thereby helping to improve the quality of regulations. 

58 

59 

The  Directive  also  lays down  (Articles 2-7), with  regard  to technical  standards,  a procedure  for  the 
exchange  of  information  between  national  and  European  standards  bodies  and the  Commission. 
The  procedure's  implementation  has  been  entrusted  by  the  Commission  to  the  European 
standardisation organisations. 

Commission  communication  on  the  non-respect  of  certain  provisions  of  the  Council Directive 
(83/189/EEC) of 28 March  1983, providing for an  information  procedure  in the field  of technical 
standards  and  regulations,  OJ C 245,  1.10.1986,  p. 4.  The  Court  of  Justice  has  so  far  imposed 
penalties on Member States for failing to notify  such provisions on four occasions. 

30 

2.  The proposed transparency mechanism 
In order that it might be able to satisfy  the needs that have been identified  and attain the 
objectives  that  have  been  defined,  the transparency  mechanism  applicable  to  rules  and 
regulations on Information  Society services should, in the Commission's opinion, possess 
the following four features: 

(a) A binding legal instrument 

The Commission is convinced that, in order to ensure effective  regulatory  transparency, 
the Community must have a legally binding instrument at its disposal.  No other initiative 
can  meet  the  requirements  and  objectives. 
If  it  were  left  to  the  discretion  of  the 
Member States to  communicate  their draft  regulations  on Information  Society  services, 
this would limit considerably the scope and effectiveness  of the transparency and would 
detract from the spirit of administrative co-operation. 

(b) A prior  information procedure 

Only a system of prior notification  can forestall  and prevent in good time the creation of 
obstacles  to  the  Internal  Market  freedoms.  Ex post facto  notification,  that  is  to  say, 
notification  after  the  national  rules  have  been  adopted,  would  suffer  from  several 
drawbacks: 

• 
it  would  simply  amount  to  noting  the  existence  of  new  legal  barriers  between 
Member States  which  can  be  removed  only  by  resorting  to  lengthy  procedures  (action 
under Article 169 of the Treaty for  failure to fulfil  an obligation) or by harmonising the 
rules in question.  In either case, the result would be that operators and consumers would 
have  to  bear,  in  the  meantime,  the  costs  arising  from  the  lack  of  a  genuine  Internal 
Market; 

• 

• 

it would  encourage faits accomplis, that is to  say, cases in which the  adoption  of a 
national rule has the effect  of forcing the Community to act; 

it could not stimulate a European administrative co-operation reflex  since it would be 
in essence a purely  formal  procedure  (transmitting  a text) rather  than  an attempt  to 
evaluate  together  the  Community  impact  of  legislation.  In  any  event,  once  such 
legislation  had  been  adopted,  the  authorities,  room  for  manoeuvre  would  be  very 
limited. 

Consequently,  the Commission proposes that the same approach as that established by 
Directive 83/189/EEC should  be  adopted:  Member States  should  communicate to  the 
Commission any draft rule or regulation which will be applicable to Information Society 
services at a stage in its preparation at which substantial amendments can still be made. 
This obligation to notify will cover voluntary agreements to which the public authorities 
are party  and professional codes or codes of conduct compliance  with which confers a 
presumption  of  conformity  with  the  requirements  laid  down  by  certain  rules  and 

31 

regulations. 
Member States in order that they might take note of national initiatives. 

The Commission  will  circulate this  information  among all  the other 

(c)  A consultation procedure 

A  mere  obligation  to  transmit  drafts  without  any  subsequent  procedure  would  be 
ineffective: 

• 

• 

it  would  provide  no  guarantee  that  the  national  authority  concerned  would  take 
account  of  any  comments  made  by  the  Commission  or  other  Member States  and 
prevent the creation  of obstacles to the freedoms  enshrined  in the Treaty.  The sole 
means  of  guaranteeing  these  freedoms  is  to  specify  a  period  during  which  the 
Member State  may  not  adopt  the  draft  regulation.  During  this  period,  the 
the  Member States  and  the 
administrative  co-operation  may  function  fully, 
Commission  being  able  to  assess  the  draft  in  question  and  propose,  where 
appropriate,  that  the  measure  envisaged  be  amended  with  a  view  to  removing  or 
reducing the barriers to free movement; 

it would reduce the chances of speedily adopting a harmonisation  proposal  aimed at 
protecting the general interest at Community level (where this is necessary), since the 
Member State  concerned  might  prefer  to  adopt  its  legislation  and  thus  perhaps 
challenge  the  need  for,  or  the  thrust  of,  the  work  at  Community  level.  Only  a 
standstill  period  during  which  the  adoption  of  the  draft  is  not  possible  would  not 
compromise any Community initiatives. 

Consequently,  the Commission proposes, here too, to apply the procedures provided for 
in  Directive 83/189/EEC: following  notification  of  the  draft  regulation,  an  initial 
standstill period  of  three months starts  to  run  during  which  Member States  and  the 
Commission may intervene to make comments,  deliver a detailed opinion (total standstill 
extended to  six months or four months in the case of voluntary agreements) or,  in the 
case of the Commission,  declare that a future  harmonisation proposal  will be presented 
or  that  it  has  already proposed  harmonisation  measures (total standstill  extended to 
12 months,  or 18 months if a common position has been reached). 

