Amended proposal for a European Parliament and Council Directive on the legal protection of services based on, or consisting of, conditional access
Date: 1998-05-18
Institutions: European Commission
Subjects: computer piracy, data protection, information technology, payable service, right to justice

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  18.05.1998 

COM(1998) 332  final 

97/0198 (COD) 

Amended proposal for a European Parliament and Council Directive on the Legal 
Protection of Services based on, or consisting of,  Conditional  Access 

(presented by the Commission pursuant to Article  189 a (2) 
of the EC-Treaty) 

EXPLANATORY  MEMORANDUM 

1. The initial  proposal 

1. 1 Content 

Following  the  publication  of  the  Green  Paper  on  the  Legal  Protection  of  encrypted 
services  which  has  launched  a  wide  consultation  process  in  1996,  and  the  Resolution 
adopted  by  the  European  Parliament  on  13  May  1997,  the  Proposal  for  a  European 
Parliament  and  Council  Directive  on  the  Legal  Protection  of  Services  based  on,  or 
consisting of,  Conditional  Access, was adopted  by the Commission  on 9 July  1997. 

This  proposal  aims  at  ensuring  an  adequate  level  of  legal  protection  to  television  and 
radio  broadcasting  and 
that  are  provided  against 
remuneration  and on the basis of conditional  access. 

information  society  services 

The  proposed  Directive  will  require  Member  States  to  prohibit  and  provide  appropriate 
sanctions against a wide range of commercial  piracy activities that relate to illicit (pirate) 
decoders, smart  cards  and  software  which  allow  the circumvention  of conditional  access 
systems and the receipt of a service  free  of charge. 

The proposed protection  is  limited  to commercial  piracy activities against services which 
use conditional access techniques to ensure their remuneration. 

•  Protected  service  is defined  under  Article  la)  as a television  or radio  broadcasting  or 
information  society  service  as well  as the provision  of conditional  access  as a  service 
in its own  right. Consequently,  the proposal  does not only  cover services  such as pay-
television, or pay-radio  but also services such as video-on-demand,  music-on-demand, 
electronic  publishing  and  a  wide  range  of  other  on-line  services.  However  to  be 
covered by the proposal these services need to be offered  under two conditions: 

- they must be provided on the basis of a conditional  access device which is defined  as 
any equipment or software  designed  or adapted  to give access to a protected  service in 
an intelligible  form 

- the use of conditional  access must aim be to ensure the remuneration of the service. 

•  Infringing  activities  listed  under  Article  3  envisage  solely  commercial  activities 
related to  illicit devices, the  latter being defined  as equipment  or software  designed  or 
adapted  to  give  unauthorised  access  to  a  protected  service,  As  a  matter  of 
proportionality  and  subsidiarity,  it  is  left  to  the  Member  States  to  take  measures 
against the private possession and use of illicit devices. 

^ 

1.2 Institutional  procedure: 

The Commission adopted the proposal  for a Directive on 9 July  19971. 

The proposal  was transmitted  to the European  Parliament, the Council  and the  Economic 
and Social Committee on 22 September  1997. 

The Economic and Social Committee adopted  its opinion on 25 February  1998. 

On  30 April  1998, the  European  Parliament  adopted,  on  first  reading  and  in  accordance 
with the  codecision  procedure  (Article  189b), a  legislative  resolution  approving,  subject 
to  amendments  contained  in  this  resolution,  the  Commission's  proposal  and  calling  on 
the Commission to alter its proposal  accordingly. 

2. The amended  proposal 

2.1 The European  Parliament's  amendments 

The  initial  proposal  has  been  amended  to  incorporate  those  amendments  -which  are 
acceptable  for  the  Commission.  In  this  respect,  the  Commission  has  accepted  as  many 
amendments  as possible to take account  of the European  Parliament's  aim  to clarify  and 
strengthen the proposal.  Accordingly,  amendments  1, 2, 3, 4, 6, 7, 8,  10,  12,  13, 14, 15, 
16,  17,  19, 23, 24 and 25, which are designed  to clarify  the initial  text  and to  strengthen 
the objectives  of the Directive, have been incorporated  into the amended  proposal, either 
in their integrity or at least in spirit. 

However, the Commission  is unable to accept: 

-  Amendments  5  and  20  which  go  beyond  the  objectives  of  the  Directive  by 

extending its scope of application. 

-  Amendments  9,  11,  18, 21, 22 and  part  of  23,  which  are  not  entirely  clear  and 

could create legal  insecurity. 

Com (97) 356 final published  in the OJ n° C314 of  16.10.1997 

2.2  The amendments incorporated  in the proposal 

The  Commission's  amended  proposal  is  set  out  in  the  right  hand  column,  with  the 
amendments to the initial proposal  underlined. 

For  ease  of  understanding  and  comparison,  the  left-hand  column  shows  the  wording  of 
the Commission's  initial proposal. Only amended Recitals and Articles figure on this list. 

Recital 2 fully  incorporates Parliament's amendment  1. 

