4 Conditional access services
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COM(10) 753
(b)
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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
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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| Department | Culture, Media and Sport
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| Basis of consideration | SEM of 13 February 2014
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| Previous Committee Reports | HC 428-xliv (2010-12), chapter 14 (14 December 2011); HC 428-xlii (2010-12), chapter 8 (23 November 2011); HC 428-xxx (2010-12), chapter 7 (22 June 2011); HC 428-xxiv (2010-12), chapter 2 (27 April 2011); HC 428-xvi (2010-11), chapter 5 (9 February 2011)
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| Discussion in Council | No date set
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| Committee's assessment | Legally and politically important
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| Committee's decision | Not cleared; further information requested
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Background and previous scrutiny
4.1 Conditional access services are services offered
by broadcasting or internet service providers in return for payment,
such as pay-TV or other on-demand services. The purpose of the
draft Council Decisions is to authorise the EU to sign and accede
to a Council of Europe Convention on the legal protection of services
based on, or consisting of, conditional access. The Convention
largely replicates the provisions of an EU Directive adopted in
1998 which prohibits the manufacture, import, distribution, sale,
rental or possession for commercial purposes of devices (such
as pirate decoders, smart cards and software) which are designed
to facilitate unauthorised access to protected services, but the
scope of application of the Convention is potentially much wider
because the Council of Europe has a larger membership than the
EU. The Convention entered into force in July 2003 but relatively
few Council of Europe members have acceded to it. EU accession
would, the Commission believes, encourage more European countries
to do so, thereby strengthening legal protection for legitimate
providers of conditional access services beyond the EU's borders,
reducing piracy, and creating a more secure trading environment.
4.2 The 1998 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. By contrast, the draft Decisions
originally proposed by the Commission (in December 2010) to authorise
signature and EU accession to the Convention cited as their substantive
legal base Article 207(4) of the Treaty on the Functioning of
the European Union (TFEU) which concerns the EU's common commercial
policy and is an area of exclusive EU competence.
4.3 The Government, supported by other Member States,
considered that the draft Decisions should cite Article 114 TFEU
— an internal market legal base — instead of Article
207(4) TFEU, and that Member States should be included as parties
to the Convention, in addition to the EU. Whilst the Government
accepted that the EU had acquired exclusive external competence
over most elements of the Convention, it highlighted two provisions
— on confiscation measures (Article 6 of the Convention)
and on the provision of mutual legal assistance (Article 8) —
in which competence was shared with Member States. It considered
that both of these provisions fell within the scope of the UK's
Title V (justice and home affairs) opt-in and that, as the EU
had not yet exercised competence in the areas covered by these
Articles, Member States remained free to do so. As a precaution,
to hedge against the possibility that the EU had acquired some
competence in relation to either Article, the Government also
notified us that it had decided to opt into the draft Decisions,
even though neither cited a Title V legal base, adding:
"Whether the opt-in has practical effect
in such circumstances is a question that can ultimately only be
answered by the ECJ [Court of Justice of the European Union] but
the Government considers that it is in the UK's best interests
to continue to defend the application of the opt-in to provisions
falling within Title V, even where there is no citation of a Title
V legal base."[18]
4.4 The draft Decision on signature of the Convention
was formally adopted by the Council, with UK support, in November
2011.[19] It cited Article
114 TFEU as its substantive legal base, stipulated that both the
EU and Member States should sign the Convention, and made clear
that the EU had exclusive competence in relation to all elements
of the Convention other than Article 6 (on confiscation) and Article
8 measures relating to confiscation. The adopted Decision made
no reference to the application of the UK's Title V opt-in Protocol
(Protocol No. 21) but the Government told us that it had tabled
a statement at the Council to record its view that:
"even in the absence of the citation of
a legal base in TFEU Title V, the European Union's competence
to enter into the JHA [justice and home affairs] obligations (in
Article 8 of the Convention which concern cooperation in investigations
and judicial proceedings save insofar as those obligations relate
to Article 6 of the Convention and are being entered into by the
Member States) derives from TFEU Title V and accordingly the United
Kingdom will be bound by virtue of the fact that it has exercised
its opt-in under Protocol No. 21 to the TEU [Treaty on European
Union]."[20]
4.5 Our earlier Reports provide a more detailed overview
of the draft Decisions and the Government's position.[21]
We cleared both draft Decisions from scrutiny in December 2011.