(d) A committee 

A committee should make it possible to administer the procedure effectively.  As already 
indicated,  one  of  the  main  objectives  of  the  transparu i^/  m< chanïgm  is  to  stimulate  a 
to  promote 
dialogue  between  the;  legislators  of  the  various 
administrative  co-operation.  Administrative  co~operoL,,  '^  Tce^ M un rr- States  is all 
the more justified  as Information  Society  services  ar  pjC^e f:- rvric  and  unforeseeable 
development.  The creation of a forum  intended for the exchange of experience can only 
enrich and improve the contemplated regulations and increase awareness among national 
administrations that their draft  legislation might harm the proper functioning  of the area 
without internal frontiers.  In the short term, the Committee might, for example, examine 
certain  questions  concerning  problems  of  interpreting  the  current  rules  in  the  light, 

î. »  \r  fist's 

tud 

60 

The Commission  considers that, provided  a link with the State can be established, professional  codes 
must be communicated.  Thus, draft  amendments to professional  codes should be notified  where 
the regulatory power of the professional body is based on a legislative provision. 

32 

among  other  things,  of  the  dialogue  that  should  exist  between  the  authorities  and  the 
parties concerned. 

The Committee provided  for  in  Directive 83/189/EEC  can play  this  role  and  may 
therefore serve as a model for  the regulatory transparency mechanism. 

C.  Legal instrument 

The Commission  proposes  widening  the  scope of Directive 83/189/EEC.  This  method 
has the following advantages: 

• 

• 

• 

• 

61 

62 

the 

the  framework  of 

the  Directive  meets  the  precise  requirements  and  has the  same  objectives  as  those 
pursued  within 
(preventing 
refragmentation,  protecting the general interest better at Community  level,  avoiding 
overregulation  and  inconsistent  regulations,  ensuring  administrative  co-operation), 
and is the most comprehensive instrument in the area of regulatory transparency.  By 
contrast,  the other  transparency  instruments  have been presented  in  the  form  of  an 
autonomous measure61 because they meet different  needs and provide for  obligations 
different  from those of Directive 83/189/EEC; 

Information  Society 

it  makes  it  possible  to  draw  on  the  experience  and  know-how  gained  from 
implementing Directive 83/189/EEC over a period of several years, in particular: the 
Commission's  implementation  policy, the case-law of the  Court,  the  administrative 
machinery that  has been  in place at Member State level for  a number  of years now 
for the purpose of administering the Directive's application, the existing  Committee, 
the  structure,  set  up  by  the  Commission,  for  monitoring  proper  compliance  by 
Member States  with  the  obligation  to  notify  and  the  vade-mecum  explaining  the 
practical procedures to be followed  by Commission departments and Member States' 
administrations; 

it prevents  the need  for  two different  instruments, one for  draft  rules  on  goods  and 
the other for draft rules on services.  Two separate instruments would complicate the 
task of national  authorities  when it comes to implementing  the mechanism,  thereby 
running counter both to the aim of ensuring legal clarity and to the very objective of 
transparency.  The lack of correspondence between the obligations  laid down  in the 
two instruments would lead, above all, to inconsistent legal situations  in the case of 
regulations  governing  both  services  and  products.  This  scenario  could  be  fairly 
common given that, as economic analysis has shown, services activities are going to 
be linked to those of distributing goods; 

lastly,  it  is  a  repeat  of  a  method  that  has  been  used  successfully  twice:  the  first 
amendment  to  the  Directive  consisted  in  extending  the  concept  of  technical 
specification  to cover all industrial products not yet included in the original  scope of 
the  Directive,  that  is  to  say,  medicinal  products,  cosmetics,  and  all  agricultural 
products.  The second  amendment  broadened  the concept by including  production 

Either  by  forming  only  part  of a Directive, or  by constituting  a separate  instrument  (proposal  for  a 

Decision establishing a procedure for the exchange of information). 

Directive 88/182/EC, OJ L 81,  16.3.1988, p. 75. 

33 

methods  and  processes  relating  to  industrial  products  and  the  concept  of  "other 
requirements" imposed on a product (Article 1(2) and (3)).63 

D.  Seope 

1.  Regulations concerning services that must be notified 
Since  this  is  an  instrument  intended  to  ensure  the  smooth  functioning  of  the  Internal 
Market, all draft  rules and regulations which may create obstacles to the free movement, 
between  Member States,  of  Information  Society  services  and  to  the  freedom  of 
establishment  of  service  providers  should,  in  principle,  be  notified.  The  practical 
application  of  the  instrument  calls, however,  for  the clearest  possible  indication  of  the 
rules and regulations to be notified  in order, first, that national authorities might readily 
determine which drafts  have to be communicated and, secondly, that the Member States 
and  the  Commission  are  not  overburdened  by  unnecessary  notifications.  There  are 
several possible ways of achieving this: 

-  The method consisting in defining  precisely what "Information  Society services" are 

would be inappropriate: 

(i)  first,  a detailed  and specific  definition  would be particularly  difficult  in view 
of  those  services'  diversity,  polymorphous  nature  and  complex  architecture, 
incorporating,  as  they  do,  features  from  telecommunication  services, 
audiovisual services, traditional services and the press; 

(ii) 

secondly,  such  a  definition  would  be  artificial  and  lacking  in  clarity,  and 
would  add to the current  terminological  confusion  surrounding  "multimedia" 
services  "on-line"  services,  "telematic"  services,  "audiovisual"  services, 
"broadcasting"  services,  etc.  Depending  on  the  Member State,  different 
terms may be used to refer to the same type of service. 

An  alternative  method  consisting  in  drawing  up  a  list  of  services  (electronic 
commerce, telemedicine, teleteaching, etc.) and requesting notification  of those  draft 
regulations  which  might  affect  them  is  not  a  satisfactory  solution  either.  The  two 
main drawbacks of such a list would be, first, that it could not be exhaustive, market 
analysis having shown that a precise picture cannot yet be formed  of a large number 
of services that will be developed in future, and secondly, that it would call for  clear, 
unambiguous definitions of each of these categories - a particularly complex task. 

