Commission staff working paper - Public consultation on piracy protection for services protected by conditional-access systems {COM(2008) 593}
Date: 2008-09-30
Institutions: European Commission
Subjects: access to information, activity report, application of EU law, audiovisual piracy, computer piracy, pay television, report, right to justice

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 30.9.2008 
SEC(2008) 2506 

COMMISSION STAFF WORKING PAPER 

Public consultation on piracy protection for services protected by conditional-access 
systems 

{COM(2008) 593} 

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This  document  comment  on  the  contributions  the  Commission  received  during  the  public 
consultation  held  between  11 February  and  4 April  2008.  The  consultation  focused  on  the 
following  themes:  development  of  the  single  market  for  conditional  access  services, 
effectiveness  of  the  Member  States'  implementation  of  the  Directive,  new  services,  its 
contribution  to  copyright  protection,  digital  rights  management,  and  reasons  for  using 
conditional access. 

The contributions can be consulted on the single market website at: 
http://ec.europa.eu/internal_market/media/elecpay/index_en.htm. 

1. 

CONTENT OF THE DIRECTIVE 

Protected services 

Since  the  planning  stage,  the  scope  of  the  Directive  has  been  intended  to  extend 
beyond pay-TV alone and also to cover: 
- television and radio broadcasting services, and 
- information society services 
when protected by a conditional access system and provided against payment. 

Moreover,  conditional  access  services  themselves  are  included  among  the  services 
protected. Such services comprise technical protection hardware or software enabling 
access  to  the  service  to  be  restricted  to  addressees  duly  authorised  by  the  service 
provider, normally upon payment for the service in question. 

A number of consultation contributions asked for clarification of what services were 
protected  by  virtue  of  the  adoption  of  the  'Audiovisual  Media  Services'  Directive 
2007/65/EC1  amending  the  'Television  Without  Frontiers'  Directive  89/552/EC. 
Article 2  of  Directive  98/84/EC  refers  to  the  definition  of  television  broadcasting 
contained in Article 1(a) of Directive 89/552/EEC. 

Directive  2007/65/EC  extended  the  scope  of  the  original  'Television  Without 
Frontiers'  Directive  and  added  a  number  of  definitions  in  Article 1.  Television 
broadcasting  services2  are  now  defined  in  Article 1(e)  rather  than  1(a)  of  the 
amended Directive. This is a technical detail which in no way changes the scope of 
Directive 98/84/EC. There is indeed a difference inasmuch as the new definition no 
longer refers to the means of transmission but to the characteristics of the television 
programming; this does not, however, affect the identification of television channel 
broadcasters. 

Directive  2007/65/EC  also  introduces  the  definition  of  an  'on-demand  audiovisual 
media  service'3,  defining  and  limiting  the  information  society  services  which  fall 

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OJ L 332, 18.12.2007, p. 27. 
Article 1(e):  'television  broadcasting'  or  'television  broadcast'  (i.e.  a  linear  audiovisual  media  service) 
means an audiovisual media service provided by a media service provider for simultaneous viewing of 
programmes on the basis of a programme schedule. 
Article 1(g): 'on-demand audiovisual media service' (i.e. a non-linear audiovisual media service) means 
an audiovisual media service provided by a media service provider for the viewing of programmes at 

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within  the  scope  of  the  new  Directive.  In  any  case,  the  definition  of  the  scope  of 
Directive  98/84/EC  continues  to  be  a  broad  one  and  is  unchanged  in  this  respect 
since it covers a priori any information society service by virtue of the fact that it is 
provided via a conditional access service (regardless of the fact that it may also be an 
on-demand audiovisual media service). 

However,  the  two  Directives  govern  different  fields  and  the  difference  in  scope, 
which also existed before 2007, has no bearing on their respective operation. 

Illicit devices 

Article 2(e)  of  Directive  98/84/EC  defines  an  illicit  device  as  'any  equipment  or 
software designed or adapted to give access to a protected service in an intelligible 
form without the authorisation of the service provider'. 

This  definition  should  cover  any  infringement  of  a  conditional  access  system  over 
and above the first decoders used by pay-TV. The  definition thus covers  the  act of 
circumventing the software used for conditional access purposes. 

As  a  result,  as  far  as  new  forms  of  pirating  are  concerned,  it  should  be  noted  that 
disclosing decryption keys online or converting cards into pirate cards are covered by 
the definition of illicit devices. Pirating is only punishable, however, if it is linked to 
commercial activities, and such links are often difficult to prove (cf. section 3.2). 

