Regulatory Outlook | Digital Media and Entertainment | July 2018

Current issues

Portability of digital content services

The EU Portability Regulation requires providers of paid for (and in some cases, free) online content services, including online TV, videogames and music services, to allow subscribers to access their service whilst temporarily in another EU Member State.

The Regulation came into force on 1 April 2018.

However, the Regulation relies on the principle of "reciprocity", so upon Brexit the UK will fall outside its scope, meaning that EU subscribers may not be able to watch their services in the UK and UK subscribers will not be able to view their services in the EU.

Proposed reform to Audiovisual Media Services Directive

The proposed changes (amongst other things) extend the scope of broadcast law to online video services.

On 13 June 2018, EU ambassadors confirmed that an agreement had been reached on the final text. The Directive will be put to a full vote by the European Parliament.

The new Directive will come into force 20 days after publication into the Official Journal of the EU and Member States will then have 21 months to transpose it into national legislation. This means it could potentially come into force in March 2020 (before the end of the proposed Brexit transition period).

Digital Content Directive

The Digital Content Directive will imply specific rights and remedies into consumer contracts for digital content for the first time, even where there is no payment for the content.

The Directive is still being discussed in negotiations between the European Commission, Parliament and Council. Whether the Directive comes into force in the UK will depend on when negotiations conclude and the length of any implementation period.

Platform to Business Regulations

On the 26 April 2018, the Commission published a draft regulation intended to set new standards on transparency and fairness for businesses that contract with online intermediaries.

The P2B Regulations mark the first piece of horizontal “platform specific” legislation by the European Commission.

The P2B Regulations are aimed at creating a fair and predictable environment for businesses that use big online platforms, although in practice the Regulations go beyond this and impose some potentially very onerous obligations on platforms.

In Focus: Brexit

Is any new EU legislation expected to come into force and effect before the end of the transition period?

The new Audiovisual Media Services Directive will come into force 20 days after publication into the Official Journal of the EU and Member States will then have 21 months to transpose it into national legislation. This means it could potentially come into force in March 2020.

As a result the AVMSD may become law in the UK during the transition period, and therefore be retained afterwards.

The Platform to Business Regulations have been published in draft by the European Commission and now need to be agreed with the European Parliament and Council. Given that the current draft has an implementation period of just six months, these Regulations are likely to be in force and effect by the end of the transition period.

Is a new regulator needed, or do additional powers to be given to an existing regulator?

No.

Is there an existing "equivalence" or "recognition" regime for recognising Third Country regulatory regimes?

The AVMSD relies on the "country of origin principle", meaning that broadcasters only need to be licensed in one territory, and comply with that territory's set of rules, in order to broadcast across the entire EU.

However, on Brexit the country of origin principle will cease to apply to the UK, which is problematic because a large number of international broadcasters have chosen to base themselves in the UK and broadcast across the EU. There is no such EU regime for recognising licenses granted by third countries.

Therefore unless agreement is reached with the EU, these international broadcasters will need to relocate their broadcasting operations elsewhere in the EU and obtain a licence there. They may also need to retain their licence in the UK if they are broadcasting to UK audiences.

Does current UK government policy mean that (subject to the terms of a future trade agreement between the UK and the EU) material changes to regulation or enforcement are likely post-Brexit?

The UK will have scope to make changes to broadcast regulations post-Brexit, which could potentially be more favourable to those broadcasting within the UK. However, to the extent that lighter regulation could be aimed at making the UK more attractive for overseas businesses, this will be greatly outweighed by the country of origin principle ceasing to apply to the UK.

What should businesses be doing now to prepare for Brexit?

• Understand whether you are licensed in the UK and broadcast into the EU.
• If so, identify the territories which would provide the most favourable regulatory regime for your service(s).
• Plan to relocate your broadcasting operations if needed, which could take potentially between 6-9 months. To deliver certainty to their operations, broadcasters need their relocation plans greenlit by the end of summer 2018 to provide for a move before 29 March 2019, if that is needed. The alternative is to assume that there will be a transition period and work to a relocation date at the end of 2020 but this does not deliver certainty until the transition period is agreed.