COMMON POSITION (EC) No 43/98 adopted by the Council on 29 June 1998 with a view to the adoption of Directive 98/.../EC of the European Parliament and Council of ... on the legal protection of services based on, or consisting of, conditional access
Date: 1998-06-29
Institutions: Council of the European Union
Subjects: European standard, access to information, pay television, right to justice, technical standard

C  262/34

EN

Official  Journal  of  the  European  Communities

19.8.98

COMMON  POSITION  (EC)  No  43/98

adopted  by  the  Council  on  29  June  1998

with a view to the adoption of Directive 98/. . ./EC of the European Parliament and Council of
. . .  on  the  legal  protection  of  services  based  on,  or  consisting  of,  conditional  access

(98/C  262/03)

THE  EUROPEAN  PARLIAMENT  AND  THE  COUNCIL  OF
THE  EUROPEAN  UNION,

Having  regard  to  the  Treaty  establishing  the  European
Community,  and  in  particular  Articles  57(2),  66  and
100a  thereof,

Having  regard  to  the  proposal  from  the  Commission (1),

Having regard to the Opinion of the Economic and Social
Committee (2),

Acting  in  accordance  with  the  procedure  laid  down  in
Article  189b  of  the  Treaty (3),

1.  Whereas  the  objectives  of  the  Community  as  laid
down  in  the  Treaty  include  creating  an  ever  closer
union  among  the  peoples  of  Europe  and  ensuring
economic  and  social  progress,  by  eliminating  the
barriers  which  divide  them;

2.  Whereas 

the 

provision 

of
cross-border 
broadcasting  and  information  society  services  may
contribute,  from  the  individual  point  of  view,  to
the  full  effectiveness  of  freedom  of  expression  as  a
fundamental right and, from the collective point of
view,  to  the  achievement  of  the  objectives  laid
down  in  the  Treaty;

3.  Whereas 

for 

the 

the  Treaty  provides 

is  also  a  specific  manifestation 

free
movement  of  all  services  which  are  normally
provided  for  remuneration;  whereas  this  right,  as
applied  to  broadcasting  and  information  society
in
services, 
Community  law  of  a  more  general  principle,
namely  freedom  of  expression  as  enshrined  in
Article  10  of  the  European  Convention  for  the
Protection  of  Human  Rights  and  Fundamental
explicitly
Freedoms;  whereas 
recognizes  the  right  of  citizens  to  receive  and

that  Article 

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;

4.  Whereas 

the 

undertook 

a
Commission 
wide-ranging  consultation  based  on  the  Green
Paper  ‘Legal  Protection  of  Encrypted  Services  in
the  Internal  Market’;  whereas  the  results  of  that
consultation  confirmed  the  need  for  a  Community
legal instrument ensuring the legal protection of all
those  services  whose  remuneration  relies  on
conditional access;

5.  Whereas 

in 

its
the  European  Parliament, 
Resolution  of  13  May  1997  on  the  Green
Paper (4),  called  on  the  Commission  to  present  a
proposal  for  a  Directive  covering  all  encoded
services  in  respect  of  which  encoding  is  used  to
ensure  payment  of  a  fee,  and  agreed  that  this
should 
services
information 
provided  at  a  distance  by  electronic  means  and  at
the  individual  request  of  a  service  receiver,  as  well
as  broadcasting  services;

include 

society 

6.  Whereas 

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

(1)  OJ  C  314,  16.10.1997,  p.  7.
(2)  OJ  C  129,  27.4.1998,  p.  16.
(3)  Opinion of the European Parliament of 30 April 1998 (OJ C
152,  18.5.1998,  p.  64),  Council  Common  Position  of  29
June  1998,  and  Decision  of  the  European  Parliament  of  . . .
(not  yet  published  in  the  Official  Journal).

7.  Whereas 

the 

issue  was
recognized  by  the  Commission  Communication  on
‘A  European  Initiative  in  Electronic  Commerce’;

importance  of 

this 

(4)  OJ  C  167,  2.6.1997,  p.  31.