The  Commission  considers  that  the  point  at  issue  here  is  not  the  terminological 
question  of  what  Information  Society  services  are  (or  are  not).  What  needs  to  be 
done  is,  rather,  to  find,  for  the  purposes  of  the  Internal  Market  and  of  the 
transparency  mechanism,  criteria  which  make  it  possible  to  determine  which  draft 
regulations will have to be notified.  The key element is the need to cover those  draft 
rules which will form part of the regulatory  adaptation exercise that is going to take 
place  while  the  Information  Society  develops.  This  means  that  those  regulations 
which  have  stabilised,  that  is,  those  which  are  prima facie  unlikely  to  evolve 

63 
64 

Directive 94/10/EC, OJ L 100, 19.4.1994. 
Cf. Directive 89/522/EEC of 3 October 1989. 

34 

substantially,  should  not  be  covered. 
In  this  respect,  the  factors  which  will 
necessitate new regulations over and above the existing ones on traditional  services 
(doctors, lawyers, schools, etc.) are that the services will be provided at a distance by 
electronic means: compared with current regulations on television broadcasting, the 
key factor  is that they will be interactive, in other words they will meet one or more 
individual requests from a particular service receiver.  The interactivity  lies in this 
particular  link between the service receiver and the service provider, each one being 
able to intervene and influence  the content of the service, the consumer all the more 
so as he can choose it and control its content. 

In  the  light  of  these  criteria,  the  Commission  proposes  that  only  draft  rules  on  the 
taking-up and pursuit of service activities,  where the services are provided at a distance, 
by  electronic means and  on  the  individual request of  a  service  receiver  should  in 
principle be notified. 

This "service" defintion would cover, for examlpe: 

- On-line professioanl  services (solicitors services, psychologists, stock-brokers, on 

line health services, etc.) 

-  interactive  entertainment  services  (video on demand, on-line video-games,  virtual 

vists to museums, etc.) 

- on-line infromation  services (electronic library, on-line meteorological services, on 

line financial information services etc.) 

- virtual shopping malls 

- on-line electronic newspapers 

- on-line tourism services 

- on-line estate agents 

- on-line insurance services 

- on-line educational services 

On the other hand, this defintion  would not cover (because they are either not offered  at a 
distance, or not offered  via electronic means, or not supplied on individual demand): 

- television broadcasting services (including near video on demand services) 

- radio broadcasting services 

-teletext 

- non-electronic direct marketing services (for example, mail order catalogues) 

- automatic bank tellers 

35 

- electronic games such as found in amusement arcades 

- Voice telephony services (including via GSM) 

As regards  which draft  rules should be notified,  mention should first be made of those 
regulatory  measures  specifically  and  primarily  aimed  at  new  services  laying  down 
conditions  as to  their  content  (advertising,  protection  of minors, etc.)  or relating  to  the 
service  provider  (solvency,  worthiness,transparency 
the  operator, 
ownership, etc.), those on the authorisation arrangements for new services, and those on 
the conditions  to undertake  the service activities (intellectual property, encryption, etc.). 

identifying 

in 

Moreover, provisions seeking to adapt a general regulation already in force to account for 
new services would  also have to be notfied.  Such an example would be the recent pre-
draft  German 
information  and 
telecommunications  services: it foresees  extending existing general legislation protecting 
participants  in  distance  education  services,  price  indications,  personal  data  protection, 
protection of minors etc to new services. 

the  regulatory  framework 

law  concerning 

for 

Likewise, provisions aimed specifically  at Information  Society  services included  in new 
regulations  seeking  to  achieve  more  general  objectives  will  also  have  to  be  notified 
(together with all the other provisions of these regulations in order to assess their scope). 

On the other hand,  draft  horizontal  legal rules (such as those of general company law), 
or  a rule  setting  out  the  general  conditions  required  to  enter  a profession  (such  as,  for 
example,  requirement  of  a  diploma,  general  worthiness  conditions,  solvency,  etc.)  not 
specifically  aimed at Information  Society services  cannot be deemed, even indirectly, to 
contain rules  "on new services" of the Information  Society as such and will  accordingly 
not have to be notified. 

The  Court  of  Justice  held  in  its  judgement  of  30 April 1996  (in  Case  C-194/94) 
concerning  Directive 83/189  that  a  national  rule  which  merely  serves  as  a  basis  for 
enabling the adoption of successive legal instruments (containing binding rules), without 
having  legal  effects  of  its  own,  would  not  be  subject  to  the  obligation  of  prior 
notification. 

For  the  purpose  of  delimiting  the  extent  of  the  prior  notification  obligation,  it  is  also 
necessary to consider the various exceptions already provided for in Directive 83/189. 

2.  Exceptions 

The exceptions already provided for in Directive 83/189/EEC will also apply to the  draft 
rules and regulations.  The following will thus not have to be communicated: 

•  Member States'  laws,  regulations  and  administrative  provisions  and  voluntary 
agreements  by  means  of  which  Member States  comply  with  binding  Community 
instruments  or  fulfil  commitments  arising  out  of  international  agreements  which 
result  in  the  adoption  of  common  technical  specifications.  More  particularly,  this 

36 

means  in  essence  that  draft  national  laws  implementing  a  Community  Directive 
which,  through  its  content,  may  affect  Information  Society  services  (e.g.  the 
Directive  on  the  protection  of  personal  data,  me. Directive  on  distance  selling,  the 
revised Directive on television without frontiers or the future Directive on a common 
framework  for general authorisations and individual licences for  telecommunications 
services) are not subject to the transparency mechanism; 

•  provisions  by  which  Member States make  use of  safeguard  clauses provided  for  in 

•r 

binding Community instruments; 

•  provisions implementing a judgement of the Court of Justice; 

•  provisions  the  communication  of  which  in  draft  form  is  provided  for  by  other 
Community  instruments  (e.g. Article 12 of Directive 93/98/EC harmonising  the term of 
protection  of  copyright  and  certain  related  rights65).  Member States  must,  however, 
formally  indicate that such communication is also valid for purposes of the transparency 
mechanism. 

