CELEX: 51998PC0332
Language: en
Date: 1998-05-18
Title: Amended proposal for a European Parliament and Council Directive on the legal protection of services based on, or consisting of, conditional access

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                Brussels, 18.05.1998
                                               COM(1998) 332 final
                                               97/0198 (COD)
Amended proposal for a European Parliament and Council Directive on the Legal
     Protection of Services based on, or consisting of, Conditional Access
         (presented by the Commission pursuant to Article 189 a (2)
                             of the EC-Treaty)
 ---pagebreak---  ---pagebreak---                                EXPLANATORY MEMORANDUM
1. The initial proposal
1. 1 Content
Following the publication of the Green Paper on the Legal Protection of encrypted
services which has launched a wide consultation process in 1996, and the Resolution
adopted by the European Parliament on 13 May 1997, the Proposal for a European
Parliament and Council Directive on the Legal Protection of Services based on, or
consisting of, Conditional Access, was adopted by the Commission on 9 July 1997.
This proposal aims at ensuring an adequate level of legal protection to television and
radio broadcasting and information society services that are provided against
remuneration and on the basis of conditional access.
The proposed Directive will require Member States to prohibit and provide appropriate
sanctions against a wide range of commercial piracy activities that relate to illicit (pirate)
decoders, smart cards and software which allow the circumvention of conditional access
systems and the receipt of a service free of charge.
The proposed protection is limited to commercial piracy activities against services which
use conditional access techniques to ensure their remuneration.
• Protected service is defined under Article la) as a television or radio broadcasting or
   information society service as well as the provision of conditional access as a service
   in its own right. Consequently, the proposal does not only cover services such as pay-
   television, or pay-radio but also services such as video-on-demand, music-on-demand,
   electronic publishing and a wide range of other on-line services. However to be
   covered by the proposal these services need to be offered under two conditions:
   - they must be provided on the basis of a conditional access device which is defined as
   any equipment or software designed or adapted to give access to a protected service in
   an intelligible form
   - the use of conditional access must aim be to ensure the remuneration of the service.
• Infringing activities listed under Article 3 envisage solely commercial activities
   related to illicit devices, the latter being defined as equipment or software designed or
   adapted to give unauthorised access to a protected service, As a matter of
   proportionality and subsidiarity, it is left to the Member States to take measures
   against the private possession and use of illicit devices.
                                           ^
 ---pagebreak--- 1.2 Institutional procedure:
The Commission adopted the proposal for a Directive on 9 July 19971.
The proposal was transmitted to the European Parliament, the Council and the Economic
and Social Committee on 22 September 1997.
The Economic and Social Committee adopted its opinion on 25 February 1998.
On 30 April 1998, the European Parliament adopted, on first reading and in accordance
with the codecision procedure (Article 189b), a legislative resolution approving, subject
to amendments contained in this resolution, the Commission's proposal and calling on
the Commission to alter its proposal accordingly.
2. The amended proposal
2.1 The European Parliament's amendments
The initial proposal has been amended to incorporate those amendments -which are
acceptable for the Commission. In this respect, the Commission has accepted as many
amendments as possible to take account of the European Parliament's aim to clarify and
strengthen the proposal. Accordingly, amendments 1, 2, 3, 4, 6, 7, 8, 10, 12, 13, 14, 15,
 16, 17, 19, 23, 24 and 25, which are designed to clarify the initial text and to strengthen
the objectives of the Directive, have been incorporated into the amended proposal, either
 in their integrity or at least in spirit.
However, the Commission is unable to accept:
          - Amendments 5 and 20 which go beyond the objectives of the Directive by
extending its scope of application.
          - Amendments 9, 11, 18, 21, 22 and part of 23, which are not entirely clear and
 could create legal insecurity.
   Com (97) 356 final published in the OJ n° C314 of 16.10.1997
 ---pagebreak--- 2.2 The amendments incorporated in the proposal
The Commission's amended proposal is set out in the right hand column, with the
amendments to the initial proposal underlined.
For ease of understanding and comparison, the left-hand column shows the wording of
the Commission's initial proposal. Only amended Recitals and Articles figure on this list.
Recital 2 fully incorporates Parliament's amendment 1.
