Source: EURLEX
Language: en
Format: md

**COMMISSION OF THE EUROPEAN COMMUNITIES**

**Brussels, 30.08.1996**
**COM(96)** **392 final**

**%/<>220** **(COD)**

**COMMUNICATION FROM THE COMMISSION**
**TO THE EUROPEAN PARLIAMENT. THE COUNCIL**
**AND THE ECONOMIC AND SOCIAL COMMITTEE**

**concerning regulatory transparency in the internal market for**
**information society services**

**Proposal for a**
**EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE**

**amending for the third time Directive** **83/189/EEC** **laying down a**

**procedure for the provision of information in the field of**

**technical standards and regulations**

**(presented by the Commission)**

**Executive summary**

**Introduction**

I. Information Society services in the Internal Market

A. Towards a European market for services

B, The current legal framework of the Internal Market

**II.** The need for a transparency mechanism

A. The outlook for regulatory activity in the Member States

B. The risks to the functioning of the Internal Market

**III.** Description of the transparency mechanism

A. Objectives

B. General approach
C. Legal instrument
D. Scope
E. Legal basis
F. Subsidiarity
**IV.** **Proposal for** **a** **Directive**

**Table of contents**

**Executive summary**

###### **INTRODUCTION, 1 d**

**I.** **INFORMATION SOCIETY SERVICES** **IN** **THE INTERNAL**

**MARKET.....** **.......'.....** **^4**
**A.** **Towards a European market for services** 4
1. _A_ _wide diversity_ _of services_ 4
2. _A_ _gradual development_ _of markets_ 6
3. _Geographic differences_ _in the_ _development_ _of new_ _markets_ 7
4. _An_ _inevitable growth_ _in the level of_ _cross-border services_ 8
B. The current legal framework of the Internal Market... 9

H. THE NEED FOR A TRANSPARENCY MECHANISM 14
A. **The** outlook for regulatory activity in the Member States... 14
1. Preregulatory mobilisation in the Member States 14
2. New regulatory needs 18
_a._ _The need_ _for new forms of protection_ 19
_b._ _The need to scale_ _down existing forms of protection_ 20
3. A wide-ranging and drawn-out regulatory adjustment 21
_(a) A_ _broad spectrum_ _of rules and_ _regulations_ 21
_(b)_ _A_ _vague_ _and_ _very drawn-out timetable_ ... 22
B. The risks to the functioning of the Internal Market..... 23
1. Risks of refragmentation of the Internal Market 23
2. Risks of overregulation...... 24
3. Risks of inconsistency 25

**III.** **DESCRIPTION OF** THE **TRANSPARENCY MECHANISM** 26

**A.** **Objectives** 26
**B.** **General approach** 28
1. Experience gained with existing transparency mechanisms 28
2. The proposed transparency mechanism 31
C. **Legal instrument** **33**
**D.** **Scope..** 34
1. Regulations concerning services that must be notified. 34
2. Exceptions 36
**E.** **Legal basis** **37**
**F.** **Subsidiarity** **38**

**IV.** **PROPOSAL FOR A DIRECTIVE** 40

_**±**_ **q_**

**Executive summary**

**1.** **The purpose of this communication and of the accompanying proposal for** a
**Council Directive is to establish** at **Community level a procedure for the provision**
**of information and the holding of consultations** on **possible future** draft **rules** and
regulations **on** Information Society services.

2. As part of its general policy on the Information Society, the Commission is keen
to develop a legal framework enabling _inter alia_ the new services which will be
provided in the Information Society to benefit from the opportunities afforded by
the area without internal frontiers, while bearing in mind both the fundamental
objectives to be pursued in the general interest and the social, societal and cultural
factors that come into play. These services will be (or already are) highly diverse
and include electronic newspapers, distance education or healthcare services,
distance tourism services, the distance selling of goods and services by electronic
means, distance betting services, interactive games and leisure activities, etc. The
feature they all have in common is that they are provided electronically at a
distance and are intended to meet one or more specific requests by an individual
service receiver. Owing to this latter characteristic, the services are "interactive"
inasmuch as the provider responds to specific requests from a receiver and
vice-versa.

3. The area without internal frontiers is a key factor in the development of these
services as it will enable them to cross borders, thereby providing ordinary
citizens with new ways of communicating and receiving information, consumers
with new, reliable forms of access to goods and services, and the European
service supplying industries with new opportunities to increase their
competitiveness.

4. At present, these services are not developing in a legal vacuum: the body of law
governing the Internal Market, in particular Articles 52 (freedom of
establishment) and 59 (freedom to provide services) of the Treaty and the existing
secondary legislation, already constitutes a basic legal framework. However,
those involved in the considerable amount of analysis that has been undertaken on
the subject at both national and Community level (studies, reports and think
tanks) agree that the current national rules and regulations applicable to existing
services need to be adapted to take account of the peculiarities of the new
Information Society services, and predict a surge of regulatory activity in this
area. Indeed, these services might give rise to different risks from those covered
by the existing rules and regulations on traditional services or on television
broadcasting or telecommunication services. Accordingly, it will be necessary to
amend the existing rules and regulations either to allow then to better safeguard
the general interest or, instead, to scale them down where their application is no
longer justified. Moreover, the intense interest in the Information Society
confirms that we are on the eve of a substantial alteration to the regulatory
framework.

5. Without co-ordination at Community level, there is every reason to believe that
these new rules and regulations in the Member States will be highly divergent
from one Member State to another, each of them being motivated by concerns of
their own stemming from a different perception of the general interest objectives

##### ifc

to be pursued. This future regulatory activity thus creates a serious risk of
refragmentation of the Internal Market, that is to say, of the introduction of new,
unjustified or excessive obstacles to the free movement of services between
Member States and to the freedom of establishment for the providers of such
services, which might, moreover, have repercussions at Community level in the
form of overregulation or mutually inconsistent regulations.

At the same time, in view of the cross-border dimension of the new services,
isolated, uncoordinated national initiatives might prove ineffective in terms of
protecting legitimate general interest objectives and might well lay themselves
open to circumvention, notably through geographical relocation and "forum
shopping" by the operators concerned.

6. There is, therefore, a clear need for co-ordination at Community level of this
future regulatory activity in order to forestall any such refragmentation of the
Internal Market and to pursue more incisively general interest objectives that are
worthy of protection. It would be premature, for the purpose of achieving such
co-ordination, to propose extensive and exhaustive harmonisation at Community
level of the substantive rules applicable to Information Society services, without,
of course, prejudice to those fields that are already subject to specific Community
regulation such as, for example, the telecommunications sector. In general, not
enough is known about the form, nature and market development of these new
services for it to be possible to determine the need for, and content of, such
harmonisation in the light of the Internal Market. The Commission accordingly
proposes to co-ordinate these future rules and regulations by means of an
information, consultation and administrative co-operation procedure.

Obviously, this does not preclude in certain specific areas, the launching of work
to examine the need for action at Community level with a view to safeguarding
certain general interest objectives.

7. The procedure laid down in respect of draft rules on goods by
Directive 83/189/EEC of 28 March 1983 already pursues precisely the objective
of establishing a co-ordination procedure. The fact that more than ten years'
experience has been gained in applying this Directive demonstrates its
effectiveness, since it is the most extensively used regulatory transparency
mechanism to date. The administrative co-operation it provides for and the
procedures it lays down are perfectly suited to the needs raised by Information
Society services. The Commission accordingly proposes to widen the Directive's
scope so as to include draft rules and regulations on Information Society services.

8. The proposal for an extended Directive pursues several objectives:

     - _permitting the smooth functioning of the Internal Market particularly by_
_preventing the creation of new obstacles_ via the exchange of information
between Member States and between Member States and the Commission.
Depending on the issue at hand, this information exchange will make it
possible either to forestall the appearance of national rules and regulations that
are incompatible with the principles of free movement of services and

**1 C**

**freedom** **of establishment, or, where the national rules envisaged are likely to**
**result** **in** **justified legal barriers pursuing general interest objectives worthy of**
**protection, to detect the need for new Community rules aimed at** **removing**
those barriers;

**•** _**ensuring more effective**_ _**safeguarding**_ _**of general interest objectives**_ **by**
anticipating the need for Community intervention aimed at ensuring an
adequate, equivalent level of protection between Member States. The
domestic concerns which may induce a Member State to legislate may be
shared by other Member States and may be more effectively met by coordinated protection at Community level;

**•** _**establishing more clearly and**_ _**reducing**_ _**the need for new**_ _**Community**_ _**rules**_
_and regulations_ by permitting a more effective application of the Treaty, in
particular Articles 52 and 59 thereof, and of Community law, together with
closer co-operation between the Member States. A transparency mechanism
would make a valuable contribution here by making it possible, _upstream,_ to
prevent or limit the adoption of certain domestic laws which subsequently
could give rise toregulation, at Community level in an attempt to validate
them which was not really necessary;

**•** _**facilitating**_ _**administrative co-operation**_ **at the stage of** **the** **drafting of rules**
and regulations by encouraging the national legislator to ask other national
administrations about the situation in the other Member States so as not to
legislate in isolation without regard to experience gained elsewhere and the
impact on service providers and receives established in other countries;

**•** _**contributing to the stability of the**_ _**regulatory**_ _**framework,**_ **first of all by**
limiting the risk of unforeseeable regulatory reactions, secondly by avoiding
the periods of uncertainty resulting from infringement proceedings brought
against Member States for failure to fulfil their Community obligations, and
thirdly by enabling operators, competent national authorities and consumers to
have more information about, and contribute to, draft rules and regulations
potentially affecting them.

9. The transparency mechanism would cover draft national rules, except those
aimed at implementing any Community Directive, whether present or future,
on the taking-up and pursuit of service activities where the services are
provided by electronic means at a distance and on the individual request of a
service receiver (element of "interactivity")..

10. The transparency mechanism should, as far as possible, be supplemented by
regulatory and administrative co-operation procedures at international level
with a view to establishing a stable, coherent regulatory framework on a
broader front.

11. The proposed transparency mechanism reproduces the procedural measures
laid down in Directive 83/189/EEC:

### **\ 4~ à**

_**a**_ _**procedure**_ _**for**_ _**the**_ _**provision of**_ _**information**_ _**on**_ **draft** **rules and regulations on**
the services defined above: the Member States would have to communicate to
the Commission any draft provision which will be applicable to Information
Society services. The Commission will forward the information to all the
other Member States in order to make them aware of national initiatives;

_a consultation procedure:_ following notification of the draft rule or regulation,
an initial standstill period of three months, starts to run during which the
Member States and the Commission may make comments or deliver a detailed
opinion (in which case the total standstill period is extended to six months), or,
in the case of the Commission, declare that a future harmonisation proposal
will be presented or that it has already proposed harmonisation measures in the
field concerned (in which case the total standstill period is extended to
twelve months and may be as long as eighteen months).

_a committee:_ the committee of Member States' representatives already
provided for in Directive 83/189/EEC will enable the authorities to stimulate a
dialogue between Member States' legislators and promote administrative cooperation. At a time when in many Member States talks on the legal
framework for services are already under way, the committee might constitute
a particularly useful forum in which the authorities can meet and express their
views.

_**j^Q^**_

**COMMUNICATION FROM THE COMMISSION**
**TO THE EUROPEAN PARLIAMENT. THE COUNCIL**

**AND THE ECONOMIC AND SOCIAL COMMITTEE**

**concerning regulatory transparency in the internal market for**
**information society services**

**INTRODUCTION**

The Commission's policy on the Information Society was defined in its action plan
entitled "Europe's way to the Information Society: an action plan". [1] As part of this
general policy on the Information Society, in March 1995 the Commission defined its
regulatory policy in relation to Information Society services, that is to say, the various
services that will be carried on the information superhighways. [2] A full range of
interactive services will be made available to consumers, including, for example,
electronic newspapers, distance learning, distance legal and healthcare services, distance
tourism services, electronic commerce involving goods and services, distance betting
services, interactive games, leisure services, etc.

These services are, in general terms, characterised by the fact that they are provided at a
distance T by electronic means, and are intended to satisfy one or more specific requests
by an individual service receiver. Owing to this latter characteristic, they are
"interactive" services inasmuch as the provider can react to specific requests from a
receiver and vice versa. These services, hereinafter referred to as "Information Society
services", are therefore different from television broadcasting services in that the
consumer can interactively gain access to them, manipulate them, and choose and control
their content in order that they might meet his own distinct requirements. However, they
also differ from traditional professional services which normally require the provider or
receiver to travel to or from the home (e.g. medical, legal or educational services) in that
they are provided at a distance by electronic means. The social, societal, cultural and
economic implications of this diversity of services are clear: ordinary will above all be
afforded new opportunities for transmitting and receiving information regardless of
frontiers or distances; a dynamic economic sector will come into being; and such services
will be the main _raison_ _d'être_ (apart from the development of telecommunication services
proper) for the development of information networks and technologies in the
European Union. There are also clear implications for European integration inasmuch as,
by doing away with the distance factor, such services will be a means of achieving an
ever-closer union among the peoples of Europe and of establishing closer relations
between the States belonging to the Union.

In this context, the frontier-free area of the Internal Market is a key factor in the success
of the Information Society as the considerable investment needed to develop such
services will be undertaken only if it is possible to achieve economies of scale, target
niche markets, and distribute the services throughout Europe. Thus potential markets
which at national level are too small to be profitable may become interesting if they are
exploitable in all the Member States.

Communication from the Commission to the Council and the European Parliament and to the
Economic and Social Committee and the Committee of Regions, COM(94)347 final, Brussels,
19 July 1994. The action plan was drawn up following the Corfu European Council
(24-25 June 1994), which stressed the need for creating "a clear and stable regulatory framework"
for the Information Society and which invited the Commission to establish as soon as possible a
program of measures needed at the Community level to complete the regulatory framework.
Previously, the report by the High-Level Group on the Information Society, chaired by
Mr Bangemann, had stressed the importance of adopting a single legislative approach which was
both consistent and relevant and at the same time flexible enough to evolve with the new
technologies and new markets.
"Information services    - Establishment of a regulatory framework". Memorandum from
Mr Bangemann, Mr Oreja and Mr Monti, adopted on 22 March 1995. See also the explanatory
memorandum accompanying the proposal for a Directive amending Directive 89/552/EEC,
COM(95)86 final of 31 May 1995, p. 27. _A_ _C\_

**The Commission's regulatory approach to Information Society services must be designed**
**precisely to meet these challenges by ensuring a clear, secure and coherent legal**
**framework. In this respect, the Commission considers it would be both** **premature** **and**
risky to seek, at this stage, **to lay down extensive and specific Community** rules on these
new services. Indeed, inasmuch as **their form, nature and development on** the market are
still **unknown quantities, not enough is known about the needs and problems** which might
justify Community action. **Moreover, there is no legal vacuum** since existing
Community law and, **in particular, the rules** governing **the Internal** Market already
constitute a basic legal framework.

However, this by **no means implies that action is not called for. It is** already clear that the
development of the **Information Society will in future be accompanied by** new rules and
regulations at national level which will alter the existing legal framework. If this
regulatory activity is not co-ordinated at Community level, a refragmentation of the area
without internal frontiers, overregulation and regulatory inconsistencies might ensue to
the detriment of the development of Information Society services and of the pursuit and
effective safeguarding of the relevant general interest objectives.

It is to counter these risks that the Commission has decided that one of the priority
measures at Community level must be, at this stage, to organise this future regulatory
activity by proposing a regulatory transparency mechanism which seeks to ensure the
transparency of future draft national rules and regulations and their compatibility with the
principles of the area without internal frontiers and the other objectives pursued.

