DATES FOR YOUR DIARY

KEY ISSUES OF THE MONTH
Equal Opportunities
Nutritional Claims
Copyright Declaration
Unfair Commercial Practices

WHAT’S NEW
Electronic Commerce
1.1 Transfer of personal data to third countries
1.2 PSI

Content Regulation
2.1 Disability and the media
2.2 CoE declaration freedom of communication
2.3 CoE Violence and the media

Copyright
3.1 Computer piracy reduced

Advertising
4.1 Tobacco advertising update
4.2 CoE recommendation on digital broadcasting
4.3 OECD guidelines on cross border fraud

Audiovisual & General Media Policy 
5.1 TVWF hearings
5.2 TVWF report in parliament
5.3 Services of general interest

General
6.1 VAT
6.2 Convention


DATES FOR YOUR DIARY

11th July - Parliament closes for Summer recess
27-30th July - Seventh World Multi-Conference on Systemics, Cybernetics and Informatics. Orlando, Florida, USA.
25th August - Parliament returns after recess
15th September - EPC Members dinner, Brussels (pre-conference)
16th September - EPC Journalists/Editors seminar, Brussels
17th September - The Amsterdam Group conference - self regulation in advertising, Brussels
17th September - International congress on trustmarks in ecommerce, Luxembourg
27-29th October - WFA World Advertiser conference, Brussels

KEY ISSUES OF THE MONTH

Equal Opportunities

The Financial Times reported at the end of June on a new proposal being developed by DG Employment at the Commission which addresses areas of discrimination outside the workplace. Without any prior consultation with any media or advertising representatives in Brussels (something it is obliged to do under the new ‘Better Regulation’ rules) the Commission has included the media and advertising in the scope of this draft Directive.

The text states that Member States ‘shall take the necessary measures to ensure that, without prejudice to the principle of freedom of expression, media do not contain any discrimination based on sex, nor any incitement to hatred on grounds of sex, and advertising respects human dignity.’

In the explanatory note the Commission gives the justification that similar provisions exist already in the context of television broadcasting activities. It cites the "Television Without Frontiers" Directive which provides that broadcasts must not contain any incitement to hatred on grounds of sex and that Television advertising should not prejudice respect for human dignity, nor include any discrimination on grounds of sex.

It also cites the Directive on electronic commerce which provides that Member States may not restrict the freedom to provide information society services from another Member State except for public policy reasons, in particular, the fight against any incitement to hatred on grounds of race, sex, religion or nationality, and violations of human dignity concerning individual persons.

It then claims that this proposal aims at completing EU legislative action in this area to cover also the other audiovisual media, such as radio broadcasting activities and cinema, as well as the printed press.

Apparently the purpose of this provision is to ‘avoid all stereotypical portrayals of women and men as well as any projection of unacceptable images of men and women affecting human dignity and decency in advertisements’.

In view of its proposed aims, the EPC asks why it is that the Commission felt it unnecessary to consult any of the organisations directly involved and questions the legality of the Commission move to address content issues which are not part of its competence. In internal consultations DG Education and Culture has already made it clear to DG Employment that this proposal is unacceptable.

EPC Chairman has written to the Commissioner requesting formal consultation if they insist on moving forward and at the same time putting on record our opposition to content regulation.

This measure will be a threat to the freedom of the press in Europe and to the internal market. EPC will work to ensure that the impact on the media is minimised and preferably removed from the scope of this Directive.

Nutritional Claims

EPC has received the latest copy of a proposal for a Regulation from DG SANCO on nutrition and health claims made on foods. The draft is currently with the other DGs of the Commission until next Monday for comments, and is on the agenda of the College of Commissioners meeting of 16th July 2003 for adoption after which the Parliament and Council will begin to examine the text.

The draft Regulation is highly prescriptive. Everything that is not expressly authorised by the Regulation will be banned. This reverses the current position where everything that is not expressly prohibited is permitted with the proviso that the consumer is not misled. The Commission believes that as this leads to diverging interpretations by national authorities, claims must be harmonised to a high level.

In the draft Regulation claims must not:

• be false or misleading;
• give rise to doubt about the safety and/or the nutritional adequacy of other foods;
• state or imply that a balanced and varied diet cannot provide appropriate quantities of nutrients in general;
• refer to changes in bodily functions in improper or alarming terms either textually or through pictorial, graphic or symbolic representations.

A health claim will only be permitted if particular requirements are fulfilled. These include scientific evidence to support the claim and sufficient levels of the substance about which the claim of benefit is made.

