Documents considered by the Committee on 9 February 2011 - European Scrutiny Committee Contents

5   Conditional access services




COM(10) 753

+ ADD 1




COM(10) 755

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

Legal base(a)  Articles 207(4) and 218(5) TFEU; QMV

(b)  Articles 207(4) and 218(6)(a)(v) TFEU; QMV; EP consent

Document originated(Both) 15 December 2010
Deposited in Parliament(Both) 22 December 2010
DepartmentCulture, Media and Sport
Basis of considerationEM of 14 January 2011
Previous Committee ReportNone
To be discussed in CouncilNo date set
Committee's assessmentLegally important
Committee's decisionNot cleared; further information requested


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.


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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