This does not imply that the Commission will not present other specific initiatives. The
Commission has already clearly envisaged this possibility, first by deciding that future
Community regulatory initiatives will have to be anchored in the legal framework of the
Internai Market and respect the principle of regulatory consistency, and secondly by
launching preparatory work in the form of the analysis of, or the organisation of
consultations concerning, specific questions which have already been identified with a
sufficient degree of accuracy. The Commission has thus recently adopted three
Green Papers: the Green Paper on _copyright and related rights in the Information_
_Society,_ _[3]_ the Green Paper on _legal protection for encrypted services,_ and, finally, the
Green Paper on _commercial_ _communications in the Internal Market,_ all of which have
been or are the subject of in-depth consultations. Two other Green Papers are also being
prepared, one on _living and working in the Information Society_ and another on _the_
_development of_ _the_ _new audiovisual services,_ which will deal with the question of the
safeguarding of certain general interest objectives, notably the protection of minors and
the promotion of cultural and linguistic diversity, and the question of the development of
the new audiovisual services.

The regulatory transparency mechanism proposed hereinafter represents therefore an
important step in the establishment and organisation of the legal framework of the
Information Society and is motivated by the desire to ensure that the service industries
derive suitable benefit from the area without internal frontiers. It thus forms part of a
coherent policy aimed at ensuring a balanced development of the Information Society

COM(95)382 final of 19 July 1995.

**which takes account of the variety of general interest objectives concerned, notably those**
**relating to social, societal and cultural aspects.** **\**

**It is also an essential means of enabling the Community** **to** **take part more effectively and**
**consistently in the debate and in the handling of regulatory issues of the** **Information**
**Society in the context of international co-operation.** **^**

**I.** **INFORMATION SOCIETY** **SERVICES TN** **THF,** **INTERNAL MARKET**

The **development of the regulatory** **framework** **for the Information Society** is **closely**
linked to the market for services. It would appear that we are **on** the eve **of** a significant
expansion of that market in Europe (A) and that a basic legal framework (B) is already in
place.

A. **Towards a European market for services**
The new national rules and regulations will depend to a large extent on the development
of the market for services in the Information Society. As these services arrive, one by
one, on the market or as their forthcoming arrival impacts on public opinion, regulatory
needs will arise. It is therefore essential first of all to identify the key characteristics of
the development of the market for those new services which are likely to have an impact
at the regulatory level.

_**I.**_ _**A**_ _**Wide diversity**_ _**of**_ _**services**_

All the services currently known or being developed **and** a large **number** of new services
exploiting new possibilities might form part of the Information Society. The common
denominator of all Information Society services will be the special role played by the
final consumer in the chain, and more precisely the fact that the marketing, sale and/or
distribution of the services will be provided to the consumer at **a** distance, by electronic
**means and on his individual request.**

In the light of these key factors, the range of services proposed by the Information
Society is immense. Already, the on-line services offered and planned for sale on the
market cover a great many fields. Active both in the more innovative fields and in the
more traditional fields (health, education, publishing, consumer goods, etc.), operators
have already begun to evaluate and exploit the opportunities afforded by the inclusion of
direct electronic interactivity in their relations with consumers. In the light of current
analyses, [4] the following examples can be given of services already available or planned
for the future:

See, for example:
EUROPEAN INFORMATION TECHNOLOGY OBSERVATORY (OETI), "European Information
Technology Observatory 95", Germany, 1995; LAURENT ABRIL and others, "Développement
d'un environnement multimédia en Europe: Besoins pour le développement d'un Environnement
Multimédia fondé sur les Infrastructures de Télécommunications et les Réseaux de Télévision par
Cable". Final report for DG XIII of the European Commission, DEVOTECH Conseil and
ANALYSIS, January 1995; EUROPEAN IT INDUSTRY ROUND TABLE, "Multimedia in the
Fourth Framework Program", Workshop report, Brussels, June 1, 1994; MINISTRY OF POSTS
AND TELECOMMUNICATIONS, "Reforms toward the Intellectually Creative Society of the
21st Century, Program for the Establishment of High-Performance Info-Communications
Infrastructure", Japan, May 31, 1993; ZENITH MEDIA, "New Interactive Media: The Practical
Guide", Zenith Media, April 1995; AFTEL, "La télématique française en marche vers les
autoroutes de l'information", Les éditions du téléphone, Paris, 1994; THIERRY BRETON, "Les
téléservices en France: Quels marchés pour les autoroutes de l'information?", Officiai Report to
the Minister of State, the Minister for the Interior and Regional Development and the Minister for
Enterprise and Economic Development, JOUVE, Paris, 1994; INSTITUT MULTIMEDIAS;
"Multimédias made in USA", Multimedia seminar, Paris, March-April 1995.

4

**•** _**Electronic**_ _**commerce:**_ **often called, confusingly and incorrectly,** **"teleshopping"** **or**
**described as an "electronic purchasing system", electronic commerce would enable**
**the consumer** **to order products** **directly via his television set or computer terminal.**

**•** _**Distance**_ _**teaching:**_ **distance teaching would be provided interactively; it would rely**
**on an audiovisual aid and would enable the student to answer questions, choose**
**alternatives, and receive** **an** **assessment of** **his/her** **abilities.**

- _**Electronic**_ _**publications/information**_ _**services:**_ **this term covers a wide range** **of**
**services such as** **news,** **weather reports, on-line databases, etc. For services such as**
**travel information or information about the times of various events, one of the**
**possibilities often offered by electronic commerce is direct booking.**

**•** _**Professional teleservices:**_ **professional services such as telemedicine and legal**
**advice afford an expert the opportunity of giving advice from his place of work to**
**his client's home with total interactivity between the two.**

**•** _**Home**_ _**banking:**_ **clients can obtain information about their accounts and carry out**
**financial transactions directly and at** **a** **distance via** **a/the** **network.**

**•** _**On-line**_ _**entertainment:**_ **this includes services such as on-line video games or**
**video-on-demand which would enable the consumer to order** **a** **programme** **or** **a film**
**at any time, watch it on his screen and manipulate its content (ranging from fast**
**winding or rewinding to making wholesale changes).**

**The range of services planned today is,** **however,** **just the tip of the iceberg. The common**
**advantages of all these services mentioned above could apply to virtually all currently**
**existing services:**

**1.** _**Greater proximity**_ _**to the**_ _**consumer:**_ **the ability to reach the consumer wherever he**
**happens to be and to afford him the opportunity of receiving information or**
**purchasing** **and/or** **receiving a** **product/service** **on the spot saves him the time and**
**trouble that are associated with** **a** **traditional service.**

**2.** _**Direct reaction of the**_ _**consumer:**_ **inasmuch as the link and the exchange of**
**information between the service receiver and the service provider can be much**
**more intense, the service provider can gain a much better idea of** **his** **client's profile**
**and hence personalise his offer.**

_3._ _The_ _instantaneous_ _universal scope and internationalisation of the geographic_
_**market:**_ **since physical distance no longer matters in the case of an on-line**
**connection, the service provider can just as easily reach a client on another**
**continent as in the next street.**

**Any attempt to name or categorise the services would, by definition, be** **artificial,**
**incomplete** **and** **extremely temporary as it would necessarily be based on the markets,**
**products, services and economic realities of** **today** **which are likely to change tomorrow.**
**The forecasts of the various types of Information Society service which might be made**
**available in future are constantly being updated. Depending on their purpose, various**
**categories are drawn up, based, for example, on the features of the application**
**(professional, consumption-related, educational or healthcare, etc.) or on the type of**
**medium (PC, TV, etc.) or distribution network (satellite, cable, telephone, wireless,**

terrestrial, copper/fibre, CD-ROM, interactive kiosks, [5] the Internet, [6] etc.). None of them
is, however, really satisfactory and lasting in view of the fact that no limit to the potential
of the Information Society of tomorrow can be determined with sufficient clarity today.

_At the regulatory_ _level,_ the first conclusion to be drawn is that the scope of the regulatory
sphere will necessarily be as wide as that of the economic sphere.

_**2.**_ _**A**_ _**gradual development**_ _**of**_ _**markets**_

The Information Society will not start with a "big bang". Although the possibilities are
enormous, Information Society services are emerging only gradually. New applications
are constantly being developed and tested (on-line shopping, telebanking, distance
education, video-on-demand, etc.) and pilot projects financed by private and public funds
are being launched throughout the world. The reason for this gradual development is the
length of time it takes service providers to respond to the many challenges, in particular:

- _Attracting the_ _consumer:_ resistance to change has to be overcome, especially in the
case of services intended for those categories of consumer who are the least aware
of the new technologies (e.g. the older generation as opposed to the younger
generation, the mass market as opposed to the business market).

- _Finding means of payment:_ the services will not be able to expand until payment
mechanisms have been developed which facilitate easy and direct electronic
payment. Thus, it is those services for which the method of payment is the most
simple (e.g. services provided on closed networks) that are developing the quickest.

**•** _**Finding and developing**_ _**commercially**_ _**exploitable applications of**_ _**technologies:**_
services based on the most advanced technologies will take off only when the
application of those technologies becomes commercially viable and/or sufficiently
widely available for the consumer to be ready to pay the asking price for the new
service.

- _Redesigning_ _distribution:_ if the product needs to be physically transported or if a
complementary service has' to be performed manually, a completely new
distribution concept must be developed whose advantages are on a par with those
of speed and proximity offered by the Information Society services.

- _Overcoming regulatory_ _obstacles:_ the unsuitability of the national legal framework
(see below) will in many cases make it expensive to develop services owing to the
legal uncertainty or the need to find favourable regulatory niches, and in some
cases will even make such development impossible.

Computers to which the public have access, normally specific to one company, affording access to
information via a choice of menus, under the control of the user. Possibility of live video
conference with an "expert" from the kiosk.
An ownerless open system based on the ARPANET network originally ordered by the US Defense
Department in 1969. Its core structure is currently managed by Advanced Network & Services
(ANS), this system in its present form serves some 4 million users and provides E-mail access to
at least 30-40 million individuals over more than 160 countries. In some parts of Europe, the
number of users of the network has increased by more than 1 000% in the last three years.

6

- _Defining schemes_ _**for rendering operators**_ _liable :_ **it will** be **important** **to**
**differentiate between the obligations of providers of on-line services networks or**
**cable networks and those of providers of services and editors of the content, and to**
**set out the ethical and moral rules which** **the** **latter must observe.**

**The opportunities and challenges are evolving and are perceived differently by operators**
**in the various areas of economic activity, and it is impossible to determine exactly at this**
**stage which** **application/technology** **combinations will give rise to profitable markets and**
**precisely how profitable those markets will be. The first applications are and will be**
**those for which the necessary adaptations are the most simple and least costly (e.g.**
**electronic publishing, personalised interactive news, on-line marketing, etc.) and/or for**
**which the benefits to the consumer should be the greatest (e.g. electronic shopping,**
**on-line financial services, distance teaching, medical services provided at a distance,**
**video-on-demand, etc.). With the passage** **"of** **time, however, a growing number of**
**"traditional" services will be modernised and redesigned and entirely new services will**
**be developed.**

_**At the regulatory**_ _**level,**_ **the gradual nature of** **the** **development of the market means that**
**the new regulations will not come into being all at once, there being instead a strong**
**likelihood that they, too, will be spread out over** **a** **period of time.**

_**3.**_ _**Géographie**_ _**differences in**_ _**the**_ _**development**_ _**of the**_ _**new markets**_

**At the European Union level, it can be expected that there will be different levels of**
**development of Information Society services from one Member State to** **another..** **There**
**are various reasons for this :**

- _differences between_ _Member States_ _in the level of diffusion of information_
_**technologies**_ _**,**_ **broadly reflected in the graph below by the** **IT** **quotient (by which**
**the country which has the lowest quotient would theoretically have the highest**
**penetration** **levelYor** **computers and telecommunications, and the highest levels of**
**economic activity);**

- _differences between_ _Member States_ _in the growth of the information technology_
_**markets.**_ **Given that national markets are not developing at the same rate, the**
**differences between Member States** **will** **diminish in some cases and increase in**
**others;** **[8 ]**

IT quotient = (OE + PM + CP + PC + TP + FM + PG)/(GDP*Host*NSF). OE representing total
expenditure on office equipment in 1990 (in US$); PM representing the number of mailings in
1990; CP representing the number of new cellular telephone subscribers in 1994; PC representing
the number of computers in service in 1993; TP representing the number of telephones in 1990;
FM representing the number of fax machines in service in 1992; PG representing the number of
pagers in service in 1992; GDP representing gross national product per head in 1995 (estimates in
US$); Host representing the number of computers connected to the Internet in October 1994; NSF
representing the sum of the net income and expenditure of the NSF in 1994, in US$ millions.
See the table on the rate of growth in information technologies by region between 1990 and 1994 in
OETI, already cited, p. 357.

**7**

_**differences between**_ _**Member States**_ _**in the types of service that will develop,**_
reflecting differences in the current characteristics of the market due to historical,
socio-political, demographic, geographical and technological factors. This
difference in the characteristics of the underlying markets is already apparent (e.g.
the degree of interest shown in the market for Minitel services in France and that
shown in advanced satellite television services in the United Kingdom) and is
mirrored in the available information infrastructure (e.g. the different use made of
cable distribution and of the telecommunications network, as illustrated below by
the penetration of connections via the Internet).

IT quotient [9 ]

**10**
Internet connections pçr 1 _QW_ inhabitants

_At the regulatory level,_ this differing development of services across geographic markets
will in all probability be translated into different national regulatory approaches.

_4._ _An_ _inevitable_ _growth in the_ _level cross-border services_

Information Society services differ from "traditional" services in that they can be
provided regardless of the distance between the consumer and the provider. Exploitation
of this inherently cross-border nature will be essential to the development of Information
Society services owing to a combination of the following factors:

- _attaining critical mass and reducing marketing costs:_ whereas in the case of
"traditional" services the advantages connected with the cross-border provision of
services and trade in goods in a wider geographic market often remain unexploited
owing to the cost involved (time, transport, distribution, collection of data, etc.),

**10**

Eric Arnum, "Internet Cross-Subsidisation: Traffic, Spending and Government Spending on the
Internet. A close-up study of the commercialization of the Internet and the growth of the NSFnet
Backbone Service from January 1993 to January 1995", Report to the Commission of the
European Communities, 1995.
Source: Société Internet. Observatoire Européen de l'Audiovisuel.

8

**Information Society services, by abolishing the distance factor, considerably reduce**
**this cost (to an extent which** **depends** **on whether or not the products need to be**
**delivered or interpretation costs, etc.);**

**•** _**meeting specialised requirements and targeting niche markets:**_ **the interaction**
**between the service provider and the individual consumer enables the provider to**
**gain a competitive edge by** **meeting,** **as closely as possible, the** **needs** **of individual**
**consumers. As a result, the consumer increasingly expects to be able to find**
**products/services which precisely meet his requirements. For the service provider,**
**this** **means that specialisation** **and** **personalisation are** **increasingly** **important.**
**Generally speaking, small service providers will have to exploit the global**
**geographic market in order to create economically viable niches. Larger service**
**providers active in markets for more standardised products/services might offer a**
**higher level of personalisation if** **the** **service is itself** **adaptable** **(e.g. information or**
**education services); in** **the,** **case of services which have relatively fixed**
**characteristics (e.g. video-on-demand, on-line shopping, etc.), it will be necessary**
**to offer** **a** **wider range of choice if** **service** **providers are** **to** **justify their subscription,**
**that is to say to offer "bouquets" of** **services.** **In all these cases,** **the** **possibility of**
**covering a wider geographic market becomes a crucial requirement.**

**•** _**accessing niche markets across**_ _**frontiers:**_ **the Information Society has started to**
**develop in each Member State, but more among some segments of the population**
**than among others (e.g. the younger generation as opposed to the older generation,**
**business users as, opposed to private users, etc.). It follows from this that the**
**nationality of** **the** **market matters less than the segment of** **the** **market, and that, in**
**order to be able to achieve a big enough market to make the provision of services**
**commercially viable, these segments will have to be reached and accessed as a**
**niche market across national frontiers.**

**The consumer will be quick to demand these cross-border services owing to their positive**
**impact:**

**•** _**Much easier and wider access to all services/products existing in the**_
_**European**_ _**Union:**_ **thanks to a substantial reduction in the cost of searching for**
**products and services within the Union, markets which used to be inaccessible due**
**to their remoteness are rendered as accessible as domestic markets.**

**•** _**A**_ _**reduction**_ _**in the**_ _**cost of**_ _**the**_ _**service**_ _**provided:**_ **in view of the increased competition**
**between service providers and the resulting greater ease with which prices can be**
**compared, downward pressure will** **be** **exerted** **on** **price** **levels.**

**•** _**New, more specialised/personalised services:**_ **thanks to the geographic market**
**being wider, consumers will be able to link** **up** **to more specialised and personalised**
**services (e.g. information services or education services tailored to the consumer's**
**individual requirements) and there will be a greater number of new**
**products/services** **from** **which to choose.**

_**At**_ _**the**_ _**regulatory**_ _**level,**_ **the need for the cross-border development of** **services** **underscores**
**the fact that it is essential that the** **frontier-free** **area be fully guaranteed.**

**B.** **The current** **legal** **framework of the** **Internal** **Market**

**The European market for services is not developing at present in a legal vacuum. The**
**existing body of law governing the Internal Market already constitutes a basic legal**

**framework.** **Full** **and** **effective** **application of the principles of the freedom of**
**establishment (Articles 52** _**et**_ _**seq.**_ **of the Treaty) and the** **freedom** **to provide services**
**(Articles 59** _**et**_ _**seq.**_ **of the Treaty) and of the existing secondary legislation** already
enables Information Society services to benefit from the opportunities afforded by the
area without internal frontiers.

