Press Backgrounder
E.U. Directive on Legal Protection for Electronic Pay Services

• The Historical Legal Background
• The E.U. Directive 98/84
• Shortcomings of the Present Directive
• National Protection of Services based on, or consisting of, Conditional Access in the E.U.

AEPOC is engaged in supporting the implementation and the enhancement of the Directive 98/84/EC on the legal protection of services based on, or consisting of, conditional access¹ (hereinafter "CAD") which has played an important role in the framework of the EU initiatives directed towards the improvement of the telecommunication market as regard to technological measures. The directive provides these kind of services with a common standard of legal protection (non-existent till then) intervening in a field lacking in coherent regulation at the European level.

The CAD aims:

• to provide adequate protection against the placing on the market, for economic gain, both direct and indirect, of an illicit device which allows or facilitates the circumvention of any technological measure directed to protect the remuneration of any service provided in a lawful way [Recital 13];
   
• to approximate provisions in the Member States concerning measures against illicit devices which gives unauthorised access to protected services [Art.1].

The directive complies inter alia with the WIPO (World Intellectual Property Organization) Treaties of 1996 as to the "Obligations concerning Technological Measures" (Art. 11, WIPO Copyright Treaty² and Art. 18, WIPO Performances and Phonograms Treaty³).

¹ OJE L 320, 28.11.1998, 54 ff.
² "Contracting Parties shall provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts, in respect of their works, which are not authorised by the authors concerned or permitted by law".
³ "Contracting Parties shall provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by performers or producers of phonograms in connection with the exercise of their rights under this Treaty and that restrict acts, in respect of their performances or phonograms, which are not authorized by the authors concerned or permitted by law".

The Historical Legal Background

1991 - Recommendation No. R(91)14 on the legal protection of encrypted television services from 1991
At the European level, the problem of safeguarding conditional access works and systems was raised for the first time by the Council of Europe in 1991. It issued a Recommendation of the Committee of Ministers to Member States (No. R(91)14) on the Protection of Encrypted TV Services, that was later complemented by Recommendation No. R(95)1 on Measures against Sound and Audiovisual Piracy. Since then, much progress has been made in terms of awareness of the seriousness of these forms of piracy and of the damages they cause.

1998 - Green Paper of the European Commission on Combating Piracy in the Single Market
With the release in October 1998 of its Green Paper on Combating Piracy in the Single Market, the European Commission took an important step toward far-ranging Community initiatives against piracy and counterfeiting in the EU. The main aims of the Green Paper, which launched a general consultation on this subject matter, to assess the impact of piracy, to review legislation and examine the need for action. More than 50 representatives of interested sectors hit by piracy coming from all the Member States took part in the hearing in March 1999 held in Munich to discuss issues such as the use of technical devices for security and authentication, sanctions as well as administrative co-operation between authorities. At the meeting AEPOC provided an up-to-date and complete picture concerning conditional access piracy.

2000 - Action Plan
On November 2000 the European Commission issued an Action Plan which followed up on the Commission's Green Paper on combating counterfeiting and piracy in the single market. The Commission adopted a twofold approach, providing both the adoption of urgent measures and of mid/long-term actions.

The E.U. Directive 98/84

Definitions

Protected service
Any of the following services, when provided in return for remuneration and on the basis of conditional access: television broadcasting, as defined in Article 1(a) of Directive 89/552/EEC; radio broadcasting, meaning any transmission by wire or over the air, including by satellite, of radio programmes intended for reception by the public; information society services within the meaning of Article 1(2) of Directive 98/34/EC of the European Parliament and of the Council of June 22, 1998 laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on information society services or the provision of conditional access to the above services considered as a service in its own right [Art.2, lett.a].

Conditional access
Any technical measure and/or arrangement whereby access to the protected service in an intelligible form is made conditional upon prior individual authorisation [Art.2, lett.b].

Conditional access device
Any equipment or software designed or adapted to give access to a protected service in an intelligible form [Art.2, lett.c].

Illicit device
Any equipment or software designed or adapted to give access to a protected service in an intelligible form without the authorisation of the service provider [art.2 lett.e]

Infringing activities

Article 4 requires that Member States of the E.U. shall adopt any necessary measure in order to prohibit in their territory all the "preliminary commercial" activities favouring or allowing circumvention of the conditional access services.