There  are  also  a  number  of  exceptions  to  the  standstill  periods: these  do  not  apply  to 
fiscal  or financial measures, and the  12-month standstill period (which may be extended 
to  18 months  in  the  case  of  a  common  position)  is  not  applicable  to  voluntary 
agreements. 

Recourse to one of the legal bases on which the Internal Market rests is the logical and 
consistent  solution.  The purpose of the proposed  legal instrument  is, given its aim and 
content, manifestly to ensure the smooth functioning  of the Internal Market.  This is clear 
from  the objectives set out above.  The contents of the mechanism  itself, that  is to say 
the notification procedure, the holding of consultations with the other Member States, the 
standstill  periods  and  the  emergency  procedure,  are  the  appropriate  legal  solutions 
whereby the above objectives may be effectively  attained. 

Moreover,  Directive 83/189/EEC  (and the Directives  amending  it) is itself based  on the 
Internal Market, and the present proposal for  a Directive in no way alters the object  and 
purpose of that Directive (since it consists solely in broadening the scope so as to prevent 
the creation of new obstacles to the Internal Market). 

When choosing among the possible legal bases of the Internal Market, Articles  100a and 
213  are  considered  to  be  the  most  appropriate  bases  for  the  proposal  for  a  Council 
Directive amending Directive 83/189/EEC.  The reasons for this are as follows: 

•  Directive 83/189  is itself based  on Articles 100a and 213 (apart from Article 43); a 
need  for  consistency  justifies  recourse  to  the  same  legal  basis  for  the  Directive's 
extension; 

65 
66 

OJL290,24.11.1993, p. 9. 
Part III.A. 

37 

admittedly,  Article  100a can  be  considered  as  a  legal  basis  only  in  the  alternative, 
that is to say, only if the Treaty does not provide otherwise.  In this respect, being an 
instrument  aimed  at  preventing  the  introduction  of  new  restrictions  to  the  free 
movement  of  services  and  the  freedom  of  establishment  of  service  providers, 
Article 57(2),  to  which  Article 66  refers  for  the  part  concerning  services,  might 
constitute  a specific  legal  basis.  However,  a Directive  based  on- Article 57(2)  must 
seek to co-ordinate  provisions  laid down  by law, regulation  or administrative  action 
in Member States; the Directive which is being proposed, however, seeks only to lay 
down a notification procedure without introducing any substantive legal provisions. 

F.  Subsidiarity 

This proposal  for a Council Directive amending for the third time Directive 83/189/EEC 
is perfectly in keeping with the spirit of subsidiarity: 

• 

• 

• 

the  transparency  mechanism  will  permit  a  better  application  of  Article 59  of  the 
Treaty  and  of  the  principle  of  mutual  recognition  which  stems  therefrom,  and  this 
will  have  the  effect  of  limiting  the  need  for  new  Community  regulations  to  that 
which is strictly necessary, and hence limiting also the risk of overregulation.  From 
this point  of view, the transparency  mechanism  is the instrument  of choice when it 
comes to meeting the concern for subsidiarity; 

action  at  national  level  could  under  no  circumstances  attain  the  Internal  Market 
objectives  pursued  by  this  proposal  and,  a fortiori,  achieve  them  effectively. 
Effective  co-ordination of the new national rules can be ensured only at Community 
level; 

the  mechanism  will  contribute  to  a  better  application  of  the  subsidiarity  principle 
since it will enable both the Member States and the Commission to identify  together 
possible  barriers  to  the free movement  of  services  and  to  detect  the  need  for  any 
Community action. 

With regard to the principle of subsidiarity  set out in the second paragraph of Article 3b 
of the Treaty, the subsidiarity test may be summed up as follows: 

What are the objectives of the proposed action in relation to the obligations imposed on 
the Community? 

The  objective  is  to  make  a  practical  reality  of  the  fundamental  freedoms  of  the 
Internal  Market  as  defined  in  Article 7a  of  the  Treaty,  that  is,  to  ensure  the  free 
movement  of services and the freedom  of establishment,  while preventing  the rules 
that will be adopted, in future  at national level with a view to regulating  Information 
Society services, from impairing them. 

Does  the proposed  action fall  within  an  exclusive competence of  the  Community or 
within a competence shared with the Member States? 

38 

The  proposed  action  falls  within  an  exclusive  competence  of  the  Community 
(Article 7a). 

What  means  of  action  does  the  Community have  at  its  disposal (recommendation, 
financial support,  legislation,  mutual recognition,  etc.)? 

Directive  for  the  co-ordination  of  laws  (Article 57(2))  or  measures  for  the 
approximation of laws (Article 100a). 

Is a uniform set of rules necessary,  or would a Directive imposing general objectives and 
leaving the task of implementation to the Member States be sufficient? 

The  purpose  of  the  proposed  initiative  is  not  to  harmonise  the  Member States' 
substantive  law, but  merely  to  lay  down  an  information  procedure  coupled  with  a 
procedure  aimed  at co-ordinating  future  rules and regulations, so as to  improve  the 
application of Articles 52 and 59 of the Treaty and to identify  more clearly any need 
for Community action. 