_**Article**_ _59 of_ _**the**_ _**Treaty,**_ which lays down the principle of the freedom to provide
services, [11] plays a key part in facilitating and encouraging the creation of a critical mass
of cross-border services transported along the information superhighways. As is
explained in the "Commission interpretative communication concerning the free
movement of services across frontiers", [12] this principle prevents a Member State from
restricting the freedom to provide services originating in another Member State.
According to Article 59 and the case-law of the Court of Justice, a service must comply
with the law, and is subject to the control, of the Member State of origin, that is to say,
that in which the service provider is established. Owing to this country of origin control
system and the system of mutual recognition that flows from it, providers of Information
Society services will therefore in principle not be obliged to apply different regulatory
provisions depending on the final destination of the services, as this would, in a Union of
15 Member States, purely and simply be tantamount to denying the existence of an area
without internal frontiers. There will, however, be a need for harmonisation where
application of the law of the country in which the service is received is justified for
reasons relating to the public interest. [13] In this case, it will be necessary to establish a
level of protection of the public interest that is equivalent among all Member States so as
to remove such a legal barrier.

An approach based on effective application of Article 59 and of the country of origin
control system (mutual recognition) will reduce the need for secondary legislation. In
many cases, direct application of Article 59 will indeed suffice to prevent Member States
from restricting the freedom to provide Information Society services. It is only where a
restriction is justified in the light of the case-law of the Court of Justice that secondary
legislation might be necessary. In other words, the stricter the application of Article 59,
the less need there will be for Community rules.

_Article 52 of_ _**the**_ _Treaty_ is also relevant as far as Information Society services are
concerned because it guarantees the providers of such services the benefit of the right of
establishment. This means that a provider of Information Society services who is

**H**
The concept of service is defined in Article 60 of the Treaty: "Services shall be considered to be
'services'... where they are normally provided for remuneration, in so far as they are not governed
by the provisions relating to freedom of movement for goods, capital and persons.". In addition,
Article 59 states that the principle of freedom of movement applies to cross-border services: "...
restrictions on freedom to provide services within the Community shall be progressively
abolished ... in respect of nationals of Member States who are established in a State of the
Community other than that of the person for whom the services are intended.".
OJC 334,9.12.1993, p. 3.
Restrictions on freedom to provide services may be justified under certain conditions:
discriminatory restrictions may be justified only on the grounds set out in Article 56 of the Treaty
and subject to respect for the principle of proportionality; non-discriminatory restrictions may be
justified by overriding reasons relating to the general interest. Any restrictive measure must, all
the same, be proportional to the objective pursued (the measure must be appropriate and not go
beyond what is necessary for attaining that objective).

10

**established in one Member State and who wishes to establish himself** in **other**
**Member States should not be subject to discriminatory** **restrictions,** disguised
discriminatory restrictions, or, in certain cases, non-discriminatory restrictions.

_**The secondary**_ _**legislation**_ _**governing the Internal Market**_ already comprises a number
of Directives which will play a major part in the development of Information Society
services. These Directives are intended, as are all "Internal Market" Directives, to.
safeguard the general interest, to the extent necessary to remove obstacles to the Internal
Market, by establishing an equivalent level of protection in all Member States.

Reference may be made in particular to the recent _Directive_ _95/46/EC on_ _the_ _protection_
_of_ _individuals with_ _regard to the processing of personal data_ _and_ _on_ _the_ _free_ _movement_ _of_
_such_ _data,_ _[14]_ which shows the "value added" of Internal Market legislation in terms of the
protection of fundamental rights in the Information Society, in this case the right to
privacy. Although this Directive has a scope which extends well beyond the Information
Society, it nonetheless represents a key stage in the establishment of its legal framework
inasmuch as the protection of personal data is an issue deemed crucial to the development
of Information Society services. It also represents a substantial step forward in the drive
to promote confidence in the new services among ordinary citizens. As information
technology develops, the Commission will consider and, if appropriate, propose such
additional measures as may be necessary. Mention should also be made of the proposal
for a Directive on the protection of personal data and privacy in the context of digital
telecommunications networks, in particular the integrated services digital network and
digital mobile networks, [15] which governs the specific problems connected with digital
telecommunications networks.

With regard to intellectual property, several Directives will play a key role, in particular
_Directive 91/250/EEC_ _on_ _the_ _legal protection_ _of_ _computer_ _programmes,_ [16 ]

_Directive 92/IOO/EEC_ _on rental right and on lending right and on certain rights related_
_to copyright in the field of_ _intellectual_ _property,_ [ 7] _Directive_ _93/83/EEC on the_ _co-_
_ordination of certain rules concerning copyright and rights related to copyright_
_applicable_ _to_ _satellite broadcasting_ _and_ _cable_ _retransmission,_ and _Directive_ _93/98/EEC_
_harmonising the_ _term of_ _copyright_ _and_ _certain_ _related_ _rights._ [19] _Directive_ _96/6/EC_ _on the_
_legal_ _protection of databases_ _[20]_ is also of fundamental importance and might serve as a

**14**

**15**

**16**

**17**

**18**

**19**

**20**

Adopted on 24 October 1995.
Amended proposal COM(94) 128 final of 13 June 1994. See also Article 22(4)(d) of the proposal

for a Directive on the application of open network provision (ONP) to voice telephony, common
position of 12 July 1995 (OJ C 281, 25.10.1995, p. 19).
OJ L 122, 1.5.1991, p. 42. It is of particular importance because computer programs are
fundamental to the information superhighways. The Directive grants copyright protection to
computer programs _qua_ literary works.
OJL 346, 27.11.1992, p. 61.
OJ L 248, 6.10.1993, p. 15. It lays down common rules on copyright, notably with regard to the

collective administration of rights, of which certain elements may prove relevant to the legislative
proposals concerning the information society.
OJ L 290, 24.11.1993, p. 9. It is a cornerstone of the legal framework needed to protect the works

and performances which will be broadcast on the information superhighways.
OJ No L 77, 27.3.1996, p.20. Adopted on 11 March 1996, this Directive seeks to harmonise

copyright as it applies to the structure of databases in whatever form, whether on-line or off-line,
and to introduce a new economic right protecting the substantial investment by the manufacturer
of a database.

11

basis for any future additional initiative concerning those aspects of copyright and related
rights which relate to the Information Society.

**The** _**Green Paper on**_ _**"copyright**_ _**and related rights in the**_ _**Information**_ _**Society''**_ _**[11]**_ **is an**
initial response to analyses which have identified the intellectual property field as one of
the key regulatory fields as far as the emergence of the Information Society is concerned.
The specific character of digital technology, which makes it possible to transmit and copy
a large amount of data much more easily than in the traditional analogue environment,
brings with it specific risks. Without adequate protection, it is difficult to ensure that a
work or service is not copied, modified or exploited unbeknown to, and to the detriment
of, the rightholder. The Green Paper seeks to launch a wide-ranging consultation
exercise with a view to determining future policy in this area.

_**The Green Paper on**_ _**"legal protection**_ _**for encrypted services in the**_ _**Internal**_ _**Market'***_ _**[11 ]**_

surveys the problems stemming from the regulatory disparities between Member States
in relation to the protection of such services against piracy and the risks to the
functioning of the Internal Market which might arise therefrom in the context of the
Information Society. The Green Paper mentions the possibility of Community action
aimed precisely at harmonising national laws in this field.

_**The Green Paper on**_ _**"commercial communications**_ _**in the**_ _**Internal**_ _**Market'***_ _**[2]**_ _*****_ **discusses**
the various forms of advertising, direct marketing, sponsorship, sales promotion and
public relations that are intended to promote products and services and their prospects for
future development in the context of the advent of the Information Society. The Green
Paper examines the extent to which national rules, though not discriminatory, are
nevertheless capable of hampering cross-border activity, notably on networks, in this type
of service, and proposes a method for assessing the proportionality of such rules and
improving co-ordination between possible initiatives at Community level.

**The** _**proposal for a**_ _**Directive**_ _**on**_ _**contracts negotiated**_ _**at a**_ _**distance**_ **will assume, as far**
as the protection of consumers is concerned, obvious importance in relation to some new
services, notably electronic commerce.

**Lastly,** _**Directive 89/552/EEC**_ _**on**_ _**"television**_ _**without frontiers''**_ _**[15]**_ **guarantees the free**
movement of television broadcasts, and these will also benefit from the cross-border
broadcasting facilities made available by the new Information Society technologies. This
Directive covers so-called conventional television broadcasting services as well as "pay
per view" or "near video on demand". The present initiative does not prejudge the
discussions within the European Parliament and the Council on the review of the
Directive, including its scope. In so far as some new services would be included within
the Directive's scope, these services and the draft rules relating thereto will not be
covered by the transparency mechanism in view of the fact that the prior notification

**21**

**22**

**23**

**24**

**25**

COM(95) 382 final of 19 July 1995.
COM(96) 76 final of 6 March 1996.
COM(96) 192 final of 8 May 1996.
Proposed revision, OJ C 308, 15.11.1993, and OJ C185 of 19.7.1995, p4.
OJ L 298, 17.10.1989, p. 23. Proposal for an amendment dated 31 May 1995, COM(95) 86 final;;
Modified proposal. COM(96)200 of 7.5.96; Common position of 8.7.1996 and Communication
form the COMMISSION AND THE Parlaiment S.EC(96)1292 on the Common position.

12

**procedure does not apply** _**inter alia**_ **to national rules implementing a Community**

**Directive.**

**13**

**II.** **THE WEED FOR** **A TRANSPARENCY MECHANISM**

**The need for a transparency mechanism stems from the regulatory activity that will gain**

**momentum at national level in the years ahead with a view to regulating** **Information**

**Society services; if it is not co-ordinated, this regulatory activity might lead to the**

**Internal Market being called into question, notably through a refragmentation of the area**

**without internal frontiers.**

**In addition, a problem of discordance arises between, on the one hand, the limited**

**territorial scope of national rules and, on the other, the transnational dimension of the**

**new interactive services which, as a result, need to be discussed extensively and call**

**above all for co-operation at Community level.**

**A.** **The outlook** **for** **regulatory activity in the Member States**
**Developments in Information Society services** **will** **be reflected at the legal level by new**

**regulatory needs. The setting-up of think tanks in the Member States and the many**

**official reports and studies that have been commissioned at national or Community level**

**lead to the same conclusion: the Information Society necessitates regulatory action on a**

**broad front aimed at adapting the current legal frameworks.**

**1.** **Preregulatory mobilisation in the Member States**

**In a number of Member States, work has** **begun** **on analysing and assessing future**
**regulatory needs in the Information Society.** **[26]** **This is symptomatic of the beginnings of**

**regulatory activity. In the light of the information in the Commission's possession, the**

**work in hand may be summed up as follows:**

**26**
The following studies can be cited by way of example: Thierry Breton: "Les télé-services en France.
Quels marchés pour les autoroutes de l'information?" Officiai report to the Minister of State, the
Minister for the Interior and Regional Development and the Minister for Enterprise and Economic
Development (France, December 1994); Jean-Marc Detailleur: "Evolution de la presse écrite dans
la perspective des nouvelles technologies multimédias". Report to the Minister for
Communication (France, December 1994); Gérard Théry: "Les autoroutes de l'information";
Report to the Prime Minister (France, July 1994); "Industries culturelles et nouvelles techniques";
Report by the Committee chaired by Mr Sirinelli, Minister for Culture and the French Language;
Prognos AG: "Digitales Fernsehen-Marktchancen und ordnungspolitischer Regelungsbedarf,
commissioned by the Bayerische Landeszentrale fur neue Medien (Munich, January 1995);
Coudert Brothers: An overview and analysis of the legal and regulatory barriers to the take-off of
multimedia applications in preparation for the infrastructure Green Paper (Report to the
European Commission, December Î 994): The Danish Government report on the Information
Society year 2000; Actieprogramma Electronische Snelwegen "van metafoor naar actie" (Official
document of the Dutch Government, December 1994); "Wings to Human ability" (Official report
to the Swedish Government (August 1994)); Titan: Study of the regulatory framework of the
French-speaking community for the launching of multimedia experiments and workshops "Le
contrôle des accès et des droits" (Belgium, November 1994 and January 1995); "Creating the
superhighways of the future: Developing Broadband Communications in the UK" (presented to
Parliament by the President of the Board of Trade by command of Her Majesty: November 1994):
The Waterloo Report on "Transatlantic Dialogue on Broadcasting and the Information Society",
19- 21 May 1995; Informationsgesellschaft Chancen, Innovationen und Herausforderungen,
Festellungen und Empfehlungen. Der Rat fur Forschung, Technologie und Innovation, Dezember
1195; a number of recent resolutions of the International Communications Round Table (ICRT)
have also stressed certain regulatory needs.

**14**

***** _**Belgium**_

**Fifty or so individuals** **from** **various spheres of the communications industry are** **working**
**on "Titan", a project to introduce the new technologies in** **the French-speaking**
**community. À "legal" subgroup is examining certain questions, such as** **intellectual**
**property** **law,** **data** **security, the rules of evidence, consumer protection and the**
**safeguarding of privacy. A preliminary report for the Titan group on the regulatory**
**framework, drawn up in November 1994, states that a complete remodelling of the**
**existing regulatory system is extremely desirable, and expresses the hope that a thorough**
**review might ensure consistency among the rules and regulations governing these new**
**services. With a view to drawing** **up** **rules on interactive services, the "Conseil Supérieur**
**de l'audiovisuel" has been asked to analyse the issue and** **produce** **proposals. In the**
**Flemish-speaking community, talks** **are** **being held on draft** **amendments** **to** **a** **Decree of**
**4 May** **1994** **governing** **broadcasting/television** **in** **the** **context of the "Telenet Vlaanderen"**
**project.** **This is a project which is being carried out jointly by the Government,**
**quasi-public bodies and private enterprise and which is aimed at the new cable**
**distribution services.**

**•** _**Germany**_

**Several think tanks have been set up, either at Land or at federal level,** **[27]** **and are**
**examining among other things the specific question of the regulatory framework for**
**Information Society services and questions relating to data protection, crime prevention,**
**the protection of minors, intellectual property, the protection of consumers, encryption,**
**and media ownership.** **The German Christian-Democrat Party,** **and the**
**Social-Democrat/Bûndnis 90/Die Grtinen** **parties, have established think tanks** **[28]** **to study**
**the legislative issues** **and** **the need for adaptation of the rules. The Bundestag has decided**
**to set** **up** **a commission of enquiry to look into regulatory matters among others.** **[29]** **One of**
**the questions still outstanding is whether the new services come within the terms of**
**reference of the** _**Lander**_ **or of the Federal Government. Recently the** _**Lander**_ **agreed a**
**draft Treaty on on-line services (On-line Staatsvertrag) which is based on the**
**broadcasting Treaty** **(Rundfunkstaatsvertrag)** **between the** _**Lander.**_ **The draft contains**
**provisions on the taking-up of the activity, identification of the service-provider, editorial**
**responsibility, the protection of** **minors,** **advertising, sponsorship, the** **right** **to reply, data**
**protection, supervision, etc.** **For its part, the Federal Government has published**
**guidelines on a new multimedia law** **[31]** **which addresses issues relating to freedom of**
**access without a license, consumer protection, the publishing of supply and pricing**
**conditions, liability, the protection of minors, contract law including digital signature,**
**intellectual property** **rights,** **etc.**

**27**

**28**

**29**

**30**

**31**

For example, the "Forschungs- und Technologierat" of the Federal Government, a group of
representatives of the 16 _Lander_ and of the Federal Government; the "Petersberger Kreis", formed
by the Government and economic operators. Preliminary reports are expected for the autumn.
Cf., for example, the 12 media-policy demands of Bûndnis 90/Die Grtlnen of 9 and
10 September 1995, calling for rules on the new services in the areas of data protection, privacy,
minors, intellectual property and consumers.
In this context, attention has been drawn to the fact that the existing body of rules and regulations
should be slimmed down so as to be more in keeping with the new requirements.
Staatsvertrag Uber Mediendienste.
Statement vom Bundesminister Dr JUrgen RUttgers zu den rechtlichen Rahmenbedingungen ftlr
neue Informations- und Kommunikationsdienste  - Multimedia Gesetz - 2/5/1996.