The Government's Supplementary Explanatory Memorandum
4.6 The Minister for Culture, Communications and
Creative Industries (Mr Edward Vaizey) has submitted a Supplementary
Explanatory Memorandum on the draft Decisions, even though they
have been cleared from scrutiny, because a ruling given by the
Court of Justice last October has annulled the draft Decision
on signature, whilst maintaining its effects for up to six months
pending the adoption of a new Council Decision. The Minister
explains:
"This has resulted in the Commission re-proposing
its original proposal (which has Article 207(4) TFEU as its legal
base) without going through the normal processes for approving
and communicating a new proposal. Although this has come from
the Commission, it has done so in such a way that no new document
has been registered so there is nothing to deposit and trigger
a fresh scrutiny process. This is somewhat irregular, but it
is clear that a supplementary explanatory memorandum is required
to ensure that Committees are aware of the background to this,
the wider implications, and are content that we proceed. We anticipate
that the Presidency will want to move this issue along quickly
to try to secure formal adoption before the ECJ's 6 month suspension
runs out towards the end of April."[22]
The Court's ruling on the draft Decision on signature[23]
4.7 The action for annulment was brought by the Commission
on the grounds that the Council of Europe Convention falls within
the scope of the EU's common commercial policy, is therefore
an area of exclusive EU competence, and should be based on Article
207(4) TFEU. The UK was one of five Member States intervening
in support of the Council's position that Article 114 TFEU is
the correct legal base and that the EU has no power, under Article
207 TFEU, to conclude an international agreement involving judicial
cooperation and seizure and confiscation measures of a criminal
law nature.
4.8 In its judgment, the Court reiterates its settled
case law that the choice of legal base must rest on objective
factors, including the aim and content of the measure in question,
that are amenable to judicial review, adding:
"If examination of that measure reveals
that it pursues a twofold purpose or that it has a twofold component
and if one of those is identifiable as the main or predominant
purpose or component, whereas the other is merely incidental,
that measure must be based on a single legal basis, namely that
required by the main or predominant purpose or component."[24]
4.9 The Court concludes that the primary objective
of the draft Decision, in authorising the EU to sign the Council
of Europe Convention, is to facilitate international trade between
the providers of conditional access services based in the EU and
other European countries by extending the legal protection secured
within the EU by the 1998 Directive to non-EU members of the Council
of Europe. The Court adds that:
"since the approximation of the legislation
of Member States in the field concerned has already been largely
achieved by Directive 98/84, the primary objective of the Convention
is not to improve the functioning of the internal market, but
to extend legal protection of the relevant services beyond the
territory of the European Union and thereby to promote international
trade in those services."[25]
4.10 As regards Articles 6 and 8 of the Convention
on confiscation measures and judicial cooperation, the Court notes
that these provisions are intended generally to ensure effective
legal protection for conditional access services throughout the
territories of the Contracting Parties and are "purely incidental"
to the primary objective of the draft Decision.
4.11 Turning to the application of the UK's Title
V opt-in Protocol, the Court observes:
"Protocol (No. 21) on the position of the
United Kingdom and Ireland in respect of the area of freedom,
security and justice and Protocol (No. 22) on the position of
Denmark, which are annexed to the TEU and the TFEU, are not capable
of having any effect whatsoever on the question of the correct
legal basis for the adoption of the contested Decision.
"Indeed, it is the legal basis for a measure
— the appropriateness or otherwise of which falls to be
assessed [...] on the basis of objective factors such as main
or predominant purpose of the measure and its content —
which determines the Protocols to be applied, and not vice versa.
"In the present case, it can be seen from
the above analysis that the appropriate legal basis is the one
relating to the common commercial policy, which is not covered
by Protocols Nos. 21 and 22."[26]
The Government's position
4.12 The UK has implemented the 1998 Directive and
"would not disagree" with the case advanced by the Commission
that extending the protection conferred by the Directive to the
broader membership of the Council of Europe might help limit further
damage from piracy. The Minister explains that the UK intervened
in the case brought by the Commission in support of the Council:
"in order to resist the expansion of the
EU's external competence at the expense of that of Member States,
and to promote the use of mixed agreements where there is shared
competence."[27]
4.13 He adds:
"Given that the Court annulled the Decision
because it was adopted on the wrong legal base, it did not need
to examine the issue of the correct test for exclusive external
competence, because the correct legal base, TFEU Article 207,
expressly confers exclusive external competence. The Court dismissed
any possibility that Protocols 21 and 22 were capable of having
any effect.