The use of nutrition and health claims will only be allowed if the average consumer can be expected to understand the beneficial effects from the content of the claim.

The following implied health claims will be banned:

• claims which make reference to general, non-specific benefits of the nutrient or food for overall good health, well-being and normal functions of the body;
• claims which make reference to psychological and behavioural functions;
• claims which make reference to slimming or weight control, or to the rate or amount of weight loss which may result from their use or to a reduction in the sense of hunger or an increase in the sense of satiety or to the reduction of the available energy from the diet;
• claims which make reference to the advice of doctors or other health professionals, or their professional associations, or charities, or suggest that health could be affected by not consuming the food.

Clearly this is of most interest to food manufacturers and advertisers but such stringent legislation will reduce the scope for advertising overall and ultimately adversely affect advertising revenues. For this reason EPC has been following the development of the Regulation closely and will continue to work in alliance with the advertisers and agencies.

Copyright Declaration

The Parliament has recently passed a Declaration calling on the Commission to strengthen the Community rules on copyright and patent infringement. This has been done in the light of the release of the copyright enforcement draft Directive which is viewed by many in the industry as not having sufficient strength to deal with copyright infringement. The Declaration, which was adopted by the addition of the signatures of more than half the European Parliament contains a call for action by the Council and Commission. It is non-binding but can be used as political leverage to encourage the Institutions to act.

The Declaration states that copyright infringement has reached alarming levels in recent years in the EU and ‘epidemic proportion’ in the candidate countries. It reminds the Council and Commission that many jobs are lost and organised crime is supported by piracy. It then calls on the Council and Commission to provide ‘strong, harmonised, civil sanctions’ in any forthcoming legislation and promote cross-border cooperation between enforcement authorities. Finally it asks that the EU do more to raise consumer awareness of the harm caused by piracy and counterfeiting and that these are not ‘victimless crimes’.

The Declaration will now be forwarded to the Council and Commission for further consideration.

Unfair Commercial Practices

The Commission released the new draft Unfair Commercial Practices Directive this month. The Directive is the result of consultations which began with the Green Paper on the Duty to Trade Fairly.

The Commission states that this new law will fill in the gaps left by misleading advertising and other Directives in the area of consumer law.

The initial text is quite an improvement on what was proposed in the follow-up to the Green Paper, although there are still some areas which could be problematic for publishers.

Positively, there is a strong commitment to the Country of Origin principle, which means that traders can be confident that if they are compliant with the laws of their home State in this area, they will be considered to be in compliance with the laws of any other Member States their advertising reaches.

The requirement for a consumer committee has been removed, as has the Commission proposal to endorse codes of conduct. This had been causing advertisers some concern as the Commission would only endorse Europe-wide codes and these do not exist.

On the more negative side, the clause which addressed groups other than the average consumer as defined by the ECJ has been watered down but still contains wording which would mean consumer groups could claim that the campaign had been aimed at children and should be judged on that basis.

There are other minor linguistic threats in the shape of definitions contained in the text but for EPC members, the main threat is contained in the annex to the proposal which gives a non-exhaustive list of unacceptable practices. This list includes ‘advertorials’ and claims that any editorial which contains copy on a good or service which has been provided by the manufacturer should be identified as an advert. When questioned further, SANCO clarified its position by stating that any content which is affected by the fact that the good is paid for should be identified as advertising.

The Council working group dealing with the text will meet for the first time on the 1st July and is expected to meet twice more before the Summer recess. The Italian Presidency has made this text a key issue for the next six months. EPC will work to ensure that the country of origin clause remains and the text on advertorials is removed or modified to give a clearer definition.
 

WHAT’S NEW

Electronic Commerce

1.1 Transfer of personal data to third countries

The Commission has released a discussion paper on the international transfer of data within multi-national companies this month. This paper addresses the situation at the moment which involves huge restrictions on data which can move freely to third countries from Europe without first undergoing a complicated approval procedure.

In its discussion paper the Working Group on Data Protection suggests that binding corporate rules could be used to allow transfers of data between one part of a corporate group and another. The definition of corporate group would vary according to individual structures but it is thought that multi-national corporations will be most likely to use this option for data transfer. The specific rules are not contained in the paper but it is suggested that as well as general data protection rules there will be audit and complaints procedure requirements, remedies for data subjects and a guarantee of compliance.

A full copy of the text may be found at: www.europa.eu.int/comm/internal_market/privacy/docs/wpdocs/2003/wp74_en.pdf.