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internal 

frontiers 

in  which 

8.  Whereas,  in  accordance  with  Article  7a  of  the
Treaty,  the  internal  market  is  to  comprise  an  area
the 
without 
free
movement  of  services  and  goods 
is  ensured;
whereas  Article  128(4)  of  the  Treaty  requires  the
Community to take cultural aspects into account in
its  action  under  other  provisions  of  the  Treaty;
whereas  by  virtue  of  Article  130(3)  of  the  Treaty,
the  Community  must,  through  the  policies  and
activities  it  pursues,  contribute  to  creating  the
conditions  necessary  for  the  competitiveness  of  its
industry;

9.  Whereas  this  Directive  is  without  prejudice  to
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;

10.  Whereas  this  Directive  is  without  prejudice  to  the
cultural  aspects  of  any  further  Community  action
concerning  new  services;

11.  Whereas  the  disparity  between  national  rules
concerning  the  legal  protection  of  services  based
on,  or  consisting  of,  conditional  access  is  liable  to
create  obstacles  to  the  free  movement  of  services
and  goods;

15.  Whereas,  therefore,  the  legal  framework  for  the
creation  of  a  single  audiovisual  area  laid  down  in
Council  Directive  89/552/EEC  of  3  October  1989
on  the  coordination  of  certain  provisions  laid
down  by  law,  regulation  or  administrative  action
in  Member  States  concerning  the  pursuit  of
television  broadcasting  activities (1)  should  be
supplemented  with  reference  to  conditional  access
techniques as laid down in this Directive, in order,
not least, to ensure equal treatment of the suppliers
of cross-border broadcasts, regardless of their place
of  establishment;

16.  Whereas, in accordance with Council Resolution of
29  June  1995  on  the  effective  uniform  application
of Community law and on the penalties applicable
for  breaches  of  Community  law  in  the  internal
market (2),  Member  States  are  required  to  take
action  to  ensure  that  Community  law  is  duly
applied  with 
and
same 
thoroughness  as  national  law;

effectiveness 

the 

17.  Whereas,  in  accordance  with  Article  5  of  the
Treaty,  Member  States  are  required  to  take  all
appropriate  measures  to  guarantee  the  application
and  effectiveness  of  Community  law,  in  particular
by ensuring that the sanctions chosen are effective,
dissuasive  and  proportionate  and  the  remedies
appropriate;

to 

these 

remove 

12.  Whereas  the  application  of  the  Treaty  is  not
sufficient 
internal  market
obstacles; whereas those obstacles should therefore
be removed by providing for an equivalent level of
protection  between  Member  States;  whereas  this
implies  an  approximation  of  the  national  rules
relating to the commercial activities which concern
illicit devices;

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

14.  Whereas 

those 

activities 

commercial 

are
detrimental to consumers who are misled about the
origin  of  illicit  devices;  whereas  a  high  level  of
consumer  protection  is  needed  in  order  to  fight
against  this  kind  of  consumer  fraud;  whereas
Article  129a(1)  of  the  Treaty  provides  that  the
Community  should  contribute  to  the  achievement
of  a  high  level  of  consumer  protection  by  the
measures 
is  adopts  pursuant  to  Article  100a
thereof;

18.  Whereas 

the 

the 

approximation  of 

laws,
regulations  and  administrative  provisions  of  the
Member States should be limited to what is needed
in  order  to  achieve  the  objectives  of  the  internal
market, 
in  accordance  with  the  principle  of
proportionality as set out in the third paragraph of
Article  3b  of  the  Treaty;

19.  Whereas  the  distribution  of  illicit  devices  includes
transfer by any means and putting such devices on
the  market  for  circulation  inside  or  outside  the
Community;

20.  Whereas  this  Directive  is  without  prejudice  to  the
application  of  any  national  provisions  which  may
prohibit  the  private  possession  of  illicit  devices,  to
the  application  of  Community  competition  rules
and 
the  application  of  Community  rules
concerning  intellectual  property  rights;

to 

21.  Whereas  national  law  concerning  sanctions  and
remedies  for  infringing  commercial  activities  may

(1)  OJ  L  298,  17.10.1989,  p.  23.  Directive  as  amended  by
Directive  97/36/EC  of  the  European  Parliament  and  of  the
Council  (OJ  L  202,  30.7.1997,  p.  60).

(2)  OJ  C  188,  22.7.1995,  p.  1.