Recital 3 adopts Parliament's amendment 2 in spirit but replaces the text by the exact
wording of the Treaty
Recital 3 a) new corresponds exactly to Parliament's amendment 3
Recital 3 b) new corresponds exactly to Parliament's amendment 4
Recital 5b) new corresponds exactly to Parliament's amendment 25
Recital 6 corresponds exactly to Parliament's amendment 6
Recital 8 a) new adopts Parliament's amendment 7 in spirit but adds the words "possible
future" before Community or national provisions since no such legislation exists so far
Recital 8 b) corresponds exactly to Parliament's amendment 8
Recital 10 a) adopts partially Parliament's amendment 23 but in the more appropriate
format of a recital instead of an addition to Article 3c
Recital 10 b) adopts Parliament's amendment 10 but replaces the words "legally provided
service", a notion which is not defined in the Directive by "protected service" as defined
in Article 1 a)
Recital 13 a) corresponds exactly to Parliament's amendment 12
Recital 14 a) new corresponds exactly to Parliament's amendment 13
Recital 14 b) new adopts Parliament's amendment 14 in spirit without the quote of the
Commission's Communication on the role of penalties in implementing Community
Internal Market legislation
Recital 15 corresponds exactly to Parliament's amendment 15
Recital 15 a) new adopts Parliament's amendment 16 but replaces the word "right" by
"ability" because legally speaking viewers do not have such a "right" of access
Recital 16 a), corresponds exactly to Parliament's amendment 17
Article 1 a) corresponds exactly to Parliament's amendment 19
Article 4.2 also corresponds exactly to Parliament's amendment 24
                                              i
 ---pagebreak--- Amended proposal for a European Parliament and Council Directive on the Legal
Protection of Services based on, or consisting of, Conditional Access
             Initial Proposal                            Amended Proposal
Recital 2:
Whereas the cross-border provision of       Whereas the cross-border provision of
broadcasting and Information Society        broadcasting and Information Society
services may contribute significantly to    services may contribute, from the individual
the achievement of these objectives;        point of view, to the full effectiveness of
                                            freedom of expression as a fundamental
                                            right and, from the collective point of view,
                                            significantly to the achievement of the
                                            objectives laid down in the Treaty
Recital 3:
Whereas the Treaty provides for the free    Whereas the Treaty provides for the free
movement of all services provided against   movement of services which are normally
remuneration ; whereas this right, as       provided for remuneration ; whereas this
applied to broadcasting and Information     right, as applied to broadcasting and
Society services, is also a specific        Information Society services, is also a
manifestation in Community law of a         specific manifestation in Community law of
more general principle, namely the          a more general principle, namely the
freedom of expression as enshrined in       freedom of expression as enshrined in
Article 10 of the European Convention for   Article 10 of the European Convention for
the Protection of Human Rights and          the Protection of Human Rights and
 Fundamental Freedoms;                      Fundamental Freedoms; whereas this
                                            Article explicitly recognises the right of the
                                            citizens to receive and impart information
                                            regardless of frontiers and whereas any
                                            restriction of that right must be based on
                                            due consideration of other legitimate
                                            interests deserving of legal protection;
 Recital 3a) new
                                             Whereas conditional access systems should
                                             not be used for the sole purpose of refusing
                                             access for consumers in some Member
                                             States to services which are freely available
                                             in other Member States,
                                              X
 ---pagebreak--- Recital 3 b) new
                                             Whereas this Directive should grant
                                            protection against illicit (pirated) devices
                                            i.e. devices which are explicitly designed or
                                            technically adapted for unauthorised
                                            reception;
Recital 5b) new
                                            Whereas the encryption of broadcasting
                                            services                must               not
                                            inconsiderately deprive the average viewer
                                            of     these    services    if   they     were
                                            orginally available without charge;
Recital 6
Whereas the opportunities offered by         Whereas the opportunities offered by digital
digital technologies provide the potential  technologies provide the potential to
to increase consumer choice and              increase consumer choice and contribute to
contributing to cultural pluralism, by       cultural pluralism, by developing an even
developing an even wider range of            wider range of services within the meaning
services within the meaning of Articles 59   of Articles 59 and 60 of the Treaty; whereas
and 60 of the Treaty; whereas the viability  the viability of these services will often
of those services will often depend on the   depend on the use of Conditional Access in
use of Conditional Access in order to        order to ensure remuneration of the service
 obtain the remuneration of the service      provider; whereas accordingly the legal
 provider;                                   protection of service providers against illicit
                                              devices which allow access to these services