1.2 PSI

The Public Sector Information draft Directive goes forward to second reading in Plenary in July. The Rapporteur has reintroduced so of the elements which were removed from his text at first reading in Plenary. The following have been reintroduced:

• the term information rather than documents should be used;
• asset lists of what documents are held should be publicly available;

The demand for some information to be available for free is not repeated but the Rapporteur has added some new requirements:

• those who have to pay for information should have the right to ask for a review of prices;
• prices must not exceed the cost of distribution;
• public authorities must give a clear indication of what prices are.

EPC and other publisher organisations have been in regular contact with the Rapporteur and have sent him a letter giving their support for his position.

Content Regulation

2.1 Disability and the media

EPC recently attended a Presidency conference on ‘Disability and the Media’. This conference was to discuss to key issues: the portrayal of the disabled in the media and how to encourage more disabled people to work in the industry.

Speakers represented audiovisual media, disability organisations, institutions, lawmakers and academia. Many of the speakers had a disability and spoke from personal experience.

When discussing the portrayal of the disabled, speakers reported that the disabled were reported on either in a ‘triumph over adversity’ way, in terms of medical advances or as activists fighting for equal rights. Hollywood films were attacked for their portrayal of the disabled in a stereotypical way. Examples of positive portrayal were shown in advertising and children’s programming.

It was generally agreed by all speakers that one way of improving the portrayal of the disabled in the media would be to employ more disabled people. According to figures, at the moment the number of disabled people in the media is very low. A number of disabled speakers employed in the media industry spoke of their experiences and the strengths they brought to their work.

The conference produced an official Declaration which the Commission will follow with a Communication in the first half of 2004. The main thrust of the Declaration is the Member States’ intent to employ more disabled people in the media and raise the profile of disabled people. For a copy of the text of the Declaration please contact EPC.

2.2 CoE declaration freedom of communication

The Council of Europe produced a Declaration at the end of May on freedom of communication on the internet. The Declaration contains seven principles:

• Principle 1 calls for States not to subject internet content to restrictions which go further than those applied to other means of content delivery;
• Principle 2 encourages self-regulation or co-regulation regarding content disseminated on the Internet;
• Principle 3: calls on public authorities to not deny access to information and other communication on the Internet. At the same time it stresses that this does not prevent the installation of filters for the protection of minors, in particular in places accessible to them, such as schools or libraries;
• Principle 4 calls for the removal of barriers to the participation of individuals in the information society and asks States to encourage access to all at a reasonable price;
• Principle 5 calls for the freedom to provide services via the Internet without the need for specific authorisation;
• Principle 6 calls for the limited liability of service providers for Internet content if their function is limited to transmitting that information. However if the service provider is aware of illegal content it can be held liable;
• Principle 7 deals with anonymity and asks that in order to ensure protection against online surveillance and to enhance the free expression of information and ideas, States should respect the will of users of the Internet not to disclose their identity unless there is a threat to national security.

2.3 CoE Violence and the media

The Council of Europe also held a conference this month on violence and its portrayal in the media. The conference discussed the impact of violence in the media, how media professionals could be trained to be aware of the link and how to avoid negative consequences.

The meeting also looked at the issue of parental control over content seen by minors and conclusions for a way forward were drawn. The text of the conclusions will be available soon on the Council of Europe website at: www.coe.int.

Copyright

3.1 Computer piracy reduced

According to the Business Software Alliance (which includes large companies such as Apple and Microsoft) internet piracy has fallen by one per cent in the last year. In its call for the adoption of the copyright enforcement Directive before the accession of the new member states, the BSA quotes losses of in the region of $13billion in 2002 and call on Member States to strengthen their anti-piracy rules.

Advertising

4.1 Tobacco advertising update

The EU is one of the first countries to have signed the WHO Convention on tobacco control. This is after some quite tricky negotiations at EU level because the German government wanted a clause which would have enabled changes in the Convention at a later date. This was in common with the US which also had objections to certain aspects of the Convention. However when the US withdrew those objections the Germans followed suit.

The Directive banning cross border sponsorship of events or advertising of tobacco products was published in the Official Journal this month. The German government is now free to launch its challenge to the Directive’s legality. EPC will keep members up-to-date with developments.

The TT circuit of Assen in the Netherlands can continue to display tobacco advertising during the next three World Championship events.

The chairman of the TT circuit has obtained an agreement with the Dutch Secretary of State for Health and Sports. This means that the TT will continue with the advertising of Gauloises until 2005.