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19.8.98

provide that the activities have to be carried out in
the  knowledge  or  with  reasonable  grounds  for
knowing  that  the  devices  in  question  were  illicit;

22.  Whereas  the  sanctions  and  remedies  provided  for
under  this  Directive  are  without  prejudice  to  any
other  sanction  or  remedy  for  which  provision  may
be  made  under  national  law,  such  as  preventive
measures  in  general  or  seizure  of  illicit  devices;
whereas  Member  States  are  not  obliged  to  provide
criminal  sanctions  for  infringing  activities  covered
by 
this  Directive;  whereas  Member  States’
provisions  for  actions  for  damages  are  to  be  be  in
conformity  with  their  national 
legislative  and
judicial systems;

23.  Whereas  this  Directive  is  without  prejudice  to  the
application  of  national  rules  which  do  not  fall
within  the  field  herein  coordinated,  such  as  those
adopted  for  the  protection  of  minors,  including
those in compliance with Directive 89/552/EEC, or
national provisions concerned with public policy or
public security,

—  information society services within the meaning of
Article  1(2)  of  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 (1),

or  the  provision  of  conditional  access  to  the  above
services  considered  as  a  service  in  its  own  right;

(b) ‘conditional  access’  shall  mean  any  technical  measure
and/or  arrangement  whereby  access  to  the  protected
service  in  an  intelligible  form  is  made  conditional
upon  prior  individual  authorization;

(c)  ‘conditional  access  device’  shall  mean  any  equipment
or  software  designed  or  adapted  to  give  access  to  a
protected  service  in  an  intelligible  form;

(d) ‘associated  service’  shall  mean 

installation,
maintenance  or  replacement  of  conditional  access
devices,  as  well  as  the  provision  of  commercial
communication  services  in  relation  to  them  or  to
protected  services;

the 

(e)  ‘illicit  device’  shall  mean  any  equipment  or  software
designed  or  adapted  to  give  access  to  a  protected
the
service 
authorization  of  the  service  provider;

form  without 

intelligible 

in  an 

HAVE  ADOPTED  THIS  DIRECTIVE:

(f)  ‘field  coordinated  by  this  Directive’  shall  mean  any
provision  relating  to  the  infringing  activities  specified
in  Article  4.

Article  1

Scope

The  objective  of  this  Directive 
is  to  approximate
provisions  in  the  Member  States  concerning  measures
against  illicit  devices  which  give  unauthorised  access  to
protected  services.

Article  2

Definitions

Article  3

Internal  market  principles

1. Each Member State shall take the measures necessary
to prohibit on its territory the activities listed in Article 4,
and  to  provide  for  the  sanctions  and  remedies  laid  down
in  Article  5.

2. Without  prejudice  to  paragraph  1,  Member  States
may  not:

For  the  purposes  of  this  Directive:

(a)  restrict 

(a)  ‘protected  service’  shall  mean  any  of  the  following
services, where provided against remuneration and on
the  basis  of  conditional  access:

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

of  Directive  89/552/EEC,

—  radio  broadcasting,  meaning  any  transmission  by
wire or over the air, including by satellite, of radio
programmes 
the
public,

reception  by 

intended 

for 

the  provision  of  protected  services,  or
in  another

associated  services,  which  originate 
Member  State;  or

(b) restrict  the  free  movement  of  conditional  access
devices for reasons falling within the field coordinated
by  this  Directive.

(1)  OJ  L  109,  26.4.1983,  p.  8.  Directive  as  last  amended  by
Commission  Decision  96/139/EC  (OJ  L  32,  10.2.1996,  p.
31).

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Article  4

Infringing activities

Member  States  shall  prohibit  on  their  territory  all  of  the
following activities:

(a)  the  manufacture,  import,  distribution,  sale,  rental  or
possession  for  commercial  purposes  of  illicit  devices;

(b) the 

installation,  maintenance  or  replacement  for

commercial  purposes  of  an  illicit  device;

(c)  the  use  of  commercial  communications  to  promote

illicit devices.

Article  5

Sanctions  and  remedies

1. The  sanctions  shall  be  effective,  dissuasive  and
proportionate  to  the  potential  impact  of  the  infringing
activity.

