Select Committee on European Union Minutes of Evidence

Suggested e-commerce relevant amendments to Exemptions and Regulated Activities Orders

"Mere Conduits"—Section 23 Exemptions Order

The "principal purpose" limitation discriminates against multi-purpose companies as well as being inconsistent with parallel provisions in the E-commerce Directive;

  The limitation to content "devised by a customer" would render the "mere conduit" concession ineffective for the majority of internet delivered content that will originate from third parties who are not the service supplier's customers but instead are either customers of other service suppliers or are other third party sources;

  The language of sub-paragraph (c) should be amended to clarify that automated technical processes involved in the processing of information do not, for the purposes of the sub-paragraph, constitute "select, modify or otherwise exercise control . . .";

  There should be an unqualified exemption for the providers of mere telecommunications where the limitations noted above are particularly inappropriate;

  There should be an express provision to exclude hypertext links, but subject to "notice and take down".

Media Neutrality—S15 Exemption and Ss 78 & 79 Regulated Activities Orders

  The position of online communications should be clarified with the aim of achieving the wider government objective of neutrality in media regulation.

  The term "equivalent publication conveyed by means of a telecommunications system" contained in the Exemption Order is uncertain and discriminates against online media.

  Sections 78 and 79 of the Regulated Activities Order, which provide exemptions from investment advice regulation to certain categories of media, have not been modernised to provide for the positions of online suppliers, other than suppliers of teletext services. The Investment Business (Jersey) Law 1998 provides a good drafting template for modernising media exemptions (Article 3, Second Schedule).

The Publishers Defence

  A provision equivalent to section 57(4) of the Financial Services Act should be restored.


  Under the existing regime, it is lawful for any unauthorised person to pass on an investment communication which at some point previously had been issued or approved by an authorised person. The new draft regime leaves unclear the position of further communication by an unauthorised person. In order to avoid unnecessary uncertainty for online service suppliers, HMT should clarify that once a communication has been approved, any further communication of the approved contents is not caught by the Section 19 prohibition.

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