Opinion of the Economic and Social Committee on the 'Proposal for a European Parliament and Council Directive on the legal protection of services based on, or consisting of, conditional access'
Date: 1998-02-25
Institutions: European Economic and Social Committee
Subjects: approximation of laws, audiovisual piracy, broadcasting, pay television, right to justice

C 129/16

EN

Official Journal of the European Communities

27.4.98

Opinion of the Economic and Social Committee on the ‘Proposal for a European Parliament
and Council Directive on the legal protection of services based on, or consisting of, conditional
access’ (1)

(98/C 129/04)

On 20 October 1997, the Council decided to consult the Economic and Social Committee,
under Article 198 of the Treaty establishing the European Community, on the above-mentioned
proposal.

The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 6 February 1998. The rapporteur
was Mr Herna´ndez Bataller.

At its 352nd plenary session held on 25 and 26 February 1998 (meeting of 25 February), the
Economic and Social Committee adopted the following opinion by 120 votes for, with no
votes against and two abstentions.

1.

Introduction

1.1.
This proposal for a directive on the legal protec-
tion of services based on, or consisting of, conditional
access, which the Commission has referred to the
Committee for an opinion,
is a direct outcome of
discussions arising from the debate on the Green Paper
on the legal protection of encrypted services in the
internal market (2).

The Committee adopted an opinion on this green

1.2.
paper on 25 September 1996 (3).

1.3.
The need to ensure legal protection of encrypted
services against illicit receipt had already been estab-
lished in the strategic programme for the internal
market (4) and in the relevant green paper announced in
the Commission communication ‘Europe’s way to the
information society: an action plan’ of 19 June 1994 (5).

1.4. More recently, the Commission communication
‘A European initiative in electronic commerce’ (6) notes
in paragraph 55 that: ‘A secure distribution of services
will require adequate legal protection of conditional
access services across the Single Market. Many services
will use some form of encryption or other conditional
access system to ensure proper remuneration. Service
providers will need to be protected against the piracy of
their services by illicit decoders, smart cards or other
piracy devices.’

An opinion on this communication has already

1.5.
been adopted (CES 1191/97) (7).

(1) OJ C 314, 16.10.1997, p. 7.
(2) COM(96) 76 final.
(3) OJ C 30, 30.1.1997.
(4) COM(93) 632 final.
(5) COM(94) 347 final.
(6) COM(97) 157 final.
(7) OJ C 19, 21.1.1998, p. 72.

In its opinion on the green paper (3) the Com-

1.6.
mittee drew the following conclusions:

1.6.1.
In general it is absolutely essential to encrypt
messages in order to prevent any unauthorized person
from gaining access to them or changing them.

1.6.2.
Effective protective measures must be provided
for in all Member States, and this objective can be
effectively achieved only on the basis of Community
harmonization.

1.6.3.
harmonization is a Council regulation.

The appropriate legal

instrument

for this

1.6.4.
encrypted services.

Its scope should be extended to cover all

1.6.5.
The scope of the harmonization instrument
should include the fully informed possession by private
individuals of unauthorized decoding devices.

1.6.6.
This legal instrument should permit claims for
damages, establish preventive or precautionary civil
measures against specific preparatory activities that
facilitate pirating, and provide for sanctions in the case
of illicit receipt and redistribution of encrypted services.

1.6.7.
The Committee also asked the Commission
its implications at
to address this question and all
international level, particularly in the framework of
bilateral agreements and of WTO activities, and to
establish the right conditions for technical standard-
ization of decoding devices.

2. Evaluation of the Commission’s proposal

2.1. Legal instrument

2.1.1.
The first thing that is apparent from the
Commission’s proposal is that it has opted for a directive
rather than a regulation.

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2.1.1.1.
The Commission considers this option to
ensure an ‘equivalent level of protection’ in different
Member States, leaving to their discretion the ‘means to
achieve such objectives’. Thus the Member States have
been left responsibility for:

a) defining the measures necessary to prohibit on their
territory activities that the proposal for a directive
considers illicit;

b) the sanctions to be imposed on the infringing party,

which must be:

— effective,

— deterrent,

— and proportional to the potential impact of the

infringing activity.