Infringing activities 

Article 4  of  the  Directive  lists  the  infringing  activities.  These  are  any  commercial 
activities  associated  with  the  life  cycle  of  illicit  devices:  manufacture,  import, 
distribution,  sale,  rental,  possession  for  commercial  purposes, 
installation, 
maintenance, replacement, and commercial communications of same. 

It  should  be  emphasised  that  the  Directive  requires  that  Member  States  impose 
sanctions  only  in  the  case  of  commercial  activities  linked  with  the  illicit  devices. 
Recital 21  of  the  Directive  indicates  that  national  provisions  may,  nonetheless, 
prohibit the private possession of illicit devices. 

2. 

COMMUNITY-WIDE HARMONISATION 

In  March  1996,  the  Commission  published  its  Green  Paper  'Legal  protection  for 
encrypted  services  in  the  internal  market'  (COM(96)  76)4  justifying  the  need  for 
Community-wide action. It concluded that differences in legislation were preventing 
any  development  in  cross-border  encrypted  services  and  that  harmonisation  was 
needed in order to complete the regulatory framework establishing the single market 
in  television  broadcasting  services  created  at  the  time  of  Directive  89/552/EEC 

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the moment chosen by the user and at his individual request on the basis of a catalogue of programmes 
selected by the media service provider; 
Available at: 
http://europa.eu/documents/comm/green_papers/pdf/com96_76_en.pdf.  

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(Television Without Frontiers) and Directive 93/83/EEC (Cable and Satellite)5. This 
is  why  Articles 57(2)  and  100A  of  the  Treaty  (now  Articles  47  and  95  of  the  EC 
Treaty)  were  chosen  as  the  basis  for  the  Directive  aimed  at  protecting  conditional 
access  services.  These  Articles  deal  respectively  with  the  harmonisation  of  service 
activities and establishment of the single market. 

3. 

THE 'GREY' MARKET 

In  the  consultation,  the  subject  of  the  grey  market  provoked  many  reactions  and 
troubled the majority of contributors, some of whom even denied that the Directive 
was in any way aimed at achieving a single market, claiming it was adopted solely to 
prevent piracy at the European level.  

Other  responses  highlighted  practical  difficulties:  the  low  level  of  cross-border 
demand  rendering  such  services  of  little  economic  interest,  particularly  given  the 
language  barriers  between  Member  States,  even  though  the  principles  of  free 
movement form the very basis of the single market.  

Finally,  contributors  cited  examples  of  pay-TV  offers  available  on  a  cross-border 
basis, thus mitigating an excessively negative view of the impact of the Directive on 
the  single  market:  A  German  pay-TV  channel  also  broadcasts  in  Austria,  a  British 
channel  in  Ireland,  a  Greek  channel  broadcasts  to  the  entire  Greek  population 
throughout  Europe,  a  Polish  channel  is  available  in  Germany6  and  several  cross-
border TV offers cover all the Scandinavian countries. 

4. 

LEVEL OF PENALTIES 

Contributors differed in their assessments of the effectiveness of national legislation. 
While, for example, Danish and French contributors expressed satisfaction with the 
level of fines imposed, this view was not shared by German and Italian contributors. 

It should be noted that the level of satisfaction depends not only on the amount but 
also  on  the  nature  of  the  sanctions  imposed.  Operators  expressed  preference  for 
criminal  penalties  sufficiently  stringent  to  represent  a  deterrent  in  view  of  the 
commercial  damages  incurred.  The  contributions  suggest  two  approaches:  the  first 
involves assessing sanctions in relation to the benefits drawn from piracy, the second 
adjusting the level of sanctions to those applied in respect of other offences, such as 
theft,  fraud  or  counterfeiting.  On  this  point,  it  is  interesting  to  note  that  German 
operators  prefer  to  base  their  actions  on  the  provisions  regulating  copyright  since 
sanctions  laid  down  in  that  area  are  more  stringent  than  those  applied  for  piracy 
involving conditional access systems. 

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Council  Directive  93/83/EEC  of  27 September  1993  on  the  co-ordination  of  certain  rules  concerning 
copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission, 
OJ L 248, 6.10.1993, p. 15. 
As well as in the United States and Australia. 

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5. 

SANCTIONS UPON PRIVATE POSSESSION 

Contributions from the sector's stakeholders, service providers and rightholders are in 
favour  of  extending  restrictions  to  cover  the  private  domain.  They  approve  the 
existence of such laws in some States and regret that they are not available in others. 
Consumers'  representatives  did  not  answer  this  question,  focusing  rather  on  the 
necessary accessibility of services for all consumers. 

Sanctioning  private  possession  has  two  major  advantages,  according  to  operators. 
Firstly, it is a clear indication that participating in piracy, which all too often is not 
condemned  by  society,  is  actually  criminal in  nature.  By  deterring  consumers  from 
purchasing pirated systems or services, it would thus limit the market for same. 

