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Yvon Thiec

Directive on Services in the Internal Market

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- What are the challenges in the Directive on Services in the audiovisual sector? Yvon Thiec, Eurocinema's General Delegate, tells us more about this controversial Directive.

The "Directive Bolkestein" proposal, which aims at liberalising the European service market, is one of the main initiatives of the European Commission within the ambit of the Lisbon Strategy. Presented in January 2004, the Directive has been strongly criticised by several organisations. The main criticism is that the Directive will encourage "social dumping" within the European Union. Cineuropa met Yvon Thiec, Délégué Général of Eurocinema, to hear his point of view on the impact of the Directive on the Audiovisual market.

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Is the audiovisual sector concerned by the Directive

The explanatory memorandum of the Directive indicates that the definition of services set out in Article 2 (“services supplied by providers established in a Member State”) and in Article 4.1) which defines a service as “any self-employed economic activity … consisting in the provision of a service against consideration”, fully covers audiovisual services (see page 21 of the explanatory memorandum).

What are the consequences of the Directive on the Audiovisual Market?

There are 4 general remarks to make:

1. It is worth pointing out the very general purpose pursued by the Services directive: the proposal for a directive aims at achieving “the elimination of legal obstacles to the freedom of establishment for service providers and the free movement of services”.

2. Moreover, this concern rules out taking into account any other concern of social, educational and cultural value. However, audiovisual services cannot be reduced merely to an economic service, a market service, once they include components intended to enhance cultural diversity, pluralism of cultural contents.

3. The proposal for a directive under scrutiny tends to gloss over the specific features of services and define their common characteristics. Thus, a cinematographic film, an insurance policy, transport of funds and games of chance are all the same as far as this directive is concerned.

4. At the same time, the Services directive provides for two types of derogation from its scope. On reading this series of general derogations (finance, telecoms, transport), the first question that arises is why certain sectors of activity which fall under the definition as services will continue to be covered by sector-specific legislation, while others will not. Indeed, like the above-mentioned services (finance, telecoms, transport), audiovisual services are covered by a series of Community texts leading to the creation of coherent sector-specific Community legislation, and therefore “overall legislation”, to use the Commission’s terminology.

Can the Service Directive coexist with the Television Without Frontier Directive?

The Service Directive jeopardises the Television without frontiers directive (directive 89/552/CEE amended by directive 97/36/CE). The Television Without Frontiers directive (Article 3) provides that member states have the option, for the broadcasters under their jurisdiction, to provide for stricter or more detailed rules in the fields covered by the present directive. However, the proposal for the Services directive does not guarantee the option currently offered to member states to keep benefiting from Article 3 of the Television Without Frontiers directive, i.e. to provide for stricter rules in terms of quotas for diffusion of European works or independent production. It is to be feared that the Services directive is intended to challenge the national power the Television Without Frontiers directive explicitly emphasizes.

Which other sectors are covered by the Service Directive ?

Responsibilities exercised by the member states with regard to control of media ownership, broadcasting licences, ‘must carry’ rules, and media chronology rules, that is, all rules without which audiovisual services would be unable to function and develop and which reflect the "specificity" of audiovisual services.

Encrypted services

In the preparatory work on the Services directive, the Commission indicates that encrypting television programmes in order to avoid reception of these programmes outside the member state where the broadcaster is established is a good barrier to the free circulation of cross-border services. The modification of the encrypted services may damage the maximisation of revenue. In fact, broadcasters acquire the rights for this geographical area and for the relevant language version. As these are exclusive programmes (films), these programmes are sold territory by territory in order to allow appropriate exploitation and maximisation of revenue.

Media chronology

The chronology is not coordinated for the whole European internal market: there is not a simultaneous release of the same film on all territories, i.e. the whole internal market.

Each territory orders the start of the exploitation of the work. Likewise, the chronology may last for a different length of time depending on the territories concerned (from one to three years). This depends on the number of exploitation “windows”. A reasonable exploitation period is guaranteed for each window.

In the Television Without Frontiers directive (97/36/EC of 30 June 1997), this extremely complex and fragile mechanism is guaranteed by Article 7 which organises the media chronology on a contractual basis.

The media chronology, as validated by the Television Without Frontiers directive, is analysed as a practice that the Services directive aims to end.

Must carry

This legal provision compels cable companies to broadcast certain television services in order to contribute to the pluralism of programming.

The proposal for a directive seems to challenge this obligation. Indeed, one of the grounds for the proposal (clause 34, page 37 of the Services directive) is that: Among the requirements to be examined are "must carry" rules applicable to cable operators which, by imposing an obligation on an intermediary service provider to give access to certain services delivered by specific service providers, affect his freedom of choice, access to programmes and the choice of the recipients”.

Which solutions or modifications will you bring to the Directive ?

The Commission settles for mentioning that the Services directive will not harm the Television Without Frontiers directive. However, the cumulative effect of a “strong” principle such as the Services directive and a subtler principle such as the Television Without Frontiers directive, it is obvious that only the strong principle will triumph at the expense of the weaker principle. That is why it is necessary to come back to the classic formulation of community law "the present directive applies without prejudice of existent directives"

It is necessary to consider that the sector-specific instrument on audiovisual matters for the internal market, in this case the Television Without Frontiers directive, applies in an exhaustive and priority manner, which rules out application of the horizontal rules laid down by the directive on services.

Where there are obviously still legal barriers (apart from linguistic and cultural barriers) to the development of the internal market for audiovisual services, the future revision of the "Television Without Frontiers” directive (and the directive on copyright for satellite/cable) offers the opportunity to deal with those questions.

For this reason, a derogation for audiovisual services from the scope of the Services directive should apply. It should cover both audiovisual broadcasting services – as defined in Article 1a) of the Television Without Frontiers directive – (sound) radio services and cinema services.

A safeguard clause should also appear in order to explicitly establish the respect of each member state’s competence in the field of culture and the media.

"Application of this Directive shall not prevent the application of measures taken at Community level or national level, in compliance with Community law, to promote cultural and linguistic diversity and uphold pluralism ".


Commission and Council report to the European Paliament on the «State of Internal Market»

Directive Proposal

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