                                              free of charge seems necessary in order to
                                              ensure the economic viability of the services
 Recital 8 a) new                             Whereas this Directive is without prejudice
                                              of possible future Community or national
                                              provisions meant to ensure that a number of
                                              broadcasting services, recognised as being
                                              of public interest, are not based on
                                              conditional access;
  Recital 8 b) new                             Whereas this Directive is without prejudice
                                               of the cultural aspects of any further
                                               Community action concerning new services,
                                                  £
 ---pagebreak--- Recital 10 a) new Whereas these commercial activities which
                  concern illicit devices include commercial
                  communications covering all forms of
                  advertising, sponsorship, sales promotion
                  and public relations promoting such
                  products and services;
Recital 10 b) new Whereas it seems necessary to ensure that
                  Member States shall provide adequate legal
                  protection against any individual or group
                  using an illicit device for direct or indirect
                  profit, knowingly or with reasonable
                  grounds to know that they will enable or
                  facilitate without authority the
                  circumvention of any effective,
                  technological measure designed to protect
                  the remuneration of a protected service
Recital 13 a) new Whereas the sanctions and remedies
                  provided for under this Directive are
                  without prejudice to any other sanction or
                  remedy for which provisions may be made
                  under national law, such as preventive
                  measures in general or seizure of illicit
                  devices;
Recital 14 a) new Whereas in accordance with Article 5 of the
                  Treaty, the Member States are required to
                  take all measures necessary to guarantee the
                  application and effectiveness of Community
                  law, in particular by making the penalty
                  chosen      effective,    proportionate      and
                  dissuasive,
Recital 14 b) new Whereas when adopting the provisions laid
                  out by this Directive, Member States should
                  be in accordance with the Communication
                  from the Commission to the Council and the
                  European Parliament on the role of penalties
                  in implementing Community Internal
                  Market legislation;
                       }
 ---pagebreak--- Recital 15:
Whereas this Directive should be without    Whereas this Directive is without prejudice
prejudice to the application of national    to any measures by Member States seeking
provisions which may prohibit the private   to prohibit the private possession of illicit
possession of illicit devices; whereas this devices; whereas this Directive is without
Directive is without prejudice to the       prejudice to the application of the
application of Community competition        Community competition rules; whereas this
rules; whereas this Directive is without    Directive is without prejudice to the
prejudice to the application of Community   application of Community rules concerning
rules concerning intellectual property      intellectual property rights
rights
Recital 15 a) new                           Whereas this Directive is without prejudice
                                            to the ability of the viewer to have access to
                                            free-to-air channels within a conditional
                                            access service platform without being
                                             required to pay an additional fee beyond the
                                             normal charge for accessing the platform;
Recital 16 a) new                            Whereas a balance must be secured between
                                             the interest of the service providers and
                                             copyright holders to be remunerated for
                                             their services (by encryption) on the one
                                             hand and the interest of the general public
                                             not to be excluded more and more from
                                             information and cultural events;
 Article 1 a):
 ....or the provision of conditional access This term also covers the provision of
 to the above service in its own right       conditional access to the above services,
                                             considered as a service in its own right.
 Article 4.2
 Each Member State shall take the             Each Member State shall take the measures
 measures necessary to ensure that service    necessary, pursuant to its legislation, to
 providers, whose interests are affected by   ensure that service providers, whose
 an infringing activity carried out on its    interests are affected by an infringing
 territory, can bring an action for damages   activity carried out on its territory, can bring
 and/ apply for an injunction and, where      an action for damages and/ apply for an
 appropriate, for the seizure of illicit      injunction and, where appropriate, for the
 devices                                      seizure of illicit devices
                                               g
 ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(98) 332 final
                                             DOCUMENTS
EN                                                            10 09 01 06
                                    Catalogue number : CB-CO-98-339-EN-C
                                                             ISBN 92-78-36473-8
Office for Official Publications of the European Communities
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