**15**

_**Denmark**_

In October 1994 the Ministry of Finance, which is responsible for _"The_ _Information_
_Society_ _2000",_ presented a governmental report which concluded inter alia that the
Danish law on the protection of personal data should be revised and simplified to cope
with the changes brought about by the Information Society. The report asks that the
discussion on the various aspects of the Information Society be treated as a matter of
priority by Parliament and by local authorities, and that an action plan containing future
initiatives be drawn up.

**•** _**France**_

The "Minitel" and the development of "telematics" have made it possible to gain valuable
experience in the area of services provided at a distance. With a view to launching a
debate on the need for a new policy, in 1994 the French Government commissioned a
series of strategic reports on the various issues raised by the advent of the Information
Society. The _Breton Report,_ entitled "Teleservices in France", which was presented to
the Prime Minister oft- 11 July 1994, examines more particularly the question of the
development of new Information Society services and concludes that the rules and
regulations need to be adapted owing to the mismatch between the current instruments
and the new methods of organisation made possible by new technologies. The
_De_ _tailleur_ _Report,_ which was presented to the Prime Minister on 24 January 1995,
examines the implications of the new technological environment for the press. It points
out that some new situations involving the new services will uncover gaps in the law.
Any adaptations should be gradual and be the result both of analysis of the experiments
that are being carried out and of an ongoing study of the legal implications. The
_Sirinelli_ _Report,_ entitled "Cultural industries and new technologies", examines the impact
of new technologies on intellectual property law. The _Théry_ _Report,_ entitled "The
Information Superhighways", which was presented to the Prime Minister on
31 July 1994, examines the strategic implications for France of the information
superhighways. All these reports stress that regulatory activity will be necessary in those
areas that are already identified, without, however, specifying clearly either the content or
time-scale. On 26 March 1996 a Law, which came into effect immediately, was adopted
by Parliament with a view to launching experimental new services.

The Senate Standing Committee approved, in February 1995, a document entitled _"in_
_materia di_ _multimedialità",_ which describes in detail the Italian situation in this field.
The report, which analyses the French "Breton" and "Théry" reports, highlights several
regulatory issues (e.g. data protection, media concentration, advertising) and asks
whether adaptation of the existing laws is necessary.

10

**•** _**Luxembourg**_

On 4 May 1995 the Prime Minister announced to the Chamber of Deputies the setting-up
of a body to be known as the "Cabinet de l'information", within which the competent
Ministries are to co-ordinate, channel and centralise initiatives. Alongside this body,
there will be a "Comité d'accompagnement", consisting of representatives of the business
community and of the media and the communications industry, whose task will be to
make proposals and discuss ways of bringing about the Information Society. According
to the Prime Minister, many issues still have to be clarified, such as data protection, the
social consequences, copyright, etc. The Chamber of Deputies is to hold a wide-ranging
debate. In any event, it would appear that either a new regulatory framework will be
drawn up, or the existing regulatory framework will be adapted to take account of the
specific character.

_**Netherlands**_

In December 1994 the Government adopted an action programme _("Actieprogramma_ _[,r]_ _)_ to
accelerate the introduction of the Information Society. Although the document
concentrates on the infrastructure aspects, certain issues relating to the legal framework
for the services were identified: for example, the protection of personal data, encrypted
services, intellectual property and public policy (crime and ethics). The regulatory
review will be centred, not only on telecommunications legislation, but also on the
so-called "accessory" regulations governing identified areas. Particular importance will
be attached to the possibility of self-regulation in the service sector, which the
Government believes might accelerate practical applications. The competent Ministries
have set up interdepartmental working parties to implement the action programme. The
Dutch media authority ("het Commissariaat voor de Media") recently authorised the use
by television companies of the opportunities afforded by the new electronic media. The
authorisation covers, among other things, the interactive use of television, the publication
of electronic programme guides, the distribution of programmes on the Internet, the
exchange of information and direct marketing. It might also cover the supply of
video-on-demand and pay-per-view services. Lastly, a steering committee, composed of
representatives of several Ministries, has been set up to deal with any difficulties caused
by the existing rules and to co-ordinate the introduction of the new legal framework for
electronic services.

_**Smdm**_

The Government has appointed a commission to promote information technology. An
initial report entitled _"Wings to Human Ability"_ was submitted in August 1994. The
current legal situation is considered unsatisfactory. The report finds that a stable legal
framework in the areas of copyright, contract law, civil law, advertising, and the
safeguarding and protection of personal data is essential to the development of
information technologies. To produce a body of profitable services, particular attention
should be paid, among other things, to the law of contract and intellectual property law.
The aim of adjusting the rules and regulations should be attained in the course of the next
three years. An official committee has been set up to examine such matters as the
relationship between televised media, the new services and the law on the freedom of the
press. Concrete proposals should be made during this year.

17

**•** _**Finland**_

In early 1995 the Government published a report entitled _"Developing_ _a_ _Finnish_
_Information Society"._ Existing working parties, such as those on audiovisual law,
copyright law and multimedia law, might discuss problems connected with new services.
It would appear likely that Finland, which already has very liberal rules on media, will,
in the field of new services, base itself also on self-regulatory bodies, with the exception
of criminal acts governed by the criminal code. The general approach seems to be to
regulate as little as possible.

***** _**United Kingdom**_

**The report entitled** _**"Creating**_ _**the**_ _**Superhighways**_ _**of the**_ _**Future:**_ _**Developing Broadband**_
_Communications in_ _the_ _UK",_ prepared by the DTI and presented to Parliament in
November 1994, has identified an overriding need to create a stable, effective and
evolutive legal framework in order to increase the confidence operators must have if they
are to invest, and has found that particular attention should be paid both to the protection
of personal and industrial data moving on the networks and to adequate protection of
intellectual property rights. The document announced the creation of a Multimedia
Industry Advisory Group (MMIAG) composed of leading industrialists which is to
advise the competent Minister on the opportunities for, and obstacles to, multimedia
development. Subgroups are charged with examining _inter alia_ questions concerning the
legal framework in the identified areas and also that for medical applications. The
subgroup on intellectual property issues has expressed the view that the procedures for
conferring rights should be simplified for the new multimedia products, and recommends
that the laws on defamation and obscenity should be amended and that, following
proposals in the United States, a transmission right should be introduced to protect
copyright. Another interdepartmental working party was set up within the
Prime Minister's office to discuss the need for adaptation of the law in force, notably in
the areas of intellectual property and data protection law. In July 1995 a bill amending
the law and procedure relating to defamation was introduced (bill entitled "An Act to
amend the law of defamation and to amend the law of limitation with respect to actions
for defamation and malicious falsehood"). The bill includes electronic publishing in its
scope (section 1). At political party level, the Labour Party presented a report in July
**1995** **entitled** _**"Labour's**_ _**Policy**_ _**Forum**_ _**on the**_ _**Information**_ _**Superhighway",**_ **which refers in**
particular to the areas of consumer protection, copyright, the protection of minors, public
policy, piracy, data protection, marketing, and the rules of labour law and the law relating
to social security as they apply to teleworking, etc., and calls for regulatory action at the
domestic level.

2. New **regulatory needs**

In addition to specific areas, such as telecommunications, which are subject to specific
regulations at Community level, an analysis of these various activities reveals that new
rules, or legislative adjustments to the existing ones, will be needed often inasmuch as the
latter were not designed with Information Society services as such in mind. They were
meant for certain specific risks which may be attendant on existing services in relation to
certain general interest objectives (e.g. the protection of public health in the case of

18

**medical** **services, the protection of consumers or of pluralism in the case of television**
**services, the protection of competition or consumers in the case of telecommunication**
**services, etc.). Owing to their different characteristics, Information** Society services will
change, for better or for worse, **the** nature of the risk covered by the current rules. Thus,
_**compared with traditional**_ _**professional services**_ **necessitating** **movement on the part of**
the provider or receiver, services provided electronically at a distance may change the
type of risks to which consumers are exposed. Similarly, _compared with broadcasting,_
services meeting specific needs of the service receiver ("interactive" services) do not give
rise to the same problems in relation to the safeguarding of the public interest. For
example, unlike in the case of interactive services, the risks inherent in television
broadcasting are that, (a) once a programme has been broadcast, it is not possible to know
precisely who is in fact going to watch it, (b)the consumer is more passive in his
response to, or a captive of, the programme (as he cannot influence its content) and (c) it
is a "mass" medium. Conversely, interactive services give rise to other risks owing
precisely to the level of individualisation of the special relationship between the provider
and the receiver of a service (privacy, consumer protection, etc.).

To counter these various risks, regulatory changes will be needed to ensure, where
appropriate, better protection or, on the contrary, to loosen the existing constraints. In
some cases, one short-term solution for national authorities will be to use their power of
interpretation to find solutions. These solutions might, however, be variable and open to
challenge and may thus themselves trigger intervention by the legislator. Moreover, in
many cases, the current rules do not leave sufficient room for manoeuvre for it to be
possible to avoid the need for legislative intervention.

_**a.**_ _**The need**_ _**for**_ _**new forms**_ _**of**_ _**protection**_

The current rules are attuned to serving the needs of existing service activities (e.g.
professional services, telecommunication services, television broadcasting services), but
will not necessarily be so in the case of the new services and might therefore need to be
strengthened or supplemented.

_Improving_ _the_ _existing protection._ The rules in force pursuing a general interest objective
may need to be adapted in order to ensure more effective protection of that interest
against the new risks created by Information Society services. In this case, the aim will
be not to pursue a new general interest objective, but to ensure better protection of an
objective that is already recognised.

This better protection might be brought about by an _adaptation_ of the applicable laws
aimed at increasing the level of the existing protection. In view of the fact that
Information Society services will consist in providing, in a different form, services which
already exist and are already regulated, it is likely that numerous adaptations of these
rules will be necessary. Thus, for example, bearing in mind that the services will be
provided at a distance, the current rules governing professional services (health care, etc.)
might not be sufficient in relation to identification and the qualifications of the service
provider (difference between a consultation in a hospital and a consultation at a distance).

The improvement in protection might also consist in _extending_ _the spectrum of the laws_
applicable to a particular activity. Thus, services which were traditionally subject to a set

19

**of clearly delimited legal rules might be made subject to sets of rules applied to other**
**legal categories so as to ensure fuller protection. For example, in the case of audiovisual**
**services such as video-on-demand, compliance with specific provisions on data**
**protection might, where appropriate, be provided for (bearing in mind that interactivity**
**makes it possible to** **identify** **the user and hence gives rise to risks as far as the protection**
**of privacy is concerned), whereas the rules on television traditionally do not cover such**
**risks.**

_**Protecting new areas of public interest.**_ **Besides adapting the rules with a view to**
**attaining more effectively the objective they pursue, it might be necessary to meet new**
**general interest objectives.** **Thus,** **for** **example, the current discussions about the**
**virtuality of the Information Society might trigger a regulatory response aimed at**
**ensuring a degree of veracity.**

_**b.**_ _**The need to scale down existing forms of protection**_
**Conversely, some existing rules might become unnecessary or disproportionate and will**
**have to be rendered inapplicable to the new services or made more flexible.**

_**Stopping the applications of rules which are misapplied.**_ **In view of the fact that the**
**services will be at a cross-roads between different legal categories, some of them might**
**be subject to rules which were clearly not intended to cover this type of activity.**
**Legislative intervention will therefore be necessary in order to remove the services**
**concerned from the scope of the rules in question. It would, for instance, be appropriate**
**to assess whether, and if** **so,** **to what extent laws on television broadcasting are applicable**
**to Information Society services.**

_**Adapting disproportionate rules.**_ **Other services might be subject to certain constraints**
**which will be out of proportion to the legitimate objective they pursue. This might**
**involve either a type of obligation which is out of keeping with Information Society**
**services, or measures which go further than is necessary to attain their objective. Thus,**
**for example, while the protection of minors is, of course, a fundamental aim, it might be**
**inappropriate (and perhaps contrary to Article** **10** **of the ECHR) to provide, as in the case**
**of television broadcasting (where there can be no safeguards as to "who watches what"),**
**for a total ban on services intended for adults.** **[32]** **To take another example, the obligation**
**to draw up a written contract before concluding a sale is not appropriate in the case of**
**electronic commerce.** **Similarly, the prior authorisation or licensing arrangements**
**applicable to telecommunication or broadcasting services might not be suited to**
**Information Society services (bearing in mind, in particular, that other arrangements,**
**such as those applicable to the press, might afford more effective protection).**

**32**
Interactivity and the technical means by which a user will have access to aie new services might
increase the opportunities for parents to control access by minors to violent or pornographic
programmes. The broadcasting rules on the protection of minors are therefore not necessarily
appropriate, the risk of uncontrolled access by minors being much greater in the broadcasting

context.

**20**

**3.** **A wide-ranging and** **drawn-out** **regulatory adjustment**

The political mobilisation in the Member States around the Information Society theme
and the development of the market for services will necessarily have an impact on the
scope of regulatory activity at national level.

_**(a)**_ _**A broad spectrum**_ _**of**_ _**rules**_ _**and**_ _**regulations**_

Owing to the wide variety of services involved, a multitude of legal fields will be
affected, in particular _the law governing the press_ (should, for example, the specific
arrangements governing the press, such as the principle of editorial responsibility, be
**applicable?),** _**the law**_ _**governing**_ _**telecommunications,**_ _**civil**_ _**law,**_ _**[33]**_ **in particular the law of**
contract, [34] the _law governing audiovisual services_ _[35]_ (for example, must there be a prior
authorisation system, or should the traditional rules on pluralism apply?), _labour law_ _and_
_the law relating to social security_ _[36]_ (for example, what arrangements should apply to
teleworking?), _tax_ _law_ _[37]_ (for example, which new services might qualify for tax
incentives?), _criminal_ _law_ _[3]_ _*_ (for example, what arrangements and procedures should be
laid down for offences?), _banking and financial law_ (for example, what arrangements
should apply to distance banking, insurance or stock exchange services?), [39] the _law on_
_**commercial**_ _**communication**_ **and, lastly, the** _**rules governing the professions**_ **(for**
example, what arrangements should apply to the provision at a distance of legal or
medical services?).