39 

TV. PROPOSAT, FOR  A nmFrTWF, 

Proposal for a European Parliament and Council Directive 
amending for the third time Directive 83/189/EEC laying down 
a procedure for the provision of information in the field of 
technical standards and regulations 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Articles  100a and 213 thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the Economic and Social Committee, 

Acting in accordance  with the procedure referred  to in Article  189b of the Treaty, 

1.  Whereas,  in  order  to  promote  the  smooth  functioning  of  the  Internal  Market,  as  much 
transparency  as  possible  should  be  ensured  as  regards  the  future  national  rules  and 
regulations 
amending 
that  will 
Directive  83/189/EEC; 

Information  Society 

services  by 

apply 

to 

2.  Whereas a wide variety of services within the meaning of Articles 59 and 60 of the Treaty 
will benefit  from  the opportunities afforded  by the Information  Society  for  being  provided 
at a distance, electronically and on the individual request of a service receiver; 

3.  Whereas  the  area  without  internal  frontiers  of  which  the  Internal  Market  consists  enables 
the  providers  of  such  services  to  develop  their  cross-border  activities  with  a  view  to 
increasing  their  competitiveness,  and  thus  affords  ordinary  citizens  new  opportunities  for 
transmitting  and  receiving  information  regardless  of  frontiers,  and  consumers  new  forms 
of access to goods or services; 

4.  Whereas  the  various  social,  societal  and  cultural  implications  of  the  advent  of  the 
Information  Society  may  require  account  to  be  taken  of  the  specificity  of  the  content  of 
such services; 

5.  Whereas  the  European  Council  has  stressed  the  need  to  create  a  clear  and  stable  legal 
framework  at  Community  level  in  order  to  foster  the  development  of  the  Information 
Society;  whereas  Community  law  and  the  rules  governing  the  Internal  Market  in 
particular,  including both the principles enshrined  in the Treaty  and  secondary  legislation, 
already  constitute a basic legal framework  for the growth of such services; 

6.  Whereas the current national rules and regulations applicable to existing  services will have 
to be  adapted  to  take  account  of the new  Information  Society  services,  either  with  a view 
to ensuring  that the general  interest  is better  safeguarded  or,  on the  contrary,  with  a view 
to  simplifying  them  where  their  application  is  disproportionate  to  the  objectives  they 
pursue; 

7.  Whereas,  without co-ordination  at Community  level, this foreseeable  regulatory  activity at 
national level might result in restrictions to the free  movement of services and the  freedom 
of  establishment, 
the  Internal  Market, 
leading 
overregulation and regulatory  inconsistencies; 

in  turn  to  a  refragmentation  of 

40 

8.  Whereas,  in order  to ensure real and effective  protection  of the general  interest  objectives 
which play  a part  in the development  of the Information  Society,  there  is a need  for  a co 
ordinated  approach  at  Community  level  when dealing  with  questions  relating  to  activities 
with such highly transnational connotations as the new services have; 

8.bis.  Whereas  there  already  exists  Community harmonisation  for  telecommunication  sen/ices 
to  account  for 

legislation  foresees  adaptations 

that  the  existing  Community 

and 
technological developments.and the supply of new services; 

9.  Whereas,  for  the  other  less  well-knovvn  fio'  "  of  the  Information  Society  it  would  be 
premature, however,  to co-ordinate such rules  ,ni regulations, by means of as  extensive CT 
exhaustive  harmonisation  at  Commiurty  level  cf  uie  substantive  law,  given,  first,  that 
neither  the  form  the  new  services  win  take  nc:  txo'jt nature  is  sufficiently  well  known. 
secondly,  that  there  is  as yet  at national  level  no specific  regulatory  activity  in'this  field, 
and, thirdly,  that the need for  and content of such harra.onisa.tion in the light of the Internal 
Market cannot be defined  at this stage; 

10.  Whereas  it  is  therefore  necessary  to  preserve  the  smooth  functioning  of  the  area  without 
internal frontiers  and to avert the risks of refragmentation  by providing  for  a procedure  for 
the provision  of  information,  the holding  of consultations,  and  administrative  co-operation 
in respect of  the new draft  rules and  regulations; whereas  such a procedure  will  contribute 
inter alia to ensure  that  the Treaty,  in particular  Articles 52 and  59 thereof,  is  effectively 
applied,  and,  where  appropriate,  to  detect  the  need  to  safeguard  the  general  interest  at 
Community  level;  whereas,  moreover,  the  improved  application  of  the  Treaty  made 
possible  by  such  an  information  procedure  will  have  the  effect  of  reducing  the  need  for 
Community  rules  to  that  which  is  strictly  necessary  and  proportional  in  the  light  of  the 
Internal  Market  and  of the protection of general  interest objectives;  whereas,  lastly,  such a. 
procedure  will  enable  businesses  to  exploit  the  advantages  of  the  Internal  Market  more 
effectively; 

11.  Whereas  Council  Directive 83/189/EEC  of  28 March  1983  laying  down  a  procedure  for 
the provision  of  information  in the field  of technical  standards  and  regulations  pursues  the 
same  objectives;  whereas  this  procedure  is  effective,  being  the  most  comprehensive  one 
for  attaining these objectives; whereas the experience that has been gained in implementing 
the  Directive  and  the  procedures  provided  for  therein  can  be  applied  to  draft  rules  on 
Information  Society  services;  whereas  the procedure  it  lays down  is now  well  established 
among national authorities; 

12.  Whereas,  moreover,  in  accordance  with  Article 7a  of  the  Treaty,  the  Internal  Market 
comprises an area without internal frontiers  in which the free movement of goods, persons, 
services  and  capital  is  ensured;  whereas  Directive 83/189/EEC  provides  only  for  an 
administrative co-operation procedure and not for any harmonisation of substantive rules; 

13.  Whereas,  therefore,  amendment  of  Directive 83/189/EEC  with  a  view  to  applying  it  to 
draft  rules  and  regulations  on  Information  Society  services  is  the  approach  best  suited  to 
meeting  effectively  the  need  for  transparency  in  the  Internal  Market  as  far  as  the  legal 
framework  for  Information  Society services is concerned; 