From the 31st June 2005, the circuit will have to find other advertisers.

4.2 CoE recommendation on digital broadcasting

The Council of Europe has released a Recommendation on digital publishing this month. The Recommendation calls on States to:

• ensure the right economic and legal conditions are in place to develop a pluralistic digital broadcasting environment;
• protect minors and ensure that content contains no incitement to hate or threat to human dignity;
• give the public all the information it needs to be prepared for the arrival of digital television;
• guarantee that PSB will continue in the digital format;
• reaffirm the remit of PSBs and make all in the industry aware of the basic principles agreed on as part of the Recommendation.

The basic principles are included in an appendix to the Recommendation and include a strategy to ensure that technology is interoperable, that there is a rapid changeover which does not create a digital divide and that the protection of minors is maintained.

4.3 OECD guidelines on cross border fraud

The OECD this month released guidelines on how to tackle cross-border consumer fraud. This initiative is due to the increase in cross border fraud against consumers using fake lotteries, prize draws and credit cons.

The guidelines set out broad principles for international cooperation. These guidelines include:

• establishing an early warning system to notify other countries of scams that may effect them;
• a national contact point to ensure clear channels of communication and co-operation;
• a further look at the benefit of enabling enforcement authorities to gain monetary redress on behalf of consumers.

It is hoped by OECD member states that increased cooperation between states will ensure that internet and telemarketing scams coming from outside the borders of member states will be stopped using this method.

Audiovisual & General Media Policy

5.1 TVWF hearings

The European Commission held its second round of hearings this month on the subject of Television Without Frontiers. Discussions were held on the issues of broadcasting of European works, the protection of minors and how the Directive has been applied thus far.

On the subject of European works opinion was fairly evenly split between content producers who wanted revision and tightening up of the Article relating to European works and the broadcasters who did not want restrictions to be any tighter in this area. Most were happy for the definition of a European work to stay the same. In the area of works by independent producers, the split between content producers and broadcasters was evident again with broadcasters wanting either to retain the status quo or reduce quotas.

There was discussion of ratings/control systems designed to protect minors. Some delegates called for a clarification of the rules relating to this area. In the opinion of the Member States represented it should remain the competence of the Member State to decide what is appropriate in their own countries in relation to the protection of minors and human dsignity.

On the overall implementation of the Directive, the main issue for delegates was the importance of the country of origin aspect of the Directive. Mutual recognition of content produced in other Member States was considered to be very important.

The Commission hopes to complete its review of the TVWF Directive by the end of the year.

5.2 TVWF report in parliament

Roy Perry presented his own-initiative report on TV Without Frontiers to the Culture Committee of the Parliament this month. The report raises once again the question of media pluralism, which the Parliament passed a Resolution on late last year. The report also calls for co-regulation in areas such as advertising. It comes to Plenary in the Autumn. EPC will be lobbying to ensure the Commission stands by its statement of last November that media pluralism is the competence of the Member States.

5.3 Services of general interest

UNICE, the organisation representing business at EU level has made it very clear that it believes there should be no further regulation of businesses in the area of Services of General Interest, this includes the media and broadcasting. UNICE President Helmut Königshaus argued at a conference on the subject of the Green Paper that competition laws already in existence and internal market rules already give adequate protection in this area.

The Green Paper re-opens the debate on media pluralism, whilst making it very clear that the Commission has no intention of reviewing the Amsterdam Protocol which allow PSBs to operate outside the conventions of normal competition law. EPC has joined a coalition along with UNICE and others which will ensure that business’ voice is heard in this debate.

General

6.1 VAT

With the report on Annex H (reduced rates) of the VAT Directive about to be released, EPC and other publisher organisations have sent a letter to Commissioner Bolkestein asking him to remember that a tax on books, newspapers and magazines would be a tax on reading.

It is believed that the content of the report will recommend few if any changes to the present VAT rules. EPC will inform members of the publication of the report as soon as possible.

6.2 Convention

The European Council met in Thessaloniki in June to discuss the details of the proposal for a new European Constitution.

The European Council decided that the text of the Draft Constitutional Treaty was a good basis for the Intergovernmental Conference which will take place in October 2003. It is hoped that the Conference will agree the Constitutional Treaty in time for it to become familiar to European citizens before the June 2004 elections to the European Parliament. New Member States will participate fully in the Intergovernmental Conference on an equal footing with the current Member States. The Constitutional Treaty will be signed by the Member States of the enlarged Union as soon as possible after 1 May 2004.