These provisions will pursue a variety of general interest objectives: _freedom of_
_**expression,**_ **the** _**protection of privacy**_ **(all services), the** _**protection of**_ _**minors,**_ **the**
_protection of the consumer_ (for example, electronic sales service), the _protection of_
_intellectual_ _property,_ the _protection of_ _health_ (for example, telemedicine services), the
_protection of_ _culture_ _or_ _language_ (for example, teaching service), etc.

Certain specific questions have already been identified, in numerous governmental
studies and reports, as being the first that will have to be dealt with, such as those of _data_
_**protection,**_ **the** _**protection of intellectual property**_ **and** _**the**_ _**protection**_ _**of**_ _**consumers**_ **and** _**of**_
_minors,_ and the protection of, and arrangements applicable to, the _encryption_ of services.

**33**

**34**

**35**

**36**

**37**

**38**

**39**

**40**

See the Swedish report entitled "Wings to Human Ability".
The question is already being examined by notaries in some Member States. See Revue de

l'Assemblée de Liaison des Notaires de France n [6] 6, 1995, and Bundesnotarkammer,
Elektronischer Rechtsverkehr, Cologne 1995.
See the Prognos study; the Detailleur Report; "the Waterloo Report"; the Coudert Brothers report;

the study entitled "Information Society: Access and Pluralism", International Federation of
Journalists, March 1995.
See in this connection the study by Thierry Breton entitled "Le télé-travail en France: Situation

actuelle, perspectives de développement et aspects juridiques".
Thierry Breton "Le télé-travail en France: Situation actuelle, perspectives de développement et

aspects juridiques"; Thierry Breton: "Les télé-services en France. Quels marchés pour les
autoroutes de l'information?"; Jean-Marc Detailleur: "Evolution de la presse écrite dans la
perspective des nouvelles technologies multimédias".
See _inter_ _alia_ the Dutch Government's report: Actieprogramma Electronische Snelwegen "van

metafoor naar actie".
See reports by Thierry Breton "Les télé-services en France" and Gérard Théry "Les autoroutes de

l'information".
See Prognos study, Détailleur Report, and the Coudert Brothers report.

21

_**(b)**_ _**A vague**_ _**and**_ _**very drawn-out timetable**_
Analysis of the market for services has shown that there will be no "big bang" and that
the services will develop gradually. Accordingly, the regulatory response will also be
staggered so as to keep pace with the development of the market and deal with the
various questions as and when they arise. The national regulatory framework for
Information Society services will therefore be evolutive in nature.

No precise timetable has been set. As a rule, the studies and reports confirm that thinking
in the vast majority of Member States - apart from Germany - is not yet focused on
specifics, and stress that it is difficult to fix a timetable for adapting laws. Some reports
provide pointers only to the making of the first specific regulatory adjustments. [41] Thus,
the Netherlands wishes to review its legislation on data-related offences before the end of
1996, and Sweden wishes to adjust its legislation within the next three years. Moreover,
economic analyses reveal that new services which cannot yet be imagined might, in
future, arrive on the market as technological progress is mastered and the market
develops. It is all the more difficult to imagine today what the regulatory needs will be
for such services.

There is much uncertainty about the content of the rules and regulations which might be
necessary in the future. National and international experts have identified the relevant
areas, but often do not make proposals for the necessary course of action that should be
followed and the specific provisions that should be laid down. In view of the societal and
political issues at stake as revealed by the intensity of the political mobilisation, and
leaving aside cases where rules and regulations are adopted as a matter of urgency in
response to a given situation, regulatory solutions will be particularly complex to work
out and in some cases may spark a lengthy debate which might Continue into the next
millennium.

Recourse to pilot projects is one method of regulatory intervention which is especially
popular in France and Germany. [42] It consists in intervening initially solely with a view to
establishing interim or ad hoc exceptional arrangements, intended to permit the
development of pilot projects involving Information Society services. The follow-up to,
and analysis of the experience gained from, these pilot projects will enable the legislator
to have a better overall view and, subsequently, to regulate. fully these new services.
Thus, the actual regulations would come into being only after a fairly long period,
depending on the time it takes to draw reliable conclusions from the pilot projects. This
pragmatic "exception/pilot project/monitoring/new rules" method could become one of
several short-term regulatory approaches making it possible not to legislate prematurely
while remaining in a posture of regulatory readiness whereby any action may be taken
advisedly.

**41**

**42**

**43**

See _inter_ _alia_ the Swedish report "Wings to Human Ability", the Dutch report "Actieprogramma
Electronische Snelwegen" and "The Danish Government Report on the Information Society Year
2000".

A bill is being drafted with a view to introducing exceptional arrangements lasting five years aimed
at enabling 170 pilot projects to be carried out.
A period of five years is envisaged in France.

22

**Lastly,** **the scenario** **of a** **permanent** **or** **continuous regulatory** **adjustment** **is** **also possible**
given the potential versatility **of technological developments and societal** **values.**

**B.** **The risks to the functioning of the Internal Market**
The regulatory activity for which the ground is being prepared in the Member States
might, if it is not monitored, jeopardise attainment of the Internal Market objective.

**1.** **Risk** **of refragmentation** **of** **the Internal Market**

If nothing is done to co-ordinate the formulation of the new national rules and regulations
applicable to Information Society services, there is a strong likelihood that those rules
and regulations will be different, if not divergent, from one another. Such a state of
affairs would lead to new restrictions on the free movement of Information Society
services between Member States since one Member State could limit or prohibit the
provision of a service originating in another Member State by making it subject to its
own national rules and regulations. In the light of the law governing the Internal Market,
and in particular Article 59, some of these measures might not be justified whereas others
would be. In the former case, the Commission would have to intervene to induce the
Member State to abolish the legal barrier thus raised, while in the latter it would have to
propose, if necessary, harmonisation of the laws in question in order to safeguard
freedom of movement. Until the effects of this action made themselves felt, in either
case the European Information Society services industry would be unable to benefit from
a genuine area without internal frontiers and might be dissuaded from undertaking the
investment which is essential to its competitiveness. A number of reasons militate in
favour of this negative scenario.

_**Reasons relating to the**_ _**development**_ _**of**_ _**the**_ _**market.**_ **Analysis of the market for new**
services shows that its development will be gradual and of a variable-geometry nature,
that is to say different from one Member State to another. This means that the regulatory
reactions will be forthcoming at different times depending on the Member States and will
be directed towards different sendees. Thus, for example, a particular Member State in
which the professional services of telemedicine are destined to develop rapidly might
therefore regulate such services, whereas at the same time another Member State could
regulate electronic commerce and distance betting services owing to the scale of an
operator's activities on the domestic market.

_**Reasons**_ _**relating to**_ _**national traditions**_ _**and**_ _**culture.**_ **National laws are expressive of a**
whole set of economic, cultural, social and political values and traditions which vary
from one Member State to another. Experience shows that the regulatory approach, in
any field, is based on these different concerns and may even lead to regulatory reflexes.
This means, first, that those issues which are prime candidates for regulation will vary
from one Member State to another (for example, some Member States might place the
emphasis on safeguarding national culture, others on consumer protection, and others still
on the protection of minors and the upholding of moral standards) and, secondly, that on
one and the same specific issue the content of the rules and regulations will also vary (for
example, national approaches to the protection of minors, data and consumers already

**44**

See, for example, Prognos study, pp. 143 _et_ _seq._

23

differ considerably, reflecting the diversity of sensitivities, perceptions and objectives
peculiar to each country).

_Reasons_ _**relating to the original legal**_ _**arrangements.**_ **The national legal** **arrangements**
that will have to be adapted already differ from one Member State to another.
Consequently, the adaptations will pursue their own intervention logic, and this might
amplify the current disparities. Thus, for example, the German-law concept of
"broadcasting" (which permits the sharing of competencies between the _Lander_ and the
Federal Government), or the French system _oî_ _a posteriori_ control developed for Minitel
services, or the modulated and simplified British system already applicable to satellite
television broadcasting organisations provide many different points of departure for
laying down rules governing access to the new service activities _{a priori_ control or
_a posteriori_ control). The different approaches that currently exist in the intellectual
property field or the arrangements applicable to encryption systems (some Member States
provide for prior authorisation, while others do not) also serve to illustrate this point.

_Reasons relating to the_ _polymorphism_ _of Information Society services._ In view of the
fact that these services will be highly diverse, the spectrum of legal fields concerned will
also be very wide. The risk of divergent regulatory approaches is therefore all the greater
and will result, at the level of the functioning of the area without internal frontiers, in an
increase in the number of potential obstacles to the free movement of services. This
gives particular cause for concern because service providers will generally provide a
package, or bouquet, of several services, as a result of which there is also an increased
risk of their encountering new legal barriers. Thus, a service provider who provides a
bouquet of services consisting of interactive games, teleteaching, video-on-demand and
teleshopping might have one of his services restricted in one Member State, while in
another Member State it is another service that is restricted. The number of possible
combinations of situations of this type has obvious implications for the increased
potential for raising barriers.

_Initial signs of divergent_ _approaches_ confirm the magnitude of this risk. A study of the
work in hand reveals, for example, that there are differences in the thinking on, and
approaches to, the question of whether a system of prior authorisation is necessary or
whether, on the contrary, a system closely resembling that applicable to the press is
needed. To give another example, the regulatory issues that have been identified as being
important are not always the same (matters such as labour law, the protection of minors
and the rules on liability are not always mentioned in the individual studies and reports).

2. Risk of overregulation

The political mobilisation and the mobilisation of interested parties around the
Information Society theme could result at national level in new rules and regulations
which will themselves result in Community regulatoryactions despite the fact that the
need for such actions has not always been established.

Internal Market legislation is necessary only where national measures have restrictive
effects on the freedoms enshrined in the Treaty which cannot be resolved by direct
application of the Treaty or by the existing secondary legislation. Evaluating these
restrictive effects can be a complex task given that in many cases it will be necessary to

**24**

assess whether the national measures creating such restrictions are proportional to the
general interest objective they pursue. It is worrying that, when faced with national
regulations giving rise to this type of problem, some interest groups might prefer to
extend them to the whole Community via harmonisation rather than carry out such an
evaluation exercise enabling these new barriers to be removed by applying directly the
Treaty. _<_

This would be tantamount to 'encouraging _faits_ _accomplis_ aimed at provoking a
Community response. The risk of overregulation must not be underestimated given that
pressure is already clearly being exerted by certain interested parties, operators,
trade associations, consumer associations, etc. [45 ]

The Commission considers there should be no excessive regulation at Community level
simply with a view to complying with vociferous requests for intervention, but that
instead reliance must be placed on the well-tested principles of the Internal Market,
notably that of mutual recognition.

3. **Risks of inconsistency**

The regulatory activity at national level that will take place in the years ahead might be
reflected at Community level not only in overregulation but also in measures which are
mutually inconsistent. The diversity of general interest objectives which will be pursued
at national level (protection of the consumer, culture, health, etc.) might, as is permitted
by the Treaty on European Union, be extended at Community level by measures pursuing
each of these objectives in isolation, without any overall consistency.

The Commission considers that all national measures should respect the regulatory
consistency that is essential to the future development of these services and take full
account of all general interest objectives. Inasmuch as the purpose of Internal Market
secondary legislation is to ensure an equivalent level of protection between
Member States of a variety of general interest objectives, the Commission has already
decided that any regulatory response to the new services will have to fit into the tried and
tested framework of the Internal Market.

**45** **A number of operators' representatives outlined their position at the G7 summit in Brussels on**
**24-26 February 1995. Following the** **manufacturers'** **European round table, a document was**
**drawn up entitled "Building a global Information Society - A call for Government Action",**
**May** **1995,** **calling for adaptation of national and international rules in the areas of** **data** **protection,**
**intellectual property law, civil law and criminal law with a view to affording better protection**
**against piracy (encrypted services), the** rules on **liability,** etc. **The** same **areas were identified by**
**representatives** of the **audiovisual industry,** cable operators and telecommunications companies at
a seminar held in Belgium from 19 to 21 May 1995 (The Waterloo Report on "Transatlantic
Dialogue on Broadcasting and the Information Society"); three recent resolutions of the
International Communications Round Table (ICRT) also stressed certain regulatory requirements.

25

**III.** **DESCRIPTION** **OF** **THE TRANSPARENCY MECHANISM**

The Commission proposes **to establish a regulatory transparency** mechanism **based** on
Directive 83/189/EEC laying down a procedure for the provision of information in the
field of technical standards and regulations. [46] To this end, the Commission is presenting
a proposal for a Council Directive amending Directive 83/189/EEC for the third time by
extending the information exchange procedures provided for therein to include future
draft rules and regulations of the Member States on Information Society services.

**A.** **Objectives**

The general objective of the transparency mechanism proposed by the Commission is to
enable the Internal Market to function more smoothly in the Information Society services
field. The mechanism pursues more specifically the following objectives:

**1*** _**Ensuring the**_ _**smooth**_ _**functioning of the Internal**_ _**Market**_ _**by avoiding the creation**_
_**of**_ _**new**_ _**obstacles**_

The exchange of information between Member States and between Member States
and the Commission is intended to make it possible to detect in good time any
difficulties in the functioning of the area without internal frontiers and to take action
to prevent either the adoption of national regulations which might be incompatible
with the principles of the freedom to provide services and the freedom of
establishment (contacts with the other Member States or the Commission having
dissuaded the Member State concerned from adopting the draft or having induced it
to amend it), or the creation of legal barriers (where such regulations are justified
under Community law) by proposing, where appropriate, Community rules. It is in
no way the Commission's intention to limit the power to legislate at national level in
order to protect the general interest, but only to prevent refragmentation of the
Internal Market.

**2*** _**Ensuring**_ _**more**_ _**effective**_ _**protection**_ _**of**_ _**the**_ _**general interest**_

The need for Community action to ensure that the general interest is protected in an
equivalent manner in all Member States must be anticipated and identified in good
time. Domestic concerns which may induce a Member State to seek to legislate may
be shared by other Member States and may be more effectively met by protection at
Community level. This latter aspect is essential in the Information Society context
given that the technological environment will increase (a) the opportunities for
circumventing protection provided for solely at the level of a single Member State;
(b) the problems linked to determination of the law applicable to service providers or
to the services themselves; (c) the identification of guilty parties; and (d) the
difficulties connected with effective application of the rules or with crime prevention,

etc.

**46** Council Directive of 28 March 1983 laying down a procedure for the provision of information in
the field of technical standards and regulations (OJL 109, 26.4.1983, p. 8), as amended by
Directive 88/182/EEC of 22March 1988 (OJL 81, 26.3.1988) and by Directive94/10/EC of
23 March 1994 (OJ L 100, 19.4.1994).

26

**3*** _**Tareetine**_ _**more**_ _**accurately**_ _**and**_ _**reducing**_ _**the need**_ _**for new**_ _**Community rules**_

**In order to limit the need for legislating at** **Community** **level to that which is strictly**
**necessary, it is essential that the Treaty, and in particular Articles 52 and 59** **thereof,**
**be applied more effectively. A transparency mechanism would make a valuable**
**contribution here by making it possible,** _**upstream,**_ **to forestall** **or** **limit the adoption of**
**certain national laws which might subsequently lead to Community regulations**
**aimed at validating them. Above all, the national legislator must consider the**
**possibility of applying mutual recognition instead of allowing** _**fait**_ _**accompli**_
**situations to develop which might lead to harmonisation being proposed at**
**Community level. In any event, since it represents an information** **gathering**
**procedure which does not prejudice the basic evaluation of the possible need for**
**future Community harmonising measures, the transparency mechanism, wherever it**
**is necessary to ensure effective protection of a general interest objective through**
intervention at Community level, will contribute to the possibility of a more rapid
**and well informed introduction of** **a** **new harmonisation measure.**

**4*** _**Facilitating**_ _**administrative co-operation**_

A mechanism for the exchange of information between Member States at the stage of
**the drafting of rules and regulations should encourage the national legislator to ask**
**other national administrations about the situation in the other Member States. The**
aim **is not to challenge the power of Member States to legislate, but to create an**
**awareness of the potential danger both to the Internal Market and to the effective**
**protection of general interest objectives stemming** **from** **isolated legislative initiatives**
**which ignore both experience gained elsewhere and the impact on service providers**
**established in other countries.** **The transparency mechanism is** a **particularly**
effective tool of **administrative co-operation which** may **lead** to a genuine, collective
European reflex.