Recital  3  adopts  Parliament's  amendment  2  in  spirit  but  replaces  the  text  by  the  exact 
wording of the Treaty 

Recital 3 a) new corresponds exactly to Parliament's amendment 3 

Recital 3 b) new corresponds exactly to Parliament's amendment 4 

Recital 5b) new corresponds exactly to Parliament's amendment 25 

Recital 6 corresponds exactly to Parliament's amendment 6 

Recital  8 a) new adopts Parliament's amendment  7 in spirit but adds the words  "possible 
future" before  Community  or national provisions since no such legislation exists so far 

Recital 8 b) corresponds exactly to Parliament's amendment 8 

Recital  10 a)  adopts  partially  Parliament's  amendment  23  but  in  the  more  appropriate 
format  of a recital instead of an addition to Article 3c 

Recital  10 b) adopts Parliament's amendment  10 but replaces the words "legally provided 
service", a notion which  is not defined  in the Directive by "protected  service" as  defined 
in Article  1 a) 

Recital  13 a) corresponds exactly to Parliament's amendment  12 

Recital  14 a) new corresponds exactly to Parliament's amendment  13 

Recital  14 b)  new  adopts  Parliament's  amendment  14 in  spirit  without  the  quote  of  the 
Commission's  Communication  on  the  role  of  penalties  in  implementing  Community 
Internal Market  legislation 

Recital  15 corresponds exactly to Parliament's amendment  15 

Recital  15 a)  new  adopts  Parliament's  amendment  16 but  replaces  the  word  "right"  by 
"ability" because legally speaking viewers do not have such a "right" of access 

Recital  16 a), corresponds exactly to Parliament's amendment  17 

Article  1  a) corresponds exactly to Parliament's amendment  19 

Article 4.2  also corresponds exactly to Parliament's amendment 24 

i 

Amended proposal for a European Parliament and Council Directive on the Legal 
Protection of Services based on, or consisting of,  Conditional  Access 

Initial  Proposal 

Amended  Proposal 

Recital 2: 

Whereas  the  cross-border  provision  of 
broadcasting  and 
Information  Society 
services  may  contribute  significantly  to 
the achievement of these objectives; 

Recital 3: 

services, 

Whereas  the  Treaty  provides  for  the  free 
movement  of all  services  provided  against 
this  right,  as 
;  whereas 
remuneration 
applied  to  broadcasting  and  Information 
specific 
Society 
law  of  a 
manifestation 
the 
more  general  principle,  namely 
freedom  of  expression  as  enshrined  in 
Article  10 of the European  Convention  for 
the  Protection  of  Human  Rights  and 
Fundamental Freedoms; 

in  Community 

is  also  a 

Recital 3a) new 

and 

the  cross-border  provision  of 
Whereas 
broadcasting 
Society 
Information 
services may contribute, from  the  individual 
point  of  view,  to  the  full  effectiveness  of 
freedom  of  expression  as  a  fundamental 
right and,  from  the collective  point  of view, 
to  the  achievement  of  the 
significantly 
objectives laid down in the Treaty 

Whereas  the  Treaty  provides  for  the  free 
movement  of  services  which  are  normally 
provided  for  remuneration  ;  whereas  this 
to  broadcasting  and 
right,  as  applied 
Information  Society  services, 
is  also  a 
specific  manifestation  in Community  law of 
the 
a  more  general  principle,  namely 
freedom  of  expression  as  enshrined 
in 
Article  10  of  the  European  Convention  for 
the  Protection  of  Human  Rights  and 
this 
Fundamental  Freedoms;  whereas 
Article explicitly  recognises  the right  of the 
citizens  to  receive  and  impart  information 
regardless  of  frontiers  and  whereas  any 
restriction  of  that  right  must  be  based  on 
due  consideration  of  other 
legitimate 
interests deserving of legal  protection; 

Whereas  conditional  access  systems  should 
not  be used  for the  sole  purpose  of  refusing 
in  some  Member 
access  for  consumers 
States to  services  which  are  freely  available 
in other Member States, 

X 

Recital 3 b) new 

Recital 5b) new 

Recital 6 

this  Directive 

Whereas 
should  grant 
protection  against  illicit  (pirated)  devices 
i.e. devices  which are explicitly  designed  or 
unauthorised 
technically 
reception; 

adapted 

for 

Whereas  the  encryption  of  broadcasting 
not 
services 
inconsiderately  deprive  the  average  viewer 
of 
they  were 
orginally available without charge; 

services 

these 

must 

if 

choice 

increase 

Whereas 
the  opportunities  offered  by 
digital  technologies  provide  the  potential 
and 
consumer 
to 
to  cultural  pluralism,  by 
contributing 
developing  an  even  wider 
range  of 
services within the meaning  of Articles  59 
and  60 of the Treaty; whereas the  viability 
of those  services  will  often  depend  on  the 
use  of  Conditional  Access  in  order  to 
obtain  the  remuneration  of  the  service 
provider; 