"Since the decision of the ECJ is final,
the UK and other Member States have no option but to accept that
the correct legal base is Article 207 for the Convention. That
being so, and since the overall policy objective of the Convention
remains sensible, the Government is seeking approval to agree
the Decision on that basis. Although undoubtedly a setback from
a broader point of view, the broader issue of competence remains
in play, and the Government will remain vigilant and challenge
the Commission wherever it appears they are exceeding their remit."[28]
4.14 The Minister notes that annulment of the Decision
on signature will take effect at the latest on 22 April 2014.
A successor Decision, based on Article 207(4) TFEU, will therefore
need to be in place before then to ensure that signature of the
Council of Europe Convention (which took place on 21 December
2011) is not called into question.
Conclusion
4.15 We recall that, in earlier correspondence
on the draft Decisions, the Minister told us:
"In our view, a JHA obligation in a measure
should never be regarded as ancillary for the purpose of the predominant
purpose test and will always justify the citation of a JHA legal
base. In such circumstances we consider that the UK is not bound
by a measure which creates JHA obligations unless we have opted
in pursuant to the Protocol. We consider this is the case irrespective
of whether a JHA legal base has been cited. Furthermore, if we
are unsuccessful in arguing that a JHA legal base should be cited
in a Council Decision, we would nonetheless assert that the opt-in
applies where an international agreement creates obligations in
the JHA field, however minor, as they are in these Decisions."[29]
4.16 The Minister describes the Court's ruling
on the Decision authorising the EU to sign the Council of Europe
Convention on the legal protection of conditional access services
as "undoubtedly a setback". In our view, its significance
is far greater, as it appears categorically to discredit the Government's
policy of asserting that the UK's Title V (justice and home affairs)
opt-in can apply to EU measures which do not cite a Title V legal
base. We note that, in intervening in the case in support of
the Council, the UK did not press for the inclusion of a Title
V legal base — the only outcome which would have laid to
rest any doubts about the application of the UK's opt-in Protocol.
4.17 In light of the Court's ruling, we ask the
Minister whether he accepts that it is no longer open to the UK
to assert that its Title V opt-in applies to the draft Decisions
on signature and conclusion, or to any other EU measures containing
obligations in the justice and home affairs field, unless the
Government succeeds in securing the inclusion of a Title V legal
base?
4.18 We trust that the Court's judgment in this
case, and in another case last September involving an amendment
to the social security provisions of the EEA Agreement,[30]
will have caused the Government to review its policy on the scope
of application of the UK's Title V opt-in Protocol. We ask the
Minister to confirm that such a review has been undertaken as
a matter of urgency, given its important implications for many
of the documents we have under scrutiny, and to provide an assurance
that we will be informed of the outcome as soon as possible.
Pending the Minister's response, the draft Decisions remain under
scrutiny.
18 Letter of 26 May 2011 from the Minister for Culture,
Communications and Creative Industries (Mr Edward Vaizey) to the
Chair of the European Scrutiny Committee. Back
19
Council Decision 2011/853/EU, OJ No. L 336, 20.12.2011 p.1. Back
20
Letter of 7 December 2011 from the Minister for Culture, Communications
and Creative Industries (Mr Edward Vaizey) to the Chair of the
European Scrutiny Committee. Back
21
See headnote. Back
22
Para 5 of the Minister's Supplementary Explanatory Memorandum. Back
23
Case C-137/12, 22 October 2013. Back
24
Para 53 of the Court's judgment. Back
25
Para 67 of the Court's judgment. Back
26
Paras 73-5 of the Court's judgment. Back
27
Para 16 of the Minister's Supplementary Explanatory Memorandum. Back
28
Paras 17-18 of the Minister's Supplementary Explanatory Memorandum. Back
29
Letter of 7 December 2011 from the Minister for Culture, Communications
and Creative Industries (Mr Edward Vaizey) to the Chair of the
European Scrutiny Committee. Back
30
Case C-431/11 and (32587) 7591/11, (33298) 16231/11 and (33815)
8556/12, reported in HC 83-xxvi (2013-14), chapter 7 (8 January
2014). Back
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