It  could,  secondly,  help  sanction  new  types  of  piracy  based  on  a  combination  of 
different  actions,  some  of  which  may  be  private,  such  as  the  online  disclosure  of 
encryption codes, codes subsequently used directly by the consumer to programme a 
chip  card  purchased  unprogrammed,  whose  sale  (the  commercial  transaction)  is  a 
priori lawful.  

6. 

NEW MODES OF DISTRIBUTION 

The  protection  afforded  by  the  Directive  to  new  forms  of  content  distribution  was 
one of the subjects raised in the consultation. 

Virtually all the contributors who responded on this subject considered that the new 
forms of content distribution are effectively covered by Directive 98/84/EC. A priori, 
national legislation should reflect this extension in scope, but this should be checked 
in the Member States. 

Some contributions mentioned a need for standardisation in terms of the conditional 
access systems used to receive services. The development of these new markets may 
be checked by the lack of equipment interoperability, slowing consumer mobility and 
the  entry  of  new  operators,  or  by  a  slowdown  in  proprietary  system  innovation 
following  what  may  be  a  compulsory  standardisation.  Nonetheless,  some 
stakeholders are afraid that standardisation would benefit pirates. 

This sensitive issue was topical at the time when pay-TV was being developed and 
has  been  covered  by  a  number  of  European  acts.  Currently  Article 6(1)  of  the 
'Access'  Directive  2002/19/EC7  imposes  certain  conditions  on  conditional  access 
systems detailed in Annex 1 of the Directive. 

7. 

NEW FORMS OF PIRACY 

Some  legal  decisions,  particularly  in  Scandinavia,  have  overcome  the  problems 
associated  with  identifying  new  forms  of  piracy  thanks  to  intensive  work  in 
compiling  evidence  and  stakeholder  cooperation  with  the  national  authorities.  This 

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Directive  2002/19/EC  on  access  to,  and  interconnection  of,  electronic  communications  networks  and 
associated facilities (Access Directive) OJ L 108, 24.4.2002. 

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example  illustrates  the  importance  of  working  in  collaboration  with  national 
administrations and the need to train competent staff. 

8. 

EXTENSION OF PROTECTION TO RIGHTHOLDERS 

One of the subjects of the consultation was the potential extension of the protection 
afforded by the Directive to rightholders and holders of rights to sports events.  
The  latter  may  be  interested  in  taking  action  themselves  in  the  event  of  piracy 
involving the retransmission of content to which they hold the rights. 

Responses clearly differed depending on whether they were from rightholders, most 
of  whom  were  in  favour  of  extending  the  protection  in  their  favour,  or  audiovisual 
service  providers,  who  tended  to  be  opposed  to  this.  Service  providers  highlighted 
the  protection  already  provided  by  copyrights,  which,  as  indicated  above,  can  in 
some countries result in more stringent sanctions than those applied to the protection 
of conditional access. 

In the first place, the position of rightholders must be distinguished from that of the 
holders  of  rights  to  sports  events.  While  the  former  are  directly  protected  by 
copyright rules, the latter are unable to benefit directly from them and retransmission 
of  a  sports  event  will  not  be  protected  by  copyright  except  under  rights  associated 
with copyright which are held by the broadcaster, who is the only party that may take 
action  against  retransmission  piracy.  The  counter  argument  of  the  duplication  of 
protection  can  therefore  be  upheld  only  in  the  case  of  the  retransmission  of  sports 
events in relation to the holders of rights to these events. 

9. 

PROTECTION OF REMUNERATION, THE ONLY CRITERION FOR PROTECTION 

The majority of contributions in response to the public consultation launched by the 
Commission were in favour of extending the protection afforded by the Directive and 
most  often  mentioned  the  objectives  of  territorial  restrictions  and  the  protection  of 
minors.  One  contribution  also  mentioned  securing  the  signal  transmitted  from  the 
network head-end to the local distribution network. 

On this subject, a number of contributions were in favour of signal theft being taken 
into account in the Directive. Thus, interception and decoding of an encrypted signal 
sent  to  local  distribution  networks  could  –  subject  to  a  more  detailed  legal 
examination in cooperation with the Member States – be considered to be prohibited 
by the Directive if the purpose were the commercial use of the content intercepted. 
However,  a  general  protection  under  Directive  98/84/EC  against  any  pirating  of  a 
signal, even a non-encrypted one, would go far beyond its original scope. 

In general, the contributions express some frustration with the fact that protection is 
limited solely to the objective of ensuring the remuneration of the service provider. 

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