Media Sighs Relief At Services Directive Exclusion

Michael Hedges - February 20, 2006

The latest draft passed the European Parliament after amendments ripped out the hotly contested “country of origin” principle. The audiovisual sector was excluded – along with gambling and public healthcare. Europe’s media organizations breathed a palpable sigh of relief.
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"We are dealing with the most important piece of EU legislation apart from the Constitution. Services in Europe must be as free and open as goods and capital," announced Rapporteur Evelyne Gebhardt prior to the vote. And vote they did: 391 in favor, 213 against and 34 abstaining. 

Nothing changes in the short term as individual Member State delegations are now afforded the opportunity to add and chop. If little is diced and sliced a new Services Directive might pass into EU law in a year or so. If not – far more likely given the tone of recent debate – another draft will be submitted to EuroParl, and the process continues.

Former EU Internal Markets Commissioner Fritz Bolkestein’s original intent was to encourage commerce, competition and employment by casting off national rules. Moving that idea into services sectors has proved contentious. The newly-scrapped “country of origin” principle would have allowed enterprises from any EC Member State to set up shop – at least temporarily – under rules governing their origin.

EU President Jose Barroso’s Lisbon Agenda for creating a knowledge-based society called for “better regulation” based on clearly defined need. DG Info Commissioner Viviane Reding’s mandate, set out by Barroso, is to “help the media to become more competitive” through the “full use of the opportunities offered by the single market.”

Representatives of the main European audiovisual employers – and employers in general – took a rather subdued position after last weeks vote. The European Broadcasting Union (EBU) referred to the decision as “important” in confirming the “specificity of the audiovisual sector, in the broad sense of the term.”

Unions applauded the entire proposal as collective agreements and provisions in national labor laws remain beyond the scope of EU rules. “A new draft will have to respect the overwhelming majority obtained in Parliament,” said UNI-Europa spokesperson Bernadette Ségol in a congratulatory press statement. “UNI-Europa will continue its battle to secure a European services market with fair and clear rules.” Uni-Europa broadly represents trade unions in the audiovisual sector.

One dominant argument for excluding audiovisual services from the Services (Bolkestein) Directive has been the continuously debated revision of the Television Without Frontiers Directive (TVWF), in its latest draft referred to as Audiovisual Services Without Frontiers. After all, say some, the audiovisual sector is “special” and needs its own set of rules. Mais oui! Mrs Reding’s office at DG Info released its new TVWF draft last autumn focusing on content, including on-line media, excluding radio. Including audiovisual services in the Services Directive might have affected broadcast licensing. Rien à faire!

Also excluded were the services of rights collecting societies. In earlier debate broadcasters, mainly in the private sector, gleefully cheered the idea of price shopping among the various national content rights collectors. 

Advertising, media’s blood and honey, is included in the proposed Services Directive in so far as cross-border ad sales companies are given a level playing field to establish business. But marketing services – sales promotions such as discounts and guarantees – must conform to national rules. Excluding gambling from the Services Directive, however, is meant to deny cross-border advertising in States where gambling ads are illegal or restricted.  

Management consulting is also included in the new draft. So, while Polish broadcasting companies cannot easily ask for licenses to operate in France, Polish programming consultants can.

text of amendment 16:

(10a)Audiovisual services, whatever their mode of transmission, in particular television broadcasting services as defined in Council Directive 89/552/EEC of 3 October 1989 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities, radio services, cinema services and services of intellectual property rights collective management societies, should also be excluded from the scope of this Directive.

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Lagardère's EuroZet Takes Stock in 44 Local Polish Radio Stations - February 20, 2006

EuroZet, majority owned by French media giant Lagardère, seeks to tie up local stations already affiliated with its sales and program network. EuroZet President Monica Bednarek told the Warsaw Business Journal (WBJ) the investment might be worth as much as 40 m zlotys. "We want to protect them against other entities dividing this package and thus we offered the radio stations our capital involvement," she said.

The WBJ article notes that EuroZet will provide news programs previously provided by the BBC, which recently pulled out of Eastern Europe.

Lagardère's operations in Eastern Europe follow national regulation and not French regulation which would be far more restrictive.