14.  Whereas,  in view of the diversity of Information  Society services and  their  future  growth, 
notification  should  be provided  for  only  in the case of  rules  which  are  likely  to  evolve  in 
future;  whereas the services which are likely to necessitate and generate the largest  number 
of new rules and regulations are those which are provided at a distance, electronically,  and 

41 

on  the  individual  request  of  a  service  receiver;  whereas  provision  must  accordingly  be 
made for the notification of draft rules and regulations relating to such services; 

15.  Whereas specific  rules  on the taking-up and pursuit of service activities which  are  capable 
of  being  carried  on  in  the  manner  described  above  should  thus  be  communicated  even 
where  they  are  included  in  a  set  of  rules  and  regulations  with  a  more  general  purpose; 
whereas,  however,  general  rules  which  do  not  contain  any  specific  provision  concerning 
such services should not be  notified; 

16.  Whereas  "rules on the taking-up and pursuit of service activities" means rules laying down 
any form  of  requirement,  such as those  relating  to service providers,  services  and  service 
receivers  and  to  an  economic  activity  capable  of  being  provided  electronically,  at  a 
distance and on the  individual  request of the service receiver;  whereas,  for  example,  rules 
on the establishment  of  service providers,  in particular  those on authorisation  or  licensing 
arrangements,  are  thus  covered;  whereas  shall  be  considered  as  such  a  rule  a  provision 
specifically  aimed  at  Information  Society  services  even  if  part  of  a  more  general 
regulation; 

17.  Whereas  this  Directive  is  without  prejudice  to  the  scope  of  Council  Directive  89/552/EC 
on  the  co-ordination  of  certain  provisions  laid  down by  law,  regulation  or  administrative 
action in Member States concerning the pursuit of television broadcasting  activities such as 
modified  by directive  96/.../EC  of the  European Parliament  and the Council  or  any  future 
modification of that directive ; 

18.  Whereas this Directive  is without prejudice  to the negotiations concerning  and  the  content 
of the proposal  for  a European Parliament and Council Directive on a common  framework 
for general authorisations and individual licences for telecommunications services; 

19.  Whereas, at all events, this Directive does not cover the drafts  of national provisions aimed 
at  implementing  the  content  of  Community  Directives  in  force  or  awaiting  adoption 
inasmuch  as  they  already  form  the  subject-matter  of  a  specific  examination;  whereas  it 
accordingly  does  not  cover  either  national  rules  and  regulations  implementing  theCouncil 
Directive  89/552/EC  amending  the  above-mentioned  Directive 89/552/EEC  on  the  co 
ordination  of  certain  provisions  laid  down  by  law,  regulation  or  administrative  action  in 
such  as 
Member States  concerning  the  pursuit  of  television  broadcasting  activities 
modified  by directive 96/.../EC  of the European Parliament  and the Council  or  any  future 
modification  of  that  directive  or  national  rules  and  regulations  implementing  the  future 
Directive  on  a  common  framework  for  general  authorisations  and  individual  licences  for 
telecommunications  services; 

20.  Whereas  definition  of  the  framework  for  the provision  of  information  and  the  holding  of 
consultations  at  Community  level  as  established  by  this  Directive  is  a precondition  for  a 
co-ordinated  and  effective  participation  by  the  European  Community  in  work  involving 
matters  relating  to  the  regulatory  aspects  of  Information  Society  services 
in  the 
international  context; 

21.  Whereas this Directive seeks to amend  Directive 83/189/EEC,  which  for  its part  (with the 
exception  of  Article 43)  is  based  on  Articles  100a  and  213  of  the  Treaty;  whereas  there 
should be a degree of consistency  in the legal bases used for the same Directive; 

42 

HAVE ADOPTED THIS DIRECTIVE: 

Article 1 
Directive 83/189/EEC is amended as follows: 
1.  The title of the Directive is replaced by the following: 

European  Parliament and Council Directive laying down a procedure for  the provision of 
information  in the field of technical standards and regulations and of rules on  Information 
Society services. 

2.  Article 1 is amended as follows: 

(a) 

a new point is added after point  1 : 
2.  "service",  any service provided at a distance,  by electronic  means and  on the. 
individual requestof a service receiver: 

(b) 

points 2 and 3 become points 3 and 4 respectively; 

(c) 

a new point 5 is added: 
5.  "rule on  services",  a  requirement relating to  the  taking-up  and  pursuit  of 
service  activities within  the  meaning  of point 2  of  this Article,  and  in  particular 
provisions concerning  the service provider, the services and the service receiver, to 
the  exclusion  of  any  rules  that  are not  specifically  aimed at the  services defined 
within this same point: 

(d) 

points 4 to  10 become points 6 to 12; 

(e) 

the first paragraph of point 9 (new point  11) is replaced by the following: 
"technical regulation ", technical specifications and other requirements  or a rule on 
sendees,  including the relevant administrative provisions, the observance of which 
is  compulsory,  de jure  or  de facto, 
in  the  case  of  marketing,  provision. 
establishment of  a  service  operator  or  use  in  a  Member State  or  a  major  part 
thereof,  as well as' laws, regulations or administrative provisions of Member States, 
except those provided for  in Article 10, prohibiting the manufacture, importation, 
marketing or  use  of a product  or prohibiting the provision or  use  of  a  service or 

De facto  technical regulations include: 

laws,  regulations or  administrative provisions of a  Member State  which refer 
either to technical specifications  or other requirements  or rules on services, or 
to  professional  codes  or  codes  of practice  which in  turn  refer  to  technical 
specifications or other requirements  or rules on services and  compliance with 
which confers a presumption of conformity  with the obligations  imposed by the 
aforementioned laws, regulations or administrative provisions, 

voluntary agreements to  which a public  authority is  a  contracting  party  and 
which  provide, 
in  the  general  interest,  for  compliance  with  technical 
specifications.or  other  requirements or  rules  on  services,  excluding  public 
procurement tender specifications; 

technical  specifications  or  other  requirements which  are  linked  to  fiscal  or 
financial  measures  affecting  the  consumption  of  products  or  services  by 
encouraging  compliance  with  such 
technical  specifications  or  other 
requirements  or  rules  on  services:  technical  specifications  or  other 

43 

requirements nr rules on services linked to national social-security systems are 
not included. ~ 

(f) 

point 10 (new point 12) is replaced by the following: 

12.  "draft technical  regulation",  the  text  of  a  technical specification  or  other 
requirement or of a rule on services, including administrative provisions formulated 
with  the  aim  of  enacting  it  or  of  ultimately  having  it  enacted  as  a  technical 
regulation, the text being at a stage of preparation at which substantial amendments 
can still be made. 