the  potential 

Whereas the opportunities  offered  by digital 
technologies  provide 
to 
increase  consumer  choice  and  contribute  to 
cultural  pluralism,  by  developing  an  even 
wider  range  of  services  within  the  meaning 
of Articles  59 and 60 of the Treaty; whereas 
the  viability  of  these  services  will  often 
depend on the use of Conditional  Access  in 
order  to  ensure  remuneration  of  the  service 
legal 
provider;  whereas  accordingly 
protection  of service providers against  illicit 
devices which allow access to these services 
free  of  charge  seems  necessary  in  order  to 
ensure the economic viability of the services 

the 

Recital 8 a) new 

Recital 8 b) new 

Whereas  this  Directive  is  without  prejudice 
of  possible  future  Community  or  national 
provisions  meant to ensure  that a number of 
broadcasting  services,  recognised  as  being 
of  public 
interest,  are  not  based  on 
conditional  access; 

Whereas  this  Directive  is  without  prejudice 
of 
further 
Community  action concerning new services, 

the  cultural  aspects  of  any 

£ 

Recital  10 a) new 

Recital  10 b) new 

Recital  13 a) new 

Recital  14 a) new 

Recital  14 b) new 

Whereas these commercial activities which 
concern  illicit devices include commercial 
communications covering all forms of 
advertising, sponsorship, sales promotion 
and public relations promoting such 
products and services; 

Whereas it seems necessary  to ensure that 
Member States shall provide adequate legal 
protection against any individual or group 
using an illicit device for direct or indirect 
profit,  knowingly or with  reasonable 
grounds to know that they will enable or 
facilitate  without authority the 
circumvention  of any  effective, 
technological  measure designed to protect 
the remuneration of a protected  service 

and 

sanctions 

the 
for  under 

remedies 
Whereas 
provided 
this  Directive  are 
without  prejudice  to  any  other  sanction  or 
remedy  for  which  provisions  may  be  made 
law,  such  as  preventive 
under  national 
measures  in  general  or  seizure  of  illicit 
devices; 

Whereas in accordance  with Article  5 of the 
Treaty,  the  Member  States  are  required  to 
take all measures necessary  to guarantee the 
application  and effectiveness  of  Community 
law,  in  particular  by  making  the  penalty 
chosen 
and 
dissuasive, 

proportionate 

effective, 

Whereas when adopting the provisions laid 
out by this Directive, Member States should 
be in accordance with the  Communication 
from  the Commission to the Council and the 
European Parliament on the role of penalties 
in implementing  Community  Internal 
Market  legislation; 

} 

Recital  15: 

Whereas  this  Directive  should  be  without 
prejudice  to  the  application  of  national 
provisions which may  prohibit  the private 
possession  of  illicit  devices;  whereas  this 
Directive 
the 
is  without  prejudice 
application  of  Community  competition 
rules;  whereas  this  Directive  is  without 
prejudice  to the application  of  Community 
rules  concerning 
intellectual  property 
rights 

to 

Recital  15 a) new 

Recital  16 a) new 

Whereas  this  Directive  is  without  prejudice 
to any  measures  by  Member  States  seeking 
to  prohibit  the  private  possession  of  illicit 
devices;  whereas  this  Directive  is  without 
prejudice 
the 
Community  competition  rules; whereas  this 
Directive 
the 
is  without  prejudice 
application  of  Community  rules  concerning 
intellectual property rights 

application  of 

the 

to 

to 

Whereas this Directive is without  prejudice 
to the ability of the viewer to have access to 
free-to-air  channels within a conditional 
access service platform  without being 
required to pay an additional  fee beyond the 
normal charge for accessing the  platform; 

Whereas a balance must be secured between 
the interest of the service providers and 
copyright holders to be remunerated  for 
their services (by encryption) on the one 
hand and the interest of the general public 
not to be excluded more and more  from 
information  and cultural events; 

Article  1  a): 

....or  the  provision  of  conditional  access  This  term  also  covers  the  provision  of 
conditional  access  to  the  above  services, 
to the above service in its own right 
considered  as a service  in its own right. 

Article 4.2 

take 

shall 

the 
Each  Member  State 
measures  necessary  to  ensure  that  service 
providers,  whose  interests  are  affected  by 
an  infringing  activity  carried  out  on  its 
territory,  can  bring  an  action  for  damages 
and/  apply  for  an  injunction  and,  where 
appropriate,  for 
illicit 
devices 

the  seizure  of 

that 

Each  Member  State  shall  take  the  measures 
necessary,  pursuant  to  its  legislation,  to 
service  providers,  whose 
ensure 
infringing 
interests  are  affected  by  an 
activity carried out on its territory, can bring 
an  action  for  damages  and/  apply  for  an 
injunction  and,  where  appropriate,  for  the 
seizure of illicit devices 

g 

ISSN 0254-1475 

COM(98) 332  final 

DOCUMENTS 

EN 

10  09  01  06 

Catalogue number  :  CB-CO-98-339-EN-C 

ISBN  92-78-36473-8 

Office  for Official  Publications of the European  Communities 

L-2985 Luxembourg 

J