2. Member  States  shall  take  the  necessary  measures  to
ensure 
that  providers  of  protected  services  whose
interests are affected by an infringing activity as specified
in Article 4, carried out on their territory, have access to
appropriate  remedies,  including  bringing  an  action  for
damages  and  obtaining  an  injunction  or  other  preventive
measure,  and  where  appropriate,  applying  for  disposal
outside  commercial  channels  of  illicit  devices.

Article  6

Implementation

When  Member  States  adopt  such  measures,  they  shall
contain  a  reference  to  this  Directive  or  shall  be
accompanied  by  such  reference  at  the  time  of  their
official  publication.  The  methods  of  making  such
reference  shall  be  laid  down  by  Member  States.

2. Member States shall communicate to the Commission
the  text  of  the  provisions  of  national  law  which  they
adopt  in  the  field  coordinated  by  this  Directive.

Article  7

Reports

every 

three  years 

Not later than five years after the entry into force of this
Directive,  and 
the
Commission  shall  present  a  report  to  the  European
Parliament,  the  Council  and  the  Economic  and  Social
Committee  concerning 
this
the 
Directive  accompanied,  where  appropriate,  by  proposals
for  adapting  it  in  the  light  of  technical  and  economic
developments.

implementation  of 

thereafter, 

Article  8

Entry  into  force

This  Directive  shall  enter  into  force  on  the  day  of  its
publication  in  the  Official  Journal  of  the  European
Communities.

Article  9

Addressees

This  Directive  is  addressed  to  the  Member  States.

1. Member  States  shall  bring  into  force  the  laws,
regulations  and  administrative  provisions  necessary  to
comply  with  this  Directive  by  [. . .] (1).  They  shall  notify
them  to  the  Commission  forthwith.

For  the  European  Parliament

For  the  Council

The  President

The  President

Done  at  . . .

(1)  18  months  after  the  date  of  publication.

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STATEMENT  OF  THE  COUNCIL’S  REASONS

I. 

INTRODUCTION

1.  On  23  September  1997,  the  Commission  submitted  a  proposal  for  a  European
Parliament  and  Council  Directive  on  the  legal  protection  of  services  based  on,  or
consisting  of,  conditional  access.

The  proposal  is  based  on  Articles  57(2),  66  and  100a  of  the  EC  Treaty.

2.  The  European  Parliament  delivered  its  first-reading  Opinion  on  30  April  1998.

The  Economic  and  Social  Committee  delivered  its  Opinion  on  25  February  1998.

Further to the European Parliament’s Opinion, the Commission submitted an amended
proposal  on  20  May  1998.

3.  The  Council  adopted  its  common  position,  under  Article  189b  of  the  Treaty,  on  29

June  1998.

II.  OBJECTIVE

The purpose of the proposal is to ensure an adequate level of legal protection to television,
radio  broadcasting  and  information  society  services  whose  remuneration  depends  on
‘conditional  access’  techniques  such  as  encryption  and  electronic  locks.  Such  services
include  pay-TV,  video-on-demand,  audio-on-demand  and  electronic  publishing.  The
Member  States  will  be  obliged  to  prohibit,  and  provide  appropriate  sanctions  against,  a
wide  range  of  commercial  piracy  activities  which  allow  the  circumvention  of  conditional
access  techniques  and  give  unauthorised  access  to  protected  service.

III.  THE  COMMON  POSITION

1.  General  comments

The  Council’s  common  position  is  in  line  with  the  objective  and  the  content  of  the
Commission  proposal  to  ensure  an  adequate  level  of  legal  protection  of  a  broad  range
of  services  that  are  provided  against  remuneration  and  on  the  basis  of  ‘conditional
access’  techniques.

2.  Specific  comments

The Council considered that a number of changes should be made to the Commission’s
proposal.  However,  these  changes  do  not  substantially  alter  objectives  nor  content  of
the  proposal.  These  changes  are  summarised  hereafter:

(a)  P r i n c i p a l   c h a n g e s   m a d e   t o   t h e   C o m m i s s i o n   p r o p o s a l

(i)  Scope  (Article  1)

The Council deemed it necessary to introduce a new article to make the scope
of  the  Directive  clearer  and  more  precise.

In  order  to  give  further  examples  of  national  measures  not  covered  by  the
Directive,  recital  23  has  been  extended.

