5 Conditional access services
| (a)
(32375)
18124/10
COM(10) 753
+ ADD 1
(b)
(32376)
18126/10
COM(10) 755
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Draft Council Decision on the signing of the European Convention on the legal protection of services based on, or consisting of, conditional access
Commission staff working paper: Comparative chart of Directive 98/84/EC and the European Convention on the legal protection of services based on, or consisting of, conditional access
Draft Council Decision on the conclusion of the European Convention on the legal protection of services based on, or consisting of, conditional access
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| Legal base | (a) Articles 207(4) and 218(5) TFEU; QMV
(b) Articles 207(4) and 218(6)(a)(v) TFEU; QMV; EP consent
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| Document originated | (Both) 15 December 2010
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| Deposited in Parliament | (Both) 22 December 2010
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| Department | Culture, Media and Sport
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| Basis of consideration | EM of 14 January 2011
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| Previous Committee Report | None
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| To be discussed in Council | No date set
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| Committee's assessment | Legally important
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| Committee's decision | Not cleared; further information requested
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Background
5.1 In 1998, the Council and European Parliament adopted a
Directive on the legal protection of services based on, or consisting
of, conditional access.[41]
The Directive concerns television and radio broadcasting or information
society services offered to the public which require the payment
of a fee to the service provider in order to access the service.
The Directive is an internal market measure which seeks to promote
consumer choice and cultural pluralism by establishing a common
EU-wide legal framework to ensure the economic viability of broadcasting
and information society services based on conditional access.
It does so by requiring Member States to take measures prohibiting
any commercial activity relating to an illicit device (equipment
or software) which is designed or adapted to facilitate unauthorised
access to broadcasting or internet services offered against payment,
including all of the following:
- the manufacture, import, distribution, sale, rental or possession
of illicit devices;
- the installation, maintenance or replacement
of an illicit device; and
- the use of commercial communications to promote
illicit devices.
5.2 Member States are also required to make provision
for "effective, dissuasive and proportionate" sanctions
for these prohibited activities and to ensure that service providers
have access to certain remedies, such as injunctive relief or
damages. However, the choice of appropriate sanctions is left
to Member States and the Directive states expressly that they
need not be criminal sanctions.[42]
5.3 In 2001, the Council of Europe agreed a European
Convention on the legal protection of services based on, or consisting
of, conditional access which largely reproduces the content of
the 1998 EU Directive. In recognition of the similarity between
the two instruments, Article 11(4) of the Convention provides:
"In their mutual relations, Parties which are
members of the European Community shall apply Community rules
and shall not therefore apply the rules arising from this Convention
except in so far as there is no Community rule governing the particular
subject concerned."
5.4 The Convention, like the 1998 Directive,
requires the Parties to introduce sanctions which must be "effective,
dissuasive and proportionate to the potential impact of the unlawful
activity", but leaves it to the Parties to determine whether
the sanctions are criminal, administrative, or take some other
form.[43]
5.5 Article 12(1) of the Convention provides
for the participation of the European Community (since succeeded
by the European Union).
The draft Council Decisions
5.6 The Commission has proposed two draft Council
Decisions. The first — document (a) — would authorise
signature of the Convention on behalf of the European Union. The
second — document (b) — would authorise the EU formally
to approve, and consent to be bound by, the European Convention.
Both draft Decisions are based on Article 207(4) of the Treaty
on the Functioning of the European Union (TFEU) which establishes
the procedures for negotiating and concluding agreements with
third countries or international organisations which fall within
the scope of the EU's common commercial policy. The common commercial
policy covers "tariff and trade agreements relating to trade
in goods and services, and the commercial aspects of intellectual
property, foreign direct investment, the achievement of uniformity
in measures of liberalisation, export policy and measures to protect
trade such as those to be taken in the event of dumping or subsidies."[44]
5.7 Agreements implementing the common commercial
policy are agreed by the Council by a qualified majority, but
unanimity is required for:
- agreements which include provisions
for which unanimity is required for the adoption of internal rules;
or
- agreements in the field of trade in cultural
and audiovisual services, where these agreements risk prejudicing
the Union's cultural and linguistic diversity. [45]
5.8 Both draft Council Decisions cite, in addition
to Article 207(4), provisions contained in Article 218 TFEU which
set out the procedures applicable to EU decisions authorising
the signature and conclusion of an agreement with an international
organisation. Qualified majority applies for the adoption of both
draft Council Decisions, unless they fall within one of the exceptions
listed in Article 218(8). So, for example, unanimity would be
required "when the agreement covers a field for which unanimity
is required for the adoption of an act of the Union".
5.9 In its explanatory memoranda accompanying
the draft Council Decisions, the Commission expresses concern
that the domestic laws of a number of non-EU European States do
not provide adequate legal protection for the providers of conditional
access services and may become havens for the development or distribution
of hacking devices. It says that ratification of the European
Convention by the European Union should encourage broader ratification
and thereby extend legal protection beyond the borders of the
EU.