3.  The last subparagraph of Article 8(1) is replaced by the following: 

With  respect  to  the  technical specifications  or  other  requirements or  rules  on  services 
referred to in the third indent of the second paragraph of point  11 of Article 1, the detailed 
comments or  opinions  of  the  Commission or  the  Member States may  concern  only  the 
aspect  which  may  hinder  trade  or  the free  movement of  services and  not  the  fiscal  or 
financial aspect of the measure. 

4.  Article 9 is modified  as follows 

a) The first  paragraph of point 2 is replaced by the  following: 
Member States shall postpone: 

for  four  months  the  adoption  of  a  draft  technical  regulation  in  the form  of  a 
voluntary  agreement  within 
the 
the  meaning  of 
second paragraph ofpmDLlL  of Article 1, 
without prejudice to paragraphs 3,  4 and 5, for  six months the adoption of any other 
draft technical regulation, 

the  second indent  of 

from  the date of receipt by the Commission of the communication referred to in Article 8(1) 
if  the  Commission  or  another  Member State  delivers  a  detailed opinion,  within 
three months of that date, to the effect that the measure envisaged may create obstacles to 
the  free  movement of  goods  or  services  or  to  the freedom  of  establishment  of operators 
within the Internal Market. 
b) point 7 is replaced with the following t&xt: 
Paragraphs 1 to 5 shall not apply in those cases where, for  urgent reasons, occasioned by 
serious  and  unforeseeable circumstances,  relating to  the protection  of public  health  or 
safety,  the protection  of  animals or  the preservation of plants,  and for  rules  relating  to 
services also for  public  order, a Member State is obliged to prepare  technical  regulations 
in a very short space of time in order to enact and introduce them immediately  without any 
consultations  being possible.  The Member State shall give,  in the communication  referred 
to  in  Article  8,  the  reasons  which  warrant  the  urgency  of  the  measures  taken.  The 
Commission  shall give  its  views on  the  communication  as soon as possible.  It  shall  take 
appropriate action in cases where improper use is made of this procedure.  The European 
Parliament shall be kept informed by the Commission. 

5.  Article  10 is amended as follows: 

(a) 

the first and second indents of paragraph 1 are replaced by the following: 
comply  with  binding  Community  acts  which  result  in  the  adoption  of  technical 
specifications or rules on services: 
fulfil  the  obligations arising  out  of  international agreements which  result  in  the 
adoption of common technical specifications or rules on services in the Community; 

44 

(b) 

the sixth indent of paragraph  1 is replaced by the following: 

restrict  themselves to  amending a  technical  regulation within  the  meaning of 
point 11 of Article 1  of this Directive,  in accordance with a  Commission  request, 
with a view to removing an obstacle to trade or the free movement of services; 

(c) 

(d) 
4. 

in  paragraphs 3  and  4  the  reference  to  Article  1(9)  is  replaced  by:  point  11  of 
Article 1; 

paragraph 4 is amended as follows: 
Article 9 shall not apply to the technical specifications or other requirements  or the 
rules on services referred to in the third indent of the second paragraph of point 11 
of Article 1. 

1.  Member States  shall  bring  into  force  the  regulations  and  administrative  provisions 
necessary to comply with this Directive by 31/12/97. at the latest.  They shall forthwith  inform 
the Commission thereof. 

When Member States adopt these provisions, they shall contain a reference  to this Directive or 
shall be accompanied by such reference  at the time of their official  publication.  The procedure 
for such reference  shall be adopted  by Member States. 

2.  Member States shall commumcate the main provisions of national law which they adopt  in 
the field covered by this Directive to the Commission. 

Article 3 
This Directive is addressed to the Member States. 

Done at Brussels, 

45 

FINANCIAL {STATEMENT 

1. 

TITLE OF OPERATION 

Proposal for a European Parliament  and Council Directive amending for the third 
time  Directive 83/189/EEC  laying  down  a  procedure  for  the  provision  of 
information in the field of technical standards and regulations 

2. 

BUDGET HEADING INVOLVED 

A2510: Committees whose consultation is compulsory. 

3. 

LEGAL BASIS 

Proposal  for  a European  Parliament  and  Council Directive  amending  for  the  third 
time  Directive 83/189/EEC 
the  provision  of 
laying  down  a  procedure  for 
information in the field of technical standards and regulations 

4. 

DESCRIPTION OF OPERATION 

4.1  General objective 

The proposal for a directive is designed to introduce a procedure for the supply of 
information  and  administrative  cooperation  between  national  and  Community 
authorities  regarding  rules  and  regulations  on  Information  Society  services.  In 
particular,  each Member State would  be required  to  notify  the  Commission  and 
the  other  Member States  of  draft  national  rules  and  regulations  relating  to  such 
services.  They  would  enter  into  force  only  after  a  minimum  three-month 
standstill  period  had elapsed  in which  checks would  be  made to  ensure that  the 
draft legislation was consistent and compatible with existing Community law, and 
in particular with internal market rules. 