**5*** _**Contributing to the stability**_ _**of**_ _**the regulatory framework**_

**The existence of** a **clear, stable legal framework has been identified as** a **precondition**
**for stimulating the development of the Information Society.** **The** aim **of** a
**transparency mechanism is precisely to contribute to the stability and** accessibility of
the regulatory framework, first of **all** by limiting **the** risk **of** unforeseeable regulatory
reactions, secondly by avoiding periods of uncertainty during infringement
proceedings, and thirdly by enabling operators and consumers to have more
information about any draft rules and regulations that might affect them.

_6*_ _Improving the Community's participation in discussions at the international level_

The definition of a stable, coherent Community law framework is a basic
precondition for effective, co-ordinated participation by the European Community in
work on regulatory issues relating to Information Society services in the context of
international co-operation and negotiations.

**27**

**B.** **Central approach**

**1.** **Experience gained with existing transparency mechanisms**
The idea of ensuring the smooth functioning of the area without internal frontiers with
the help of a regulatory transparency mechanism is far from new. 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 is the most comprehensive instrument to date on
regulatory transparency. The Directive, which has already been amended twice, notably
to widen its scope, has become a key instrument of Internal Market policy. There are
other transparency mechanisms based on Directive 83/189/EEC. They differ from it,
however, either in that they are directed, not at draft rules and regulations, but national
measures which may continue to exist despite the fact that they form an obstacle to the
free movement of goods (European Parliament and Council Decision establishing a
procedure for the exchange of information on national measures derogating from the
principle of the free movement of goods within the Community [48] ), or in that transparency
is only a secondary aspect compared with the general aims pursued by the instruments in

**49**
question.

_(a)_ _Functioning of Directive 83/189/EEC_

The Directive ensures that information is exchanged between Member States in the field
of technical regulations and standards. Member States are required to inform the
Commission [50] and the other Member States of any draft national technical regulations [51 ]

they propose to adopt. A three-month standstill period is provided for to enable the
Commission and the other Member States to examine the draft measures and make their

reaction known.

**47**

**48**

**49**

**50**

**51**

Council Directive 88/182/EEC of 22 March 1988 (OJL 81, 26.3.1988) and Council
Directive 94/10/EEC of 23 March 1994 (OJ L 100, 19.4.1994).
OJ C 18, 21.1.1994, p. 13. The Council adopted a common position on 29 June 1995 (OJ C 216,
21.8.1995, p. 41). The Decision provides for the provision of information to the Commission
within 45 days of the date on which the measure was taken; the Commission forwards the
information to the other Member States.

cf. Directive 87/22/EEC of 22 December 1986 (Article 5) on the approximation of national measures
relating to the placing on the market of high-technology medicinal products, particularly those
derived from biotechnology (OJ L 15, 17.1.1987, p. 38); Directive 93/98/EEC of 29 October 1993
(Article 12) harmonizing the term of protection of copyright and certain related rights (OJ L 290,
24.11.1993, p. 9); Directive 94/62/EEC of 20 December 1994 (Article 16) on packaging and
packaging waste (OJ L 365, 31.12.1994, p. 10). Whereas Directive 87/22/EEC refers expressly to
those articles of Directive 83/189/EEC which provide that the notification is to have suspensive
effect, the other two do not provide for such an effect, requiring only that draft regulations be
notified.

Under Article 8(1), Member States must communicate to the Commission any draft technical
regulation at a stage in its preparation at which substantial amendments can still be made. The
Commission circulates the information among the Member States in order to make them aware of
national initiatives.

Technical regulation is defined as a technical specification or other requirement the observance of
which is made compulsory _de_ _jure_ or _de_ _facto,_ by a Member State in the case of the marketing or
use of a product in its territory (Article I). The category of _de facto_ compulsory technical
regulations includes voluntary agreements to which the public authorities are party and
professional codes of conduct, compliance with which confers a presumption of conformity with
the requirements laid down by certain rules and regulations.

28

Four scenarios are then possible:

1 - _No comments_ from the Member States and/or the Commission. In mat event, the
Member State concerned may adopt the draft rule upon the expiry of the three-month
standstill period.

2- _Comments,_ by the Commission or a Member State, about the possible consequences
for the Internal Market of the proposed measures were they to be adopted and applied
to goods from other Member States, and requests for amendment. [52] The
Member State concerned is required to take the comments into account as far as
possible when it draws up the definitive version. Such comments often result in a
mutual recognition clause which is inserted in the draft law.

3- _Detailed opinion_ issued by the Commission or by a Member State where they
consider that, were it to be applied to goods from other Member States, the measure
would contravene the Community rules on the free movement of goods. [53] The
issuing of a detailed opinion extends the length of the standstill period to six months
(or four months in the case of voluntary agreements). The purpose of this period is to
allow the matter to be re-examined and to prevent an infringement of Community
law from occurring.

**4-** _**Declaration that the Commission is going to propose,**_ **[ 4]** _**or has proposed,**_ _**[55 ]**_

Community measures in the area in question. The announcement extends the
standstill period to 12 months, or to 18 months if the Council adopts, before the end
of the period, a common position on the proposal. The extension of the standstill
period is to enable the Community to examine the matter without the discussion
being distorted or made more complicated by earlier measures. It is not, however,
possible in the case of voluntary agreements.

If a Member State wishes to adopt a technical rule for urgent reasons relating to the
protection of public health or safety, the protection of animals or the preservation of
plants, it may be authorised to do so without having to observe the standstill period. [56 ]

An Advisory Committee consisting of Member States' representatives meets
approximately six times a year and plays an important part in supervising the conduct of
the procedure and examining political issues raised by notifications.

A vade-mecum, adopted by the Committee, explains the operational aspects and, at
length, the procedures to be followed (categories of information, details and content of
the notification, etc.). [58 ]

**52**

**53**

**54**

**55**

**56**

**57**

The Member States and/or the Commission may make comments pursuant to Article 8(2) of the
Directive. At the request of the other Member States or of the Commission, the definitive text of
the technical regulation must be communicated to them.
Article 9(2) of the Directive. The detailed opinion of the Commission is a formal act which is
equivalent to service of notice if the draft is adopted as it stands.
Article 9(3).
Article 9(4).
Article 9(7).
Article 6.

29

With regard to the instrument's legal scope, the Commission has taken into account that a
finding that a Member State has failed to fulfil its obligation to comply with the
notification procedure introduced by Directive 83/189/EEC may well remain a dead letter
as long as the national measure remains in force. It accordingly stated in a
communication dated 1 October 1986 that unnotified technical rules cannot have legal

**59**

effect against third parties.

_(b)_ _Application_ _and evaluation_

_In the light of the latest statistics,_ Directive 83/189/EEC has clearly confirmed its
reputation as a key procedural instrument that is both highly incisive and effective in
terms of the results achieved. In 1992, 1993 and 1994 the Commission processed 1 136
draft national technical rules, across all sectors. It delivered 355 detailed opinions in
respect of Member States, made 532 comments and made 62 declarations with a view to
furthering harmonisation at Community level. Member States' reactions to notified drafts
in the form of detailed opinions (226) or comments (473) are increasingly numerous, and
this enhances, in a spirit of great transparency, their participation in the notification
procedure.

_With regard to the_ _Member_ _States,_ the examination of drafts by the Commission and
other Member States has played a dissuasive role and awakened among them an
awareness of their European responsibilities. The Commission is grateful for the cooperative attitude shown by Member States, prepared as they are to modify, where
necessary, their instruments when they are still in draft form so as to insert, notably, a
mutual recognition clause.

_With regard to operators,_ this transparency is beneficial inasmuch as they are able to
intervene indirectly when Member States solicit their views on the various national
legislative proposals with which they will be confronted in the Internal Market. The
cessation of the obligation of confidentiality, an amendment introduced by
Directive 94/10/EC, enables economic operators who are concerned mainly about
technical obstacles to defend their interests better during the notification procedure rather
than belatedly through a complaint. The part played by operators is worth emphasising
as the mechanism may constitute not only an instrument of administrative co-operation
but also an instrument of co-operation between the authorities and interested parties,
thereby helping to improve the quality of regulations.

**58**

**59**

The Directive also lays down (Articles 2-7), with regard to technical standards, a procedure for the
exchange of information between national and European standards bodies and the Commission.
The procedure's implementation has been entrusted by the Commission to the European
standardisation organisations.
Commission communication on the non-respect of certain provisions of the Council Directive
(83/189/EEC) of 28 March 1983, providing for an information procedure in the field of technical
standards and regulations, OJ C 245, 1.10.1986, p. 4. The Court of Justice has so far imposed
penalties on Member States for failing to notify such provisions on four occasions.

30

**2.** **The proposed transparency mechanism**
In order that it might be able to satisfy the needs that have been identified and attain the
objectives that have been defined, the transparency mechanism applicable to rules and
regulations on Information Society services should, in the Commission's opinion, possess
the following four features:

_(a) A binding legal_ _instrument_

The Commission is convinced that, in order to ensure effective regulatory transparency,
the Community must have a legally binding instrument at its disposal. No other initiative
can meet the requirements and objectives. If it were left to the discretion of the
Member States to communicate their draft regulations on Information Society services,
this would limit considerably the scope and effectiveness of the transparency and would
detract from the spirit of administrative co-operation.

_(b) A_ _prior information procedure_

Only a system of prior notification can forestall and prevent in good time the creation of
obstacles to the Internal Market freedoms. _Ex_ _post facto_ notification, that is to say,
notification after the national rules have been adopted, would suffer from several
drawbacks:

- it would simply amount to noting the existence of new legal barriers between
Member States which can be removed only by resorting to lengthy procedures (action
under Article 169 of the Treaty for failure to fulfil an obligation) or by harmonising the
rules in question. In either case, the result would be that operators and consumers would
have to bear, in the meantime, the costs arising from the lack of a genuine Internal
Market;

- it would encourage _faits_ _accomplis,_ that is to say, cases in which the adoption of a
national rule has the effect of forcing the Community to act;

- it could not stimulate a European administrative co-operation reflex since it would be
in essence a purely formal procedure (transmitting a text) rather than an attempt to
evaluate together the Community impact of legislation. In any event, once such
legislation had been adopted, the authorities [,] room for manoeuvre would be very
limited.

_Consequently, the_ _Commission_ _proposes that the same approach as that established by_
_Directive 83/189/EEC should be_ _adopted:_ _Member States_ _should communicate to the_
_Commission_ _any draft_ _rule_ _or_ _regulation_ _which_ _will_ _be_ _applicable_ _to Information Society_
_services at a stage in its preparation at_ _which substantial amendments_ _can still be made._
_This obligation to notify will_ _cover voluntary agreements_ _to which_ _the_ _public authorities_
_are party and professional codes or codes of conduct_ _compliance_ _with which confers a_
_presumption of conformity with the requirements laid down by certain rules and_

31

_**regulations.**_ _**The**_ _**Commission**_ _**will circulate this**_ _**information**_ _**among all the other**_
_**Member States in**_ _**order**_ _**that they might take note of national**_ _**initiatives.**_

_(c)_ _**A consultation procedure**_

**A mere obligation to transmit drafts without** any **subsequent procedure would** be
ineffective:

- it would provide no guarantee that the national authority concerned would take
account of any comments made by the Commission or other Member States and
prevent the creation of obstacles to the freedoms enshrined in the Treaty. The sole
means of guaranteeing these freedoms is to specify a period during which the
Member State may not adopt the draft regulation. During this period, the
administrative co-operation may function fully, the Member States and the
Commission being able to assess the draft in question and propose, where
appropriate, that the measure envisaged be amended with a view to removing or
reducing the barriers to free movement;

- it would reduce the chances of speedily adopting a harmonisation proposal aimed at
protecting the general interest at Community level (where this is necessary), since the
Member State concerned might prefer to adopt its legislation and thus perhaps
challenge the need for, or the thrust of, the work at Community level. Only a
standstill period during which the adoption of the draft is not possible would not
compromise any Community initiatives.

_Consequently,_ _the_ _Commission_ _proposes,_ _here_ _too,_ _to apply_ _the_ _procedures provided for_
_in Directive_ _83/189/EEC:_ _following notification of the draft regulation, an initial_
_standstill period of_ _three months_ _starts to run during which Member States and the_
_Commission_ _may_ _intervene_ _to_ _make_ _comments,_ _deliver_ _a detailed opinion (total standstill_
_extended to six months_ _or_ _four_ _months_ _in the case of_ _voluntary_ _agreements) or, in the_
_case of the_ _Commission,_ _declare_ _that a future_ _harmonisation_ _proposal will_ _be_ _presented_
_or that it has already proposed_ _harmonisation_ _measures (total standstill extended to_
_12_ _months,_ _or 18 months if a common position has_ _been_ _reached)._

_(d) A committee_

A committee should make it possible to administer the procedure effectively. As already
indicated, one of the main objectives of the transparu i^/ m< chanïgm is to stimulate a
dialogue between the; legislators of the various î. » \r fist's tud to promote
administrative co-operation. Administrative co~opero [L], _,_ ' ^ _T_ _ce^_ M un rr- States is all
the more justified as Information Society services ar pjC^e _[ f]_ _:- rvric_ and unforeseeable
development. The creation of a forum intended for the exchange of experience can only
enrich and improve the contemplated regulations and increase awareness among national
administrations that their draft legislation might harm the proper functioning of the area
without internal frontiers. In the short term, the Committee might, for example, examine
certain questions concerning problems of interpreting the current rules in the light,

**60**

The Commission considers that, provided a link with the State can be established, professional codes
must be communicated. Thus, draft amendments to professional codes should be notified where
the regulatory power of the professional body is based on a legislative provision.

32

among other things, of the dialogue that should exist between the authorities and the
parties concerned.

_**The Committee provided for in**_ _**Directive 83/189/EEC**_ _**can play this role and may**_
_**therefore**_ _**serve as a model for**_ _**the**_ _**regulatory transparency**_ _**mechanism.**_

**C.** **Legal instrument**

The Commission proposes widening the scope of Directive 83/189/EEC. This method
has the following advantages:

- the Directive meets the precise requirements and has the same objectives as those
pursued within the framework of the Information Society (preventing
refragmentation, protecting the general interest better at Community level, avoiding
overregulation and inconsistent regulations, ensuring administrative co-operation),
and is the most comprehensive instrument in the area of regulatory transparency. By
contrast, the other transparency instruments have been presented in the form of an
autonomous measure [61] because they meet different needs and provide for obligations
different from those of Directive 83/189/EEC;

- it makes it possible to draw on the experience and know-how gained from
implementing Directive 83/189/EEC over a period of several years, in particular: the
Commission's implementation policy, the case-law of the Court, the administrative
machinery that has been in place at Member State level for a number of years now
for the purpose of administering the Directive's application, the existing Committee,
the structure, set up by the Commission, for monitoring proper compliance by
Member States with the obligation to notify and the vade-mecum explaining the
practical procedures to be followed by Commission departments and Member States'
administrations;

- it prevents the need for two different instruments, one for draft rules on goods and
the other for draft rules on services. Two separate instruments would complicate the
task of national authorities when it comes to implementing the mechanism, thereby
running counter both to the aim of ensuring legal clarity and to the very objective of
transparency. The lack of correspondence between the obligations laid down in the
two instruments would lead, above all, to inconsistent legal situations in the case of
regulations governing both services and products. This scenario could be fairly
common given that, as economic analysis has shown, services activities are going to
be linked to those of distributing goods;

- lastly, it is a repeat of a method that has been used successfully twice: the first
amendment to the Directive consisted in extending the concept of technical
specification to cover all industrial products not yet included in the original scope of
the Directive, that is to say, medicinal products, cosmetics, and all agricultural
products. The second amendment broadened the concept by including production

**61**

**62**

Either by forming only part of a Directive, or by constituting a separate instrument (proposal for a

Decision establishing a procedure for the exchange of information).
Directive 88/182/EC, OJ L 81, 16.3.1988, p. 75.