The infringing activities as mentioned in Article 4 are:

1. the manufacture, import, distribution, sale, rental or possession for commercial purposes of illicit devices;
2. the installation, maintenance or replacement for commercial purposes of an illicit device;
3. the use of commercial communication to promote illicit devices.

Recital 21 states that the CAD is without prejudice to the application of any national provisions which may prohibit the private possession of illicit devices.

Sanctions and remedies

Art. 5 provides that the sanctions shall be effective, dissuasive and proportionate to the potential impact of the infringing activity and that Member States shall take the necessary measures to ensure that providers of protected services whose interests are affected by an infringing activity carried out on their territory have access to appropriate remedies, including bringing an action for damages and obtaining an injunction or other preventive measures, and where appropriate, applying for disposal outside commercial channels of illicit devices.

Besides, the CAD states in Recital 23, that the sanctions and remedies provided for under this Directive are without prejudice to any other sanction and remedy under national law [...] such as the seizure of illicit devices.

Deadline for the implementation

May 28, 2000

Shortcomings of the Present Directive

In view of the technical and market-related developments since the adoption of the directive, a number of enhancements are necessary. AEPOC works inside the European Union for the following key points:

• Legal protection specifically governing the use of conditional-access devices for reasons that are not just for the protection of direct remuneration

The definition of "conditional access services" or of "protected services" as provided for in the CAD is too narrow. AEPOC stresses that by virtue of this article, such a service seems to be protected only if it serves a remuneration purpose, without taking into account that nowadays, de facto, other reasons lead to the use of such services as well (for instance to restrict broadcast to certain national area or language zone or to a specific audience, narrow-casting, to obtain a higher revenue due to better targeting, copyright protection, protection of minors, privacy and data protection or marketing strategies). Legitimacy of such exclusion has been a vexed question as it collides with the new technologic development. AEPOC has remarked many times that, all in all, free services do not differ from services provided for remuneration purposes in regards to the technical aspects. AEPOC also highlighted that, on the basis of an extensive interpretation, it is possible to include into the wording "remuneration" even the indirect ways of remuneration, such as advertising, copyright fees, broadcasting fees, commissions, brokerages and others. In these cases, the final purpose is indeed to achieve an economic gain. AEPOC's position in this regard is that conditional access services, both provided in return for remuneration or free of charge, are worthy of protection as they generate consistent economic value, which has significant impact on several fields, from the general economic growth to the employment market, from the consumers' choices to the entire media Internal Market, the competition within this market and the non-European markets, to the audiovisual sector.

• The punishment of the personal use and possession of illegal decoding devices

Article 4 of the CAD regulates that Member States shall prohibit in their territory the manufacture, import, distribution, sale, rental or possession of illicit devices for commercial purposes. As to the private possession, it refers to the national provisions of each Member State (see recital 21 above) which is left completely free on that point. Therefore, Member States have a mere option and not a duty to lay down provisions prohibiting the personal possession of such devices. Obviously such freedom has created disparities of treatment within Member States as well as obstacles to the free movement of services and goods within the Internal Market.

• Insufficient definition of "illicit device"

The narrow definition of "illicit device", as provided for in Art. 2 lett.e), leaves out the equipment or software itself where not "designed or adapted" to give access without authorisation. This definition does not seem to be sufficiently clear. The need not to hamper the market of set-top-boxes within the European Community requires a more specific definition.

Moreover, in relation to on-line services based on a conditional access system, the use of software is not usually required, the user simply being required to type in a password. The question is whether the concept of "illicit device" includes the use of a password where not allowed. A password, indeed, is neither equipment nor software, but mere information needed by the equipment or software to allow access. Therefore, a clarification of this concept would satisfy even the need for a possible exclusion of such services from the application area of the Directive itself.

National Protection of Services based on, or consisting of, Conditional Access in the E.U.
as of September, 1^st 2004