4.2 

Period covered and arrangements for renewal 

The  Committee  set  up  under  Articles 5  and  6  of  Directive 83/189/EEC  could 
begin  to  carry  out  these  tasks  relating  to  Information  Society  services 
immediately  after  the  adoption  of the above-mentioned  proposal  (possibly  from 
1997) in order to facilitate, first, its transposai and, second, its operation. 

5. 

CLASSIFICATION OF EXPENDITURE 

5.1 
5.2 

Non-compulsory expenditure 
Non-differentiated  appropriations 

^ 

6. 

TYPE OF EXPENDITURE 

6.1 

Type of expenditure 

Refund  of  travel  and  living  expenses  incurred  by  members  of  the  Standing 
Committee  on  Technical  Standards  and  Regulations  (committee  03C0210)  in 
the 
attending  additional  meetings  necessitated  by 
above-mentioned proposal for a directive. 

the  adoption  of 

7. 

FINANCIAL IMPACT (on Part B) 

None 

8. 

FRAUD PREVENTION  MEASURES 

Refund  applications will be checked by the Committee's secretariat in DG XV. 

9. 

ELEMENTS OF COST-EFFECTIVENESS ANALYSIS 

9.1 

Specific and quantifiable objectives; target population 

The  aim  of  the  proposal  is  to  safeguard  and  facilitate  the  functioning  of  the  internal 
market  by  forestalling  the  adoption  of  rules  and  regulations  that  are  inconsistent  and 
incompatible with internal market freedoms.  Any refragmentation  of the internal market 
would  compromise  the  economic  growth  of  the  on-line  services  sector  which  is 
expanding  rapidly  (the  number  of  Internet  users  worldwide 
is  increasing  by 
approximately  1  million a year). 

There  will  be  investment  in  the  new  services  sector  if  development  prospects  at 
Community  level  are  assured;  legally  fragmented  national  markets  would  not  be 
sufficiently  profitable to sustain investment programmes. 

9.2  Grounds for the operation 

This initiative relates to the operation of the internal  market, for  which the  Community 
has sole responsibility; subsidiarity is not therefore applicable in this case. 

The proposal does not provide for harmonization or lay down rules of substantive law. 

It  simply  contains  procedural  rules,  making  use  of  the  committee  which  is  already 
operating under the Directive to be amended (83/189/EEC) and which has already proved 
its worth for more than a decade. 

Given the many legislative initiatives currently under preparation in the Member States to 
help  meet  the  needs  arising  from  the  advent  of the  Information  Society,  a  coordinated 
Community  approach  to  the  new  services,  which  are  by  definition  cross-frontier  in 
nature, is necessary both in order to safeguard the development of this economic sector in 
the internal market and to provide more effective  protection for pertinent general interests 
(such as the protection of minors, consumers, public morality, etc.) 

Furthermore,  the  non-confidential  nature  of  the  information  to  be  notified  under  the 
Directive also takes account of the desire of economic operators in the sector to express 
their  views  on  future  legislative  initiatives  within  a  regulatory  framework  that  is 
sufficiently  transparent,  consistent  and  stable  for  them  to  carry  out  and  develop  their 
activities. 

Finally, failure to introduce the proposed mechanism could pose a problem as regards the 
internal  resources  the  Commission  would  require  to  administer  any  infringement 
proceedings  brought  in respect  of future  national  legislation that was incompatible  with 
Community law. 

9.3  Monitoring and evaluation of the operation 

Article 3 of  the  Directive  provides  for  the  Commission  to report to  Parliament  and  the 
Economic and Social Committee every two years on the results of applying the Directive. 
Any proposals for adjusting the proposed system could be put forward then. 

10.  ADMINISTRATIVE  EXPENDITURE  (PART A OF SECTION III  OF  THE 

GENERAL  BUDGET) 

Actual  mobilization  of  the  necessary  administrative  resources  will  result  from  the 
Commission's annual decision on the allocation of resources, which depends in particular 
on the additional staff and appropriations earmarked by the budgetary authority. 

10.1 

Impact on the number of posts 

Type of post 

Staff  to be assigned to 
the administration of the 
operation 

permanent 
posts 

temporary 
posts 

Officials  or 
temporary  staff 

Other resources 
Total 

A 
B 
C 

1 
1 

2 

of which 

duration 

use of 
additional 
resources 

use of existing 
resources within the 
DG or department 
concerned 
1 
1 

indefinite 
indefinite 

2 

10.2  Overall financial  impact of the additional human resources 

Not applicable 

Officials 
Temporary staff 
Other resources 

I—™ 

""••'•'••-•~-1H--, l , ,«,r1''-''"-—T^ 

Amounts 

Method of calculation 

Total 

V* 

""II 

ITU  ^ • f n ^lT r^*, ! i ^^ ^ ^ ^ 1 r^^ * * ^, ^'l  -Ul  l 1'  ' — - ^— 

1111—I  I I 111 • I  — ^ — ^ - » ^ » - ^ — • _-  ] _. EEl..LAM<mm 

10.3 

Increase in other administrative expenditure arising from the operation 

Budget heading 
(No and title) 
A2510 
committees whose consultation is 
compulsory 

Amounts 

22 000 

I 

Total 

22 000 

Method of calculation  / 

. 

15 experts from the Member States 
attending two additional meetings a year of 
the Standing Committee on Technical 
Standards and Regulations 
2 x ECU 11 000 (average cost)  = 
ECU 22 000 

^9 

ISSN0254-1475 

COM(96) 392 final 

DOCUMENTS 

EN 

15 

i6 

io 

Catalogue number  : CB-CO-96-411-EN-C 

ISBN 92-78-07821-2 

Office for Official Publications of the European Communities 

L-2985 Luxembourg 

r o