33

methods and processes relating to industrial products and the concept of "other
requirements" imposed on a product (Article 1(2) and (3)). [63 ]

**D.** **Seope**

**1.** **Regulations concerning services that must be notified**
Since this is an instrument intended to ensure the smooth functioning of the Internal
Market, all draft rules and regulations which may create obstacles to the free movement,
between Member States, of Information Society services and to the freedom of
establishment of service providers should, in principle, be notified. The practical
application of the instrument calls, however, for the clearest possible indication of the
rules and regulations to be notified in order, first, that national authorities might readily
determine which drafts have to be communicated and, secondly, that the Member States
and the Commission are not overburdened by unnecessary notifications. There are
several possible ways of achieving this:

- The method consisting in defining precisely what "Information Society services" are
would be inappropriate:

(i) first, a detailed and specific definition would be particularly difficult in view
of those services' diversity, polymorphous nature and complex architecture,
incorporating, as they do, features from telecommunication services,
audiovisual services, traditional services and the press;

(ii) secondly, such a definition would be artificial and lacking in clarity, and
would add to the current terminological confusion surrounding "multimedia"
services "on-line" services, "telematic" services, "audiovisual" services,
"broadcasting" services, etc. Depending on the Member State, different
terms may be used to refer to the same type of service.

An alternative method consisting in drawing up a list of services (electronic
commerce, telemedicine, teleteaching, etc.) and requesting notification of those draft
regulations which might affect them is not a satisfactory solution either. The two
main drawbacks of such a list would be, first, that it could not be exhaustive, market
analysis having shown that a precise picture cannot yet be formed of a large number
of services that will be developed in future, and secondly, that it would call for clear,
unambiguous definitions of each of these categories - a particularly complex task.

The Commission considers that the point at issue here is not the terminological
question of what Information Society services are (or are not). What needs to be
done is, rather, to find, for the purposes of the Internal Market and of the
transparency mechanism, criteria which make it possible to determine which draft
regulations will have to be notified. The key element is the need to cover those draft
rules which will form part of the regulatory adaptation exercise that is going to take
place while the Information Society develops. This means that those regulations
which have stabilised, that is, those which are _prima_ _facie_ unlikely to evolve

**63**
Directive 94/10/EC, OJ L 100, 19.4.1994.
**64**
Cf. Directive 89/522/EEC of 3 October 1989.

34

substantially, should not be covered. In this respect, the factors which will
necessitate new regulations over and above the existing ones on traditional services
(doctors, lawyers, schools, etc.) are that the services will be _provided at a distance by_
_electronic_ _means:_ compared with current regulations on television broadcasting, the
key factor is that they will be interactive, in other words they will _meet one or more_
_**individual**_ _**requests from a particular service**_ _**receiver.**_ **The interactivity lies in this**
particular link between the service receiver and the service provider, each one being
able to intervene and influence the content of the service, the consumer all the more
so as he can choose it and control its content.

In the light of these criteria, the Commission proposes that only _draft rules on the_
_**taking-up**_ _**and pursuit of service**_ _**activities,**_ _**where the services are**_ _**provided at a**_ _**distance,**_
_**by electronic means and on the individual request of a service receiver**_ **should in**
principle be notified.

This "service" defintion would cover, for examlpe:

  - On-line professioanl services (solicitors services, psychologists, stock-brokers, online health services, etc.)

  - interactive entertainment services (video on demand, on-line video-games, virtual
vists to museums, etc.)

  - on-line infromation services (electronic library, on-line meteorological services, online financial information services etc.)

  - virtual shopping malls

  - on-line electronic newspapers

  - on-line tourism services

  - on-line estate agents

  - on-line insurance services

  - on-line educational services

On the other hand, this defintion would not cover (because they are either not offered at a
distance, or not offered via electronic means, or not supplied on individual demand):

  - television broadcasting services (including near video on demand services)

  - radio broadcasting services

-teletext

  - non-electronic direct marketing services (for example, mail order catalogues)

  - automatic bank tellers

**35**

**- electronic games such as found in amusement arcades**

  - Voice telephony services (including via GSM)

As regards which draft rules should be notified, mention should first be made of those
regulatory measures specifically and primarily aimed at new services laying down
conditions as to their content (advertising, protection of minors, etc.) or relating to the
service provider (solvency, worthiness,transparency in identifying the operator,
ownership, etc.), those on the authorisation arrangements for new services, and those on
the conditions to undertake the service activities (intellectual property, encryption, etc.).

Moreover, provisions seeking to adapt a general regulation already in force to account for
new services would also have to be notfied. Such an example would be the recent predraft German law concerning the regulatory framework for information and
telecommunications services: it foresees extending existing general legislation protecting
participants in distance education services, price indications, personal data protection,
protection of minors etc to new services.

Likewise, provisions aimed specifically at Information Society services included in new
regulations seeking to achieve more general objectives will also have to be notified
(together with all the other provisions of these regulations in order to assess their scope).

On the other hand, draft horizontal legal rules (such as those of general company law),
or a rule setting out the general conditions required to enter a profession (such as, for
example, requirement of a diploma, general worthiness conditions, solvency, etc.) not
specifically aimed at Information Society services cannot be deemed, even indirectly, to
contain rules "on new services" of the Information Society as such and will accordingly
not have to be notified.

The Court of Justice held in its judgement of 30 April 1996 (in Case C-194/94)
concerning Directive 83/189 that a national rule which merely serves as a basis for
enabling the adoption of successive legal instruments (containing binding rules), without
having legal effects of its own, would not be subject to the obligation of prior
notification.

For the purpose of delimiting the extent of the prior notification obligation, it is also
necessary to consider the various exceptions already provided for in Directive 83/189.

**2.** **Exceptions**

The exceptions already provided for in Directive 83/189/EEC will also apply to the draft
rules and regulations. The following will thus not have to be communicated:

- Member States' laws, regulations and administrative provisions and voluntary
agreements by means of which Member States comply with binding Community
instruments or fulfil commitments arising out of international agreements which
result in the adoption of common technical specifications. More particularly, this

36

means in essence that draft national laws implementing a Community Directive
which, through its content, may affect Information Society services (e.g. the
Directive on the protection of personal data, me. Directive on distance selling, the
revised Directive on television without frontiers or the future Directive on a common
framework for general authorisations and individual licences for telecommunications
services) are not subject to the transparency mechanism;

_**•r**_

- provisions by which Member States make use of safeguard clauses provided for in
binding Community instruments;

- provisions implementing a judgement of the Court of Justice;

- provisions the communication of which in draft form is provided for by other
Community instruments (e.g. Article 12 of Directive 93/98/EC harmonising the term of
protection of copyright and certain related rights [65] ). Member States must, however,
formally indicate that such communication is also valid for purposes of the transparency
mechanism.

There are also a number of exceptions to the standstill periods: these do not apply to
fiscal or financial measures, and the 12-month standstill period (which may be extended
to 18 months in the case of a common position) is not applicable to voluntary
agreements.

Recourse to one of the legal bases on which the Internal Market rests is the logical and
consistent solution. The purpose of the proposed legal instrument is, given its aim and
content, manifestly to ensure the smooth functioning of the Internal Market. This is clear
from the _objectives_ set out above. The _contents_ of the mechanism itself, that is to say
the notification procedure, the holding of consultations with the other Member States, the
standstill periods and the emergency procedure, are the appropriate legal solutions
whereby the above objectives may be effectively attained.

Moreover, Directive 83/189/EEC (and the Directives amending it) is itself based on the
Internal Market, and the present proposal for a Directive in no way alters the object and
purpose of that Directive (since it consists solely in broadening the scope so as to prevent
the creation of new obstacles to the Internal Market).

When choosing among the possible legal bases of the Internal Market, Articles 100a and
213 are considered to be the most appropriate bases for the proposal for a Council
Directive amending Directive 83/189/EEC. The reasons for this are as follows:

- Directive 83/189 is itself based on Articles 100a and 213 (apart from Article 43); a
need for consistency justifies recourse to the same legal basis for the Directive's
extension;

**65**
OJL290,24.11.1993, p. 9.
**66**
Part III.A.

37

admittedly, Article 100a can be considered as a legal basis only in the alternative,
that is to say, only if the Treaty does not provide otherwise. In this respect, being an
instrument aimed at preventing the introduction of new restrictions to the free
movement of services and the freedom of establishment of service providers,
Article 57(2), to which Article 66 refers for the part concerning services, might
constitute a specific legal basis. However, a Directive based on- Article 57(2) must
seek to _co-ordinate_ provisions laid down by law, regulation or administrative action
in Member States; the Directive which is being proposed, however, seeks only to lay
down a notification procedure without introducing any substantive legal provisions.

**F. Subsidiarity**

This proposal for a Council Directive amending for the third time Directive 83/189/EEC
is perfectly in keeping with the spirit of subsidiarity:

- the transparency mechanism will permit a better application of Article 59 of the
Treaty and of the principle of mutual recognition which stems therefrom, and this
will have the effect of limiting the need for new Community regulations to that
which is strictly necessary, and hence limiting also the risk of overregulation. From
this point of view, the transparency mechanism is the instrument of choice when it
comes to meeting the concern for subsidiarity;

- action at national level could under no circumstances attain the Internal Market

objectives pursued by this proposal and, _a_ _fortiori,_ achieve them effectively.
Effective co-ordination of the new national rules can be ensured only at Community
level;

- the mechanism will contribute to a better application of the subsidiarity principle
since it will enable both the Member States and the Commission to identify together
possible barriers to the free movement of services and to detect the need for any
Community action.

With regard to the principle of subsidiarity set out in the second paragraph of Article 3b
of the Treaty, the subsidiarity test may be summed up as follows:

_What_ _are the_ _objectives_ _of_ _the_ _proposed_ _action_ _in relation to the obligations imposed on_
_the_ _Community?_

The objective is to make a practical reality of the fundamental freedoms of the
Internal Market as defined in Article 7a of the Treaty, that is, to ensure the free
movement of services and the freedom of establishment, while preventing the rules
that will be adopted, in future at national level with a view to regulating Information
Society services, from impairing them.

_Does the proposed_ _action_ _fall within an exclusive competence of the Community or_
_within_ _a_ _competence shared with the Member States?_

**38**

The proposed action falls within an exclusive competence of the Community
(Article 7a).

_What means of action does the Community have at its disposal (recommendation,_
_financial_ _support,_ _legislation,_ _mutual_ _recognition,_ _etc.)?_

Directive for the co-ordination of laws (Article 57(2)) or measures for the
approximation of laws (Article 100a).

_Is a_ _uniform_ _set of rules_ _necessary,_ _or would a_ _Directive imposing_ _general_ _objectives_ _and_
_leaving_ _the_ _task of_ _implementation_ _to_ _the Member States_ _be sufficient?_

The purpose of the proposed initiative is not to harmonise the Member States'
substantive law, but merely to lay down an information procedure coupled with a
procedure aimed at co-ordinating future rules and regulations, so as to improve the
application of Articles 52 and 59 of the Treaty and to identify more clearly any need
for Community action.

39

**TV.** **PROPOSAT,** **FOR** **A** **nmFrTWF,**

**Proposal for a European Parliament and Council Directive**
**amending for the third time Directive 83/189/EEC laying down**

**a procedure** **for** **the provision of information in the field of**

**technical standards and regulations**

```
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

```

Having regard to the Treaty establishing the European Community, and in particular
Articles 100a and 213 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the Economic and Social Committee,

Acting in accordance with the procedure referred to in Article 189b of the Treaty,

1. Whereas, in order to promote the smooth functioning of the Internal Market, as much
transparency as possible should be ensured as regards the future national rules and
regulations that will apply to Information Society services by amending
Directive 83/189/EEC;

2. Whereas a wide variety of services within the meaning of Articles 59 and 60 of the Treaty
will benefit from the opportunities afforded by the Information Society for being provided
at a distance, electronically and on the individual request of a service receiver;

3. Whereas the area without internal frontiers of which the Internal Market consists enables
the providers of such services to develop their cross-border activities with a view to
increasing their competitiveness, and thus affords ordinary citizens new opportunities for
transmitting and receiving information regardless of frontiers, and consumers new forms
of access to goods or services;

4. Whereas the various social, societal and cultural implications of the advent of the
Information Society may require account to be taken of the specificity of the content of
such services;

5. Whereas the European Council has stressed the need to create a clear and stable legal
framework at Community level in order to foster the development of the Information
Society; whereas Community law and the rules governing the Internal Market in
particular, including both the principles enshrined in the Treaty and secondary legislation,
already constitute a basic legal framework for the growth of such services;

6. Whereas the current national rules and regulations applicable to existing services will have
to be adapted to take account of the new Information Society services, either with a view
to ensuring that the general interest is better safeguarded or, on the contrary, with a view
to simplifying them where their application is disproportionate to the objectives they

pursue;

7. Whereas, without co-ordination at Community level, this foreseeable regulatory activity at
national level might result in restrictions to the free movement of services and the freedom
of establishment, leading in turn to a refragmentation of the Internal Market,
overregulation and regulatory inconsistencies;

**40**

8. Whereas, in order to ensure **real and** effective protection of the general interest objectives
which play a part in the development of the Information Society, there is a need for a coordinated approach at Community level when dealing with questions relating to activities
with such highly transnational connotations as the new services have;

8.bis. Whereas there already exists Community harmonisation for telecommunication sen/ices
and that the existing Community legislation foresees adaptations to account for
technological developments.and the supply of new services;

9. Whereas, for the other less well-knovvn fio' " of the Information Society it would be
premature, however, to co-ordinate such rules _,ni_ regulations, by means of as extensive CT
exhaustive harmonisation at Commiurty level cf uie substantive law, given, first, that
neither the form the new services win take nc: _txo'jt_ nature is sufficiently well known.
secondly, that there is as _yet_ at national level no specific regulatory activity in'this field,
and, thirdly, that the need for and content of such [harra.onisa.tion](http://harra.onisa.tion) in the light of the Internal
Market cannot be defined at this stage;

10. Whereas it is therefore necessary to preserve the smooth functioning of the area without
internal frontiers and to avert the risks of refragmentation _by_ providing for a procedure for
the provision _of_ information, the holding of consultations, and administrative co-operation
in respect of the new draft rules and regulations; whereas such a procedure will contribute
_inter alia_ to ensure that the Treaty, in particular Articles 52 and 59 thereof, is effectively
applied, and, where appropriate, to detect the need to safeguard the general interest at
Community level; whereas, moreover, the improved application of the Treaty made
possible by such an information procedure will have the effect of reducing the need for
Community rules to that which is strictly necessary and proportional in the light of the
Internal Market and of the protection of general interest objectives; whereas, lastly, such a.
procedure will enable businesses to exploit the advantages of the Internal Market more
effectively;

11. Whereas 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 pursues the
same objectives; whereas this procedure is effective, being the most comprehensive one
for attaining these objectives; whereas the experience that has been gained in implementing
the Directive and the procedures provided for therein can be applied to draft rules on
Information Society services; whereas the procedure it lays down is now well established
among national authorities;

12. Whereas, moreover, in accordance with Article 7a of the Treaty, the Internal Market
comprises an area without internal frontiers in which the free movement of goods, persons,
services and capital is ensured; whereas Directive 83/189/EEC provides only for an
administrative co-operation procedure and not for any harmonisation of substantive rules;

13. Whereas, therefore, amendment of Directive 83/189/EEC with a view to applying it to
draft rules and regulations on Information Society services is the approach best suited to
meeting effectively the need for transparency in the Internal Market as far as the legal
framework for Information Society services is concerned;

14. Whereas, in view of the diversity of Information Society services and their future growth,
notification should be provided for only in the case of rules which are likely to evolve in
future; whereas the services which are likely to necessitate and generate the largest number
of new rules and regulations are those which are provided at a distance, electronically, and

