Source: EURLEX
Language: en
Format: md

**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 information society services that are provided against
remuneration and on the basis of conditional access.

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 paytelevision, 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 1997 [1] .

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**

**Recital 2:**

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

**Recital 3:**

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

**Recital 3a) new**

**Amended Proposal**

Whereas the cross-border provision of
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,
significantly to the achievement of the
objectives laid down in the Treaty

Whereas the Treaty provides for the free
movement of services which are normally
provided for remuneration ; whereas this
right, as applied to broadcasting and
Information Society services, is also a
specific manifestation in Community law of
a more general principle, namely the
freedom of expression as enshrined in
Article 10 of the European Convention for
the Protection of Human Rights and
Fundamental Freedoms; whereas this
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
access for consumers in some Member

States to services which are freely available
in other Member States,

#### **X**

**Recital 3 b) new**

**Recital 5b) new**

**Recital 6**

Whereas the opportunities offered by
digital technologies provide the potential
to increase 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 this Directive should grant
protection against illicit (pirated) devices
i.e. devices which are explicitly designed or
technically adapted for unauthorised
reception;

Whereas the encryption of broadcasting

services must not
inconsiderately deprive the average viewer
of these services if they were
orginally available without charge;

Whereas the opportunities offered by digital
technologies provide the potential 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

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

**Recital 8 a) 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;

**Recital 8 b) new** Whereas this Directive is without prejudice
of the cultural aspects of any further
Community action concerning new services,

#### **_£_**

**Recital 10 a) new**

**Recital 10 b) new**

**Recital 13 a) new**

**Recital 14 a) 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

Whereas the sanctions and remedies

provided for under this Directive are
without prejudice to any other sanction or
remedy for which provisions may be made
under national law, such as preventive
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 effective, proportionate and
dissuasive,

**Recital 14 b) new** 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 is without prejudice to the
application of Community competition
rules; whereas this Directive is without
prejudice to the application of Community
rules concerning intellectual property
rights

**Recital 15 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 to the application of the
Community competition rules; whereas this
Directive is without prejudice to the
application of Community rules concerning
intellectual property rights

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;

**Recital 16 a) new** 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
to the above service in its own right conditional access to the above services,
considered as a service in its own right.

**Article 4.2**

Each Member State shall take the

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 the seizure of illicit
devices

Each Member State shall take the measures

necessary, pursuant to its legislation, 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 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_**