2.2. Scope

2.2.1.
The Directive is limited in scope to services
protected by conditional access, insofar as the purpose
of authorization for access to services is to ensure
payment for the following services:

— ‘television broadcasting’, as defined in Article 1 (a)

of Directive 89/552/EEC (1),

— ‘radio broadcasting’, which includes not just sound
signals but also data signals transmitted via the same
channel.

Neither definition covers the provision of services
on individual demand.

— ‘Information Society services’, defined as ‘any service
provided at a distance, by electronic means and on
the individual request of a service receiver’.

2.3. Purpose of the proposal for a directive

2.3.1.
The purpose of the proposal for a directive is
to prohibit the following activities in the territory of the
European Union:

a)

the manufacture,
commercial purposes of illicit devices.

import, sale or possession for

b) the installation, maintenance or replacement for

commercial purposes of an illicit device.

The term ‘illicit device’ denotes any IT program or
equipment designed or adapted to allow unauthor-
ized access to a protected service.

c)

the use of commercial communications to promote
illicit devices.

(1) OJ L 298, 17.10.1989, p. 23.

2.3.1.1.
‘Commercial communication’ denotes any
type of communication whose aim is to promote the
services, products or image of a company or organization
with end-users or distributors.

2.3.1.2. However,
not defined in Article 1.

‘commercial communication’

is

2.3.2.
manufacture and sale of illicit decoders.

The Commission’s proposal focuses on the

2.3.2.1.

The scope of the proposal does not include:

a) matters relating to unauthorized receipt of any of
the services referred to, or the private possession or
acquisition of any illicit device, unless for commercial
ends;

b) rights relating to the content of information trans-

mitted via illicit devices;

c)

industrial property rights relating to decoders, which
will be covered by another proposal that is in
preparation;

d) finally, matters relating to the protection of privacy
rights and security of commercial transactions,
unless they are based on payment for an encrypted
communication service.

3. General comments

3.1.
The Committee welcomes the Commission’s
proposal for a directive, which takes account of its
opinion on the green paper.

3.2.
The Committee nevertheless feels that given the
current omissions and the distortion of competition
that such omissions produce, the appropriate legal
instrument should be a regulation rather than a directive,
since this would:

— ensure more effective harmonization, since pro-
visions would be directly applicable in the Member
States;

— avoid a long process of transposing the proposed

measures into national law.

3.3.
The scope of the proposed directive should
be extended to include the provision of professional
services, such as telemedicine.

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3.4.
The purpose of Article 2 is to ensure free
circulation of protected services, associated services and
conditional access devices; however, paragraph 2 may
prove to be superfluous, since it merely reiterates
generally applicable and self-evident principles of the
Treaty.

3.5. With respect to infringing activities, it would
make sense to add ‘associated services’ to Article 3 (c),
since these include the installation, maintenance and
replacement of conditional access devices, as well as
the provision of commercial communication services
associated with protected services or devices, or other
associated services.

3.6.
Paragraph 1 of Article 4 could be replaced by a
provision establishing the illicit nature of the activities
described in Article 3.

3.7.
Paragraph 2 of Article 4 should widen the right
to institute proceedings, so that anybody who can prove
a ‘direct interest’ is able to bring an action for damages
or apply to the courts for an injunction.

4. Specific comments

The Committee feels that better protection
4.1.
should be provided for consumers who take out contracts
for conditional access services, especially when it comes
to dealing with: complaints and any compensation
requests; quality of the service and proof thereof; aspects
of payment and possible payment arrangements not
covered by Directive 97/7/EC of 20 May 1997 on the
protection of consumers in respect of distance contracts.

The Committee considers that the introduction
4.2.
of conditional access services in society must in all cases
be accompanied by protection of citizens’ privacy and
confidentiality.

4.3.
Complementary sanctions should be adopted for
customs, similar to those contained in Regulation
(EC) 3295/94 of 22 December 1994, which lays down
measures to prohibit the release for free circulation,
export, re-export or entry for a suspensive procedure of
counterfeit and pirated goods.

3.8.
Article 5 should include an obligation on the
Member States to inform the Commission of the sanction
provisions applicable, since these cannot be incorporated
into the legal transposition texts.

4.3.1.
If sanctions are adopted for customs, it would
make sense to set up a committee in the Commission
similar to the committee provided for in Regulation
(EC) 3295/94 of 22 December 1994.

Brussels, 25 February 1998.

The President

of the Economic and Social Committee

Tom JENKINS