41

on **the individual request of a service receiver; whereas provision must accordingly be**
**made for the notification of draft rules and regulations relating to such** services;

15. **Whereas** specific rules on the **taking-up and pursuit** of service activities which are capable
of being carried on in the manner described above should thus be communicated even
where they are included in a set of rules and regulations with a more general purpose;
whereas, however, general rules which do not contain any specific provision concerning
such services should not be notified;

16. Whereas "rules on the taking-up and pursuit of service activities" means rules laying down
any form of requirement, such as those relating to service providers, services and service
receivers and to an economic activity capable of being provided electronically, at a
distance and on the individual request of the service receiver; whereas, for example, rules
on the establishment of service providers, in particular those on authorisation or licensing
arrangements, are thus covered; whereas shall be considered as such a rule a provision
specifically aimed at Information Society services even if part of a more general
regulation;

17. Whereas this Directive is without prejudice to the scope of Council Directive 89/552/EC
on the co-ordination of certain provisions laid down by law, regulation or administrative
action in Member States concerning the pursuit of television broadcasting activities such as
modified by directive 96/.../EC of the European Parliament and the Council or any future
modification of that directive ;

18. Whereas this Directive is without prejudice to the negotiations concerning and the content
of the proposal for a European Parliament and Council Directive on a common framework
for general authorisations and individual licences for telecommunications services;

19. Whereas, at all events, this Directive does not cover the drafts of national provisions aimed
at implementing the content of Community Directives in force or awaiting adoption
inasmuch as they already form the subject-matter of a specific examination; whereas it
accordingly does not cover either national rules and regulations implementing theCouncil
Directive 89/552/EC amending the above-mentioned Directive 89/552/EEC on the coordination of certain provisions laid down by law, regulation or administrative action in
Member States concerning the pursuit of television broadcasting activities such as
modified by directive 96/.../EC of the European Parliament and the Council or any future
modification of that directive or national rules and regulations implementing the future
Directive on a common framework for general authorisations and individual licences for
telecommunications services;

20. Whereas definition of the framework for the provision of information and the holding of
consultations at Community level as established by this Directive is a precondition for a
co-ordinated and effective participation by the European Community in work involving
matters relating to the regulatory aspects of Information Society services in the
international context;

21. Whereas this Directive seeks to amend Directive 83/189/EEC, which for its part (with the
exception of Article 43) is based on Articles 100a and 213 of the Treaty; whereas there
should be a degree of consistency in the legal bases used for the same Directive;

**42**

**HAVE ADOPTED THIS DIRECTIVE:**

**Article 1**

**Directive 83/189/EEC is amended as follows:**

**1.** **The title of** **the** **Directive is replaced by the following:**

_**European Parliament**_ _**and**_ _**Council**_ _**Directive**_ _**laying**_ _**down a procedure for**_ _**the**_ _**provision**_ _**of**_
_**information**_ _**in the field of**_ _**technical standards**_ _**and**_ _**regulations**_ _**and of**_ _**rules**_ _on_ _**Information**_
_**Society**_ _**services.**_

_**2.**_ **Article 1 is amended as follows:**

**(a)** a **new point is added after point** **1** :
**2.** _**"service",**_ _**any service provided at a**_ _**distance,**_ _by_ _**electronic**_ _means and on the._
_**individual requestof**_ _a_ _**service**_ _**receiver:**_

**(b)** points **2** and **3 become points 3 and 4 respectively;**

(c) a new point 5 is added:
**5.** _**"rule on**_ _**services",**_ _**a**_ _requirement relating to the taking-up and pursuit of_
_service activities within_ _**the**_ _meaning of point 2 of this_ _Article,_ _and in particular_
_provisions concerning_ _**the**_ _service_ _provider,_ _the_ _services_ _and the service_ _receiver,_ _to_
_the exclusion of any rules that are_ _not specifically_ _aimed at the services defined_
_within this_ _same_ _point:_

(d) points 4 to 10 become **points** 6 to 12;

(e) the first paragraph of point 9 (new point 11) is replaced by the following:

_"technical regulation ",_ _technical_ _specifications_ _and other_ _requirements_ _or a rule on_
_sendees,_ _including the relevant_ _administrative_ _provisions,_ _the observance of which_
_is compulsory, de jure or de_ _facto,_ _in the case of marketing, provision._
_establishment_ _of a service operator or use in a Member_ _State_ _or a major part_
_thereof,_ _as_ _well_ _as'_ _laws,_ _regulations or_ _administrative provisions_ _of Member States,_
_except those provided for in_ _Article_ _10,_ _prohibiting the manufacture, importation,_
_marketing or use of a product or_ _prohibiting_ _the provision_ _or_ _use of a service or_

_De facto technical_ _regulations_ _include:_

_laws, regulations or_ _administrative_ _provisions of a Member State which refer_
_either to_ _technical specifications_ _or other_ _requirements_ _or rules on_ _services,_ _or_
_to professional codes or codes of practice which in turn refer to technical_
_specifications or other_ _requirements_ _or rules on services and compliance with_
_which confers a presumption of_ _conformity_ _with the_ _obligations_ _imposed by the_
_aforementioned_ _laws,_ _regulations_ _or_ _administrative_ _provisions,_

_voluntary agreements to which a public authority is a contracting party and_
_which provide, in the general interest, for compliance with technical_
_specifications_ . _or_ _other requirements or rules on_ _services,_ _excluding public_
_procurement tender_ _specifications;_

_technical specifications or other requirements which are linked to fiscal or_
_financial measures affecting the consumption of products or services by_
_encouraging compliance with such technical_ _specifications_ _or other_
_requirements or rules on services: technical specifications or other_

**43**

_**requirements nr rules**_ _on services_ _**linked**_ _**to**_ _**national social-security**_ _**systems are**_
_**not**_ _**included.**_ **~**

**(f)** **point 10 (new point 12) is replaced by the following:**

_**12.**_ _**"draft technical regulation",**_ _the text of a_ _technical_ _specification or other_
_requirement or of a rule on_ _services,_ _including_ _administrative_ _provisions formulated_
_with the aim of enacting it or of ultimately having it enacted as a technical_
_regulation, the text being at a stage of preparation at which_ _substantial_ _amendments_
_can still be made._

3. The last subparagraph of Article 8(1) is replaced by the following:

_With respect to the technical specifications or other requirements or rules on services_
_referred_ _to in the third indent of the second paragraph of point_ _11_ _of Article 1, the detailed_
_comments or opinions of the Commission or the Member_ _States_ _may concern only the_
_aspect which may hinder trade or the free movement of_ _services_ _and not the fiscal or_
_financial aspect of the measure._

4. Article 9 is modified as follows

**a) The** first paragraph of point 2 is **replaced** by the following:
_Member States shall postpone:_

_for four_ _months_ _the adoption of a draft technical regulation in the form of a_

_voluntary agreement within the meaning of the second indent of the_
_second paragraph_ _ofpmDLlL_ _of Article 1,_
_without prejudice_ _to paragraphs_ _3,_ _4 and_ _5,_ _for six_ _months_ _the_ _adoption_ _of any other_
_draft technical regulation,_
_from the date of receipt by the_ _Commission_ _of the_ _communication referred_ _to in Article 8(1)_
_if the Commission or another Member State delivers a detailed_ _opinion,_ _within_
_three months of_ _that_ _date, to the effect that the measure envisaged may create obstacles to_
_the free movement of goods or services or to the freedom of_ _establishment_ _of operators_
_within the_ _Internal_ _Market._
b) point 7 is replaced with the following _t&xt:_
_Paragraphs 1 to 5 shall not apply in those cases_ _where,_ _for urgent_ _reasons,_ _occasioned by_
_serious and unforeseeable circumstances, relating to the protection of public health or_
_safety, the protection of_ _animals_ _or the preservation of plants, and for rules relating to_
_services_ _also_ _for public order, a Member State is obliged_ _to_ _prepare technical regulations_
_in a very short space of time in order to enact and_ _introduce_ _them_ _immediately_ _without any_
_consultations_ _being possible. The Member State shall give, in the_ _communication_ _referred_
_to in Article 8, the reasons which warrant the urgency of the measures taken. The_
_Commission shall give its views on the communication as soon as possible. It shall take_
_appropriate action in cases where improper use is made of_ _this_ _procedure. The European_
_Parliament_ _shall be kept informed by the Commission._

5. Article 10 is amended as follows:

_(a)_ _the first and second_ _indents_ _of paragraph 1 are_ _replaced_ _by the following:_
_comply with binding Community acts which result in the adoption of technical_
_specifications_ _or_ _rules_ _on services:_
_fulfil the_ _obligations_ _arising out of international agreements which result in the_
_adoption of_ _common_ _technical_ _specifications_ _or_ _rules_ _on services in the Community;_

**44**

(b) the sixth indent of paragraph 1 is replaced by the following:

_**restrict themselves to amending a technical regulation within the meaning of**_
_**point**_ _**11**_ _**of**_ _**Article**_ _**1 of**_ _**this**_ _**Directive, in accordance with a**_ _**Commission**_ _**request,**_
_**with**_ _**a view to**_ _**removing**_ _**an obstacle to trade or**_ _**the**_ _**free**_ _**movement**_ _**of**_ _**services;**_

(c) in paragraphs 3 and 4 the reference to Article 1(9) is replaced by: _point 11 of_
_**Article**_ _**1;**_

(d) paragraph 4 is amended as follows:
_**4.**_ _**Article 9 shall not apply to the**_ _**technical specifications**_ _**or other**_ _**requirements**_ _**or the**_
_**rules on services**_ _**referred**_ _**to in the third**_ _**indent**_ _**of the second paragraph of point 11**_
_**of Article 1.**_

1. Member States shall bring into force the regulations and administrative provisions
necessary to comply with this Directive by 31/12/97. at the latest. They shall forthwith inform
the Commission thereof.

When Member States adopt these provisions, they shall contain a reference to this Directive or
shall be accompanied by such reference at the time of their official publication. The procedure
for such reference shall be adopted by Member States.

2. Member States shall commumcate the main provisions of national law which they adopt in
the field covered by this Directive to the Commission.

**Article 3**

This Directive is addressed to the Member States.

Done at Brussels,

**45**

**FINANCIAL** **{STATEMENT**

**1.** **TITLE OF** **OPERATION**

**Proposal for a European Parliament and Council Directive amending for the third**
time **Directive** **83/189/EEC** **laying down** **a** **procedure for the provision of**
**information in the field of technical standards and regulations**

**2.** **BUDGET HEADING INVOLVED**

**A2510:** Committees whose consultation is compulsory.

**3.** **LEGAL BASIS**

Proposal for a European Parliament and Council Directive amending for the third
time Directive 83/189/EEC laying down a procedure for the provision of
**information in the field of technical standards and regulations**

**4.** **DESCRIPTION** OF OPERATION

**4.1** **General objective**

The proposal for a directive is designed to introduce a procedure for the supply of
information and administrative cooperation between national and Community
authorities regarding rules and regulations on Information Society services. In
particular, each Member State would be required to notify the Commission and
the other Member States of draft national rules and regulations relating to such
services. They would enter into force only after a minimum three-month
standstill period had elapsed in which checks would be made to ensure that the
draft legislation was consistent and compatible with existing Community law, and
in particular with internal market rules.

**4.2** **Period** covered **and arrangements for renewal**

The Committee set up under Articles 5 and 6 of Directive 83/189/EEC could
begin to carry out these tasks relating to Information Society services
immediately after the adoption of the above-mentioned proposal (possibly from
1997) in order to facilitate, first, its transposai and, second, its operation.

**5.** **CLASSIFICATION OF EXPENDITURE**

**5.1** Non-compulsory expenditure
5.2 Non-differentiated appropriations

**^**

**6.** **TYPE OF EXPENDITURE**

**6.1** **Type** **of expenditure**

Refund of travel and living expenses incurred by members of the Standing
Committee on Technical Standards and Regulations (committee 03C0210) in
attending additional meetings necessitated by the adoption of the
above-mentioned proposal for a directive.

7. **FINANCIAL IMPACT** **(on Part** **B)**

**None**

8. FRAUD PREVENTION MEASURES

Refund applications will be checked by the Committee's secretariat in DG XV.

9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS

9.1 Specific and **quantifiable** objectives; target **population**

The aim of the proposal is to safeguard and facilitate the functioning of the internal
market by forestalling the adoption of rules and regulations that are inconsistent and
incompatible with internal market freedoms. Any refragmentation of the internal market
would compromise the economic growth of the on-line services sector which is
expanding rapidly (the number of Internet users worldwide is increasing by
approximately 1 million a year).

There will be investment in the new services sector if development prospects at
Community level are assured; legally fragmented national markets would not be
sufficiently profitable to sustain investment programmes.

9.2 **Grounds for the operation**

This initiative relates to the operation of the internal market, for which the Community
has sole responsibility; subsidiarity is not therefore applicable in this case.

The proposal does not provide for harmonization or lay down rules of substantive law.

It simply contains procedural rules, making use of the committee which is already
operating under the Directive to be amended (83/189/EEC) and which has already proved
its worth for more than a decade.

Given the many legislative initiatives currently under preparation in the Member States to
help meet the needs arising from the advent of the Information Society, a coordinated
Community approach to the new services, which are by definition cross-frontier in
nature, is necessary both in order to safeguard the development of this economic sector in
the internal market and to provide more effective protection for pertinent general interests
(such as the protection of minors, consumers, public morality, etc.)

Furthermore, the non-confidential nature of the information to be notified under the
Directive also takes account of the desire of economic operators in the sector to express
their views on future legislative initiatives within a regulatory framework that is
sufficiently transparent, consistent and stable for them to carry out and develop their
activities.

Finally, failure to introduce the proposed mechanism could pose a problem as regards the
internal resources the Commission would require to administer any infringement
proceedings brought in respect of future national legislation that was incompatible with
Community law.

9.3 **Monitoring and evaluation** of **the operation**

Article 3 of the Directive provides for the Commission to report to Parliament and the
Economic and Social Committee every two years on the results of applying the Directive.
Any proposals for adjusting the proposed system could be put forward then.

10. ADMINISTRATIVE EXPENDITURE (PART A OF SECTION III OF THE
GENERAL BUDGET)

Actual mobilization of the necessary administrative resources will result from the
Commission's annual decision on the allocation of resources, which depends in particular
on the additional staff and appropriations earmarked by the budgetary authority.

**10.1** **Impact on the number of posts**

Type of post

Officials or A
temporary staff B

C

Other resources

Total

Staff to be assigned to
the administration of the

operation

permanent temporary
posts posts

1

1

2

of which

use of existing
resources within the
DG or department
concerned

1

1

2

use of

additional

resources

duration

indefinite

indefinite

**10.2** **Overall financial impact of the additional human** resources

Not applicable

Amounts Method of calculation
Officials
Temporary staff
Other resources

Total

I—™ ""••'•'••-•~-1H-- [,l,,] « [,] r [1] ''-''"-—T^ ""II ITU ^ • f n ^ [l] T r [^] - [, ! i ^] ^ ^ ^ ^ 1 r [^] ^ * * ^ [, ^] ' [l] - [U l l 1] ' ' — - ^ — 1111—I I I 111 • I — ^ — ^ - » ^ » - ^ — • _ - ] _. _EEl..LAM<mm_

**V ***

**10.3** **Increase in other administrative expenditure arising from the operation**

Budget heading Amounts Method of calculation /
(No and title) .
A2510 22 000 15 experts from the Member States
committees whose consultation is attending two additional meetings a year of
compulsory the Standing Committee on Technical
Standards and Regulations
2 x ECU 11 000 (average cost) =
ECU 22 000

I Total 22 000

#### **^9**

**ISSN0254-1475**

**COM(96)** **392 final**

# **DOCUMENTS**

**EN** **15** **i6** **io**

**Catalogue number** **:** **CB-CO-96-411-EN-C**

**ISBN 92-78-07821-2**

**Office** **for** **Official Publications** **of** **the European Communities**

**L-2985** **Luxembourg**

## **r**

**o**