• Austria: Zugangskontrollgesetz - ZuKG of 11 July 2000 (Federal Law on the protection of services based on conditional access — Conditional Access Law)
• Belgium: Decree amending the Flemish Media Decree 1995 (article 64); Flemish community; Décret sur la radio diffusion 2003 - French Community; "Programmdekret 2000" amending the Mediendekret 1999; Law amending the Brussels-Capital Medialaw 1995; Law on the legal protection of information society conditional access services
• Cyprus: Law of 2002 ratifying the Council of Europe Convention 178 - Law ratifying the European Convention for the Legal Protection of Services based on, or consisting of, Conditional Access of 11 July 2002
• Czech Republic: N/A
• Denmark: Radio and Television Broadcasting Act - Consolidating Act No. 138 of 19 February 1998
• Estonia: N/A
• Finland: Section 25 of the Finish Telecommunications Market Act 396/1997
• France: Article 268 Loi No. 92-1336 du 16 décembre 1992 relative à l'entrée en vigueur du nouveau code pénal et à la modification de certaines disposition de droit pénal et de cette entrée en vigueur (Journal Official No. 298 du 23 décembre 1992); Loi n° 88-19 du 5 janvier 1988 relative à la fraude informatique (dite "loi Godfrain"); Article 79-1 Loi n 86-1067 du 30 septembre 1986 relative à la liberté de communication modifiée et complétée
• Germany: Gesetz über den Schutz von zugangskontrollierten Diensten und von Zugangskontrolldiensten "Zugangskontrolldienstesschutz-Gesetz" - ZKDSG of 19 March 2002 (Conditional Access Services Protection Act)
• Greece: Presidential Decree No 343 of 22 November 2002 (Harmonization of the Greek legislation with the provisions of the 98/84/EC Directive of the European Parliament and the Council of 20 November 1998 for the legal protection of the services based on, or consisting of, the conditional access provision (pay services))
• Hungary: Section 300/E of the Hungarian Criminal Code of 1 April 2002, as amended by Act CXXI of 2001 in December 2001 with regard to the Cyber Crime Convention and Directive 98/84/EC
• Ireland: European Communities Conditional Access Regulations, 2000, Statutory Instruments S. I. No. 357/2000
• Italy: Gazzetta Ufficiale della Repubblica Italiana 4 September 2000, n. 206; D. Lgs. 15 November 2000, n. 373 (Legislative Decree No 373 of 15 November 2000, implementation of Directive 98/84/EC on the legal protection of the services based on, or consisting of, conditional access), Attuazione della Direttiva 98/84/CE sulla tutela dei servizi ad accesso condizionato, Gazzetta Ufficiale della Repubblica Italiana 15 December 2000, S. G. 292, p. 5; Art. 171 octies Legge 18 August 2000 n. 248, Gazzetta Ufficiale della Repubblica Italiana 23 August 2000; Legge 7 February 2003, n. 22 - Modifica al decreto legislativo 15 November 2000, n. 373, in tema di tutela del diritto d´autore, Gazzetta Ufficiale della Repubblica Italiana 15 February 2003, n. 38
• Latvia: N/A
• Lithuania: Telecom Law Article 27 (Conditional Access Services and Related Facilities); Administrative Offences Code; Government Resolution; Civil Code - Articles 6.249 and 6.255; Civil Procedure Code - Articles 135, 145, 270
• Luxembourg: Loi du 2 août 2002 sur la protection juridique des services à accès conditionnel et des services d'accès conditionnel
• Malta: N/A
• The Netherlands: Implementatie richtlijn 98/84/EG, Staatscourant 6 juli 2000, n. 128 / pag. 11
• Poland: Ustawa z dnia 5 lipca 2002 r. o ochronie niektórych uslug swiadczonych droga elektroniczna opartych lub polegajacych na dostepie warunkowym - Dz. U. 02.126.1068 (Act of 5 July 2002 on the protection of some services provided by electronic means based on, or consisting of, conditional access - Official Gazette Nr. 126, Item 1068)
• Portugal: Decreto-Lei No 287/2001 of 8 November 2001 (Decree-Law No 287/2001 of 8 November 2001)
• Slovakia: Art. 25 of Electronic Communications Act 610/2003 of December 31, 2003 (Partial implementation of directive 98/84/EC)
• Slovenia: N/A
• Spain: Antiproyecto de Ley Orgánica por la que se modifica la Ley Orgùanica 10/1995 de 23 de noviembre, de codigo penal, Article 92 (Draft Article 286 Penal Code as amended by Article 92 of draft Law amending the Penal Code)
• Sweden: LAG (1993:1367) om förbud beträffende viss avkodningsutrustning (SFS Nr. 1993:1367)
• United Kingdom: Sections 297A and 298 Copyright and Patents Act as amended by the European Communities Conditional Access Regulations, 2000, Statutory Instruments No.1175/2000 The Conditional Access (Unauthorised Decoders) Regulations 2000

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