5.10 The Commission highlights some minor textual
differences between the 1998 Directive and the European Convention
but says that these do not affect the content or scope of the
legal protection provided under each instrument. The Commission
staff working paper accompanying the first draft Council Decision
(ADD 1) provides a useful comparative table. The Commission adds
that the "disconnection clause" in Article 11(4) of
the Convention (cited above) "ensures the primacy of EU rules."
The Government's view
5.11 The Minister for Culture, Communications
and Creative Industries (Mr Edward Vaizey) says that the 1998
Directive was implemented by the Conditional Access (Unauthorised
Decoders) Regulations 2000 (SI 2000 No. 1175) which took effect
on 28 May 2000. He adds that EU ratification of the Convention
would have no impact on UK law as "the UK has already implemented
the requirements of the Convention." The Minister does not
express a view on whether EU ratification of the European Convention
would encourage more non-EU member countries of the Council of
Europe to ratify it, but indicates that the Government "would
not disagree" with the Commission's analysis that extending
the provisions contained in the European Convention to more member
countries of the Council of Europe would be beneficial in tackling
piracy.
5.12 The Minister says that no subsidiarity issues
arise because the draft Council Decisions relate to an area of
exclusive EU competence. He also tells us that the Government's
preliminary view is that unanimity will apply for the adoption
of both draft Decisions, but that the Government is seeking to
clarify the voting procedures with the Council Legal Service.
He adds that the Government considers that the UK's Opt-in Protocol
applies.
Conclusion
5.13 We accept that the European Convention
largely replicates the 1998 Directive and that the legal consequences
of ratification by the European Union are likely to be minimal.
We should be grateful if the Minister would comment specifically
on the likely practical consequences in light of the Commission's
assertion that EU ratification would galvanise other non-EU member
countries of the Council of Europe to ratify and implement the
Convention.
5.14 We are surprised that that the Minister
does not question the Commission's choice of legal base. We would
have expected the draft Council Decisions to reflect the legal
bases cited in the 1998 Directive — which concern the internal
market and the freedom to provide services — and do not
understand why a legal base relating to the EU's common commercial
policy has been chosen instead. We therefore ask the Minister
to tell us:
- whether he considers that
Article 207(4) TFEU is the correct legal base and, if so,
- what his reasons are for considering that
an internal market legal base is no longer appropriate.
5.15 We note that Article 3 TFEU states that
the European Union has exclusive competence for the common commercial
policy, whereas competence in relation to the internal market
is shared. Protocol No. 25 on the exercise of shared competence
states that when, in a case such as this, the Union has already
taken action in an area of shared competence, "the scope
of this exercise of competence only covers those elements governed
by the Union act in question and therefore does not cover the
whole area." We think it is important to establish the basis
on which the European Union has acquired exclusive competence
and the extent of that competence, and ask the Minister to provide
us with a detailed explanation.
5.16 Our analysis of the legal bases cited
in the draft Council Decisions leads us to believe that they are
subject to qualified majority voting because they do not appear
to fall within the exceptions in Articles 207(4) or 218(8). The
Minister expresses some doubt as to the voting procedure, but
suggests that it should be unanimity. We ask the Minister to tell
us why he believes that unanimity should apply.
5.17 The Minister also considers that the
UK's Opt-in Protocol applies, even though the draft Council Decisions
do not cite a legal base in Title V of Part Three of the TFEU
and do not include any reference to the Opt-in. The only reason
we can see for invoking the Opt-in is because the 1998 Directive
and Convention leave open the possibility of introducing criminal
sanctions. However, neither instrument obliges the UK to do so.
Invoking the Opt-in in relation to all EU instruments requiring
Member States to introduce sanctions, but without prescribing
the nature of the sanctions, would represent a very significant
extension of the scope of application of the Opt-in Protocol.
Moreover, it is difficult to see how the Opt-in could apply in
practice in this case, given that the UK is already bound by the
1998 Directive and cannot release itself from its obligations
under the Directive without breaching EU law. Article 11(4) of
the European Convention re-affirms the primacy of the obligations
accepted by EU Member States as a matter of EU law. We therefore
ask the Minister to explain:
- why he considers that the
UK's Opt-in applies;
- whether he considers that the draft Council
Decisions should cite a legal base in Title V of Part Three of
the TFEU and, if so, to identify the relevant Treaty Article/s;
- whether and, if so, how the draft Council
Decisions should be amended to include a reference to the UK's
Opt-in; and
- how the UK could exercise its Opt-in in a
way that would not put it in breach of its existing obligations
under the 1998 Directive.
5.18 We intend to hold both draft Council
Decisions under scrutiny pending the Minister's response.
41 Directive 98/84/EC, OJ L 320, 28.11.98, p.54. Back
42
See recital 23 and Article 5 of the Directive. Back
43
Article 5 of the Convention. Back
44
Article 207(1) TFEU. Back
45
Article 207(4), sub-paragraphs (2) and (3)(a). Back
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