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(ii)  Definitions  (Article  2)

The  Council  considered  it  appropriate  for  reasons  of  legal  certainty  to  make
the definitions clearer and easier to read. Therefore the following modifications
were  made:

—  the  words  ‘against  remuneration’  have  been  moved  from  (b)  to  (a),

—  the  text  of  (d)  has  been  clarified,

—  the  definition  of  ‘unauthorised  access’  has  been  merged  into  the  definition

of  ‘illicit  device’  in  (e),

—  previous  (g)  has  been  reworded  and  clarified.

(iii)  Infringing  activities  (Article  4)

This  Article,  which  deals  with  various  infringing  activities  related  to  illicit
devices,  illicit  services  and  illicit  promotion,  states  that  only  commercial
activities are unlawful, it being understood that Member States are free to take
measures  at  national  level  against  private  possession.

In  order  to  clarify  the  provision  of  infringing  activities  and  avoid  possible
loopholes  a  reference  to  ‘rental’  and  ‘distribution’  of  illicit  devices  has  been
added  in  the  list  of  infringing  activities.  The  Council  also  considered  it
appropriate  to  clarify  what  is  meant  by  ‘distribution’  in  a  new  recital  19.  In
order  to  make  sure  that  infringements  require  intention  (i. e.  have  to  be
committed  knowingly),  the  Council  also  included  a  new  recital  21.

(iv)  Sanctions  and  remedies  (Article  5)

Article 5(2) sets out various remedies that can be invoked by service providers
in  the  Member  States.  The  following  modifications  to  the  Commission
proposal relate to the nature of legal regimes in different Member States rather
than  to  the  content  of  the  proposal:

—  to make the text clearer ‘service providers’ has been replaced by ‘providers

of  protected  services’,

—  in  order  to  take  into  account  the  different  meaning  of  the  notion  of
‘injunction’  in  the  different  national  legal  regimes,  the  common  position  is
completed  with  a  specific  reference  to  ‘other  preventive  measures’,

—  the  notion  of  ‘seizure’  has  been  replaced  by  ‘disposal  outside  commercial
channels’, since ‘seizure’ can in certain legal systems only be executed under
criminal law,

—  in  order  to  clarify  these  issues  further,  a  new  recital  22  has  been  added.

(b) C o u n c i l   p o s i t i o n   o n   t h e   E u r o p e a n   P a r l i a m e n t ’ s   a m e n d m e n t s

(i)  Amendments  included  in  whole  or  in  part  in  the  common  position

The Council retained eleven amendments (Nos 1, 2, 6, 7, 8, 12, 13, 15, 19, 23
and  24)  proposed  by  the  European  Parliament.

—  Amendments  1,  6,  8,  12  and  23  have  been  incorporated  verbatim.
However, it should be noted that amendment No 23 has been incorporated
in  a  new  recital  13  instead  of  an  Article,

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—  Amendments  2,  7,  13,  15,  19  and  24  have  been  adopted  in  spirit  with

slight modifications.

Amendment  No  2  is  modified  to  reflect  the  exact  wording  of  the  Treaty;
amendment  No  7  is  supplemented  by  the  words  ‘possible  future’  before
community  or  national  provisions,  since  no  such  legislation  exists  at  the
moment;  amendment  No  13  is  modified  in  order  to  maintain  coherence  with
the  original  proposal;  in  amendment  No  15  the  words  ‘measures  by  Member
States’  have  been  replaced  by  ‘national  provisions’;  amendments  Nos  19  and
24  are  reflected  in  spirit.

(ii)  Amendments  not  incorporated  in  the  common  position

In  declining  to  include  amendments  Nos  5,  9,  11,  18,  20,  21,  22  and  part  of
23 in its common position, the Council endorsed the Commission’s position as
set  out  in  its  amended  proposal.

As  regards  the  remaining  amendments,  the  Council  was  guided  by  the
following  considerations:

—  Amendments  Nos  3,  4,  10,  16,  17  and  25:  the  Council  did  not  deem  it
advisable  to  insert  these  amendments  which  related  to  the  use  of
conditional  access  for  reasons  other  than  the  protection  of  remuneration,
since  they  are  not  covered  by  the  objectives  of  the  proposal,

—  Amendment No 14: the Council took the view that it was inappropriate to
add  a  recital  that  included  such  a  specific  reference  to  the  content  of  this
Commission’s  Communication.