Consultation outcome

Audiovisual Media Services, Government response to public consultations on the government’s implementation proposals

Published 24 July 2019

1. Overview

This document is the government’s response to the consultation on the UK government’s proposed approach to implementing the Audiovisual Media Services Directive 2018 (AVMSD), as well as the follow-up consultation on implementing the provisions pertaining to Video Sharing Platforms (VSPs) in the AVMSD.

It covers:

• The background to the revised AVMSD
• A summary and analysis of responses received
• A summary of the next steps following this consultation

The original consultation ran for 12 weeks from 29 May to 22 August 2019 and sought views on:

• Measures intended for the protection of minors
• Advertising provisions
• Accessibility of audiovisual media services
• Changes to the European Works regime
• New requirements for video-sharing platforms
• Requirements to ensure signal integrity
• Requirements to support media literacy
• Transparency of ownership of audiovisual media service providers

The follow-up consultation ran for eight weeks from 23 July to 17 September 2019, and sought views on:

• New requirements for video-sharing platforms, as well as proposed interim measures to implement these.

We also held a number of stakeholder sessions during the consultation period, to present the government approach to implementation of the Directive and offer stakeholders an opportunity to discuss issues before responding to the government consultation. The views expressed by stakeholders in these sessions were noted and form part of the assessment of stakeholder views set out below.

The original and follow-up consultations received 35 and 20 responses respectively. A full list of respondents (excluding those who requested anonymity) can be found at Annexes C and D, and non-confidential responses have been published on the respective consultation pages. In summary, we received responses from a wide range of respondents including:

• Public service broadcasters
• Commercial broadcasters and their representatives
• Trade associations for broadcasters, news media, advertising and tech industries
• Academics and social research groups
• Non-governmental organisations
• Charities
• Tech companies

Restrictions on activity by ministers and officials during the pre-election period, including with respect to issuing statements on consultations, have meant that this response is being published later than the standard 12 week window following the closure of a government consultation

If you have any further comments about the consultation process or this response, please write to:

FAO International Broadcasting
Media Team
Department for Digital, Culture, Media and Sport
4th Floor, 100 Parliament Street
London
SW1A 2BQ

Or email: avmsd-consultation@culture.gov.uk

2. Introduction

2.1 Background to AVMSD

Since the initial adoption of the Television without Frontiers Directive (TVwF) in 1989, technological and market developments have made it necessary for the EU to review and amend the audiovisual regulatory framework. The TVwF was revised in 1997 and 2007. With the last revision, the Directive was also renamed the Audiovisual Media Services Directive (AVMSD) and all the changes made since 1989 were consolidated in 2010. The AVMSD governs EU-wide coordination of national legislation on all audiovisual media: traditional television broadcasts and, since 2007, also on-demand programme services (ODPS). The latest revision, completed in 2018, was deemed necessary to reflect the changes in the ways people consume audiovisual content since 2007. Once the revised AVMSD is implemented, the European audiovisual rules will be extended to include video-sharing platforms as well.

The revised AVMSD introduces measures to strengthen the Country of Origin Principle. Specifically, it provides more clarity on which Member State’s rules apply and aligns the derogation procedures for both TV broadcasters and on-demand service providers, as well as possibilities for derogations in the event of public security concerns and serious risks to public health.

It increases protection of minors against harmful content on TV and video-on-demand. It also increases the protection of the general public from incitement to violence or hatred and public provocation to commit terrorist offences appearing on TV or video-on-demand services.

There are increased obligations to promote European works for on-demand services, which need to have at least a 30% share of European content in their catalogue and must ensure the prominence of this content.

The Directive allows the Member States more flexibility in setting rules for television advertising minutage, although it does not require it. Instead of the current maximum of 12 minutes per hour, Member States can allow broadcasters to choose more freely when to show advertisements throughout the day. An overall limit of 20% of broadcasting time is maintained between 06:00 to 18:00, and the same share allowed during prime time (from 18:00 to midnight).

Importantly, certain audiovisual rules will also extend to video sharing platforms (VSPs): services such as YouTube, as well as audiovisual content shared on social media services, such as Facebook, are covered by the revised Directive. VSPs are also required to take appropriate measures to protect people from incitement to violence or hatred and content constituting criminal offences. The revised Directive also extends the obligation to protect minors to providers of video-sharing platforms, which now need to put in place appropriate measures. VSPs will also have an obligation to ensure that users uploading content that contains commercial communications onto their platforms declare the nature of it, so that it is transparent to viewers when audiovisual material contains commercial communications.

Finally, the independence of audiovisual regulators is reinforced in European Union law by ensuring that they are legally distinct from their government and functionally independent from the government and any other public or private body.

2.2 Approach to consultation

Overall approach

We intend to follow closely the Guiding Principles^{[footnote 1]} for transposing directives, which state that the government will: 1. ensure that (save in exceptional circumstances) the UK does not go beyond the minimum requirements of the measure which is being transposed; 2. wherever possible, seek to implement European Union policy and legal obligations through the use of alternatives to regulation; 3. endeavour to ensure that UK businesses are not put at a competitive disadvantage compared with their European counterparts; 4. always use copy-out for transposition where it is available, except where doing so would adversely affect UK interests: for example, by putting UK businesses at a competitive disadvantage compared with their European counterparts or going beyond the minimum requirements of the measure that is being transposed; 5. ensure the necessary implementing measures come into force on, rather than before, the transposition deadline specified in a Directive, unless there are compelling reasons for earlier implementation; and 6. include a statutory duty for ministerial review up to five years after the Directive comes into force, for measures with a significant impact on business (greater than +/- £5 million net annualised).

In line with this approach, the consultation asked for views on measures which may go above the minimum requirements or where there is discretion in how specific measures are implemented.

Approach to consulting on measures related to video-sharing platforms (VSPs)

One of the main changes to AVMSD is the extension of scope to cover VSPs for the first time. This extension in scope will capture audiovisual content on a number of social media platforms, video-sharing sites, as well as some pornography sites and live streaming services. These services will be required to take appropriate measures to: protect children from harmful content, protect the general public from illegal content and content that incites violence or hatred, and respect certain obligations around commercial communications.

The original consultation, published on 30 May, outlined the government’s intention to implement the majority of VSP requirements through the regulatory framework proposed in the Online Harms White Paper. However, we also indicated the possibility of an interim approach, coming into force ahead of the regulatory framework, to ensure we meet the transposition deadline of 19 September 2020.

The follow-up consultation confirmed the government would: 1. take forward the proposed interim approach; and 2. implement requirements pertaining to VSPs through appointing Ofcom as the national regulatory authority on an interim basis, until such time as the new Online Harms regulatory framework comes into force.

Relevance of UK withdrawal from the EU

The implementation of the AVMSD is required as part of the United Kingdom’s obligations. Under the terms of the Withdrawal Agreement, the UK will be required to implement the amending AVMSD, as its implementation date falls prior to the end of the transition period, which ends on 31 December 2020.

The issues related to the requirements for commercial communications are complex. and DCMS will consider many of those within the framework of the department’s work to consider how online advertising is regulated in the UK. This work will consider the extent to which the current regulatory regime is equipped to tackle the challenges posed by the rapid technological developments seen in online advertising. It will also consider the regulatory approaches for both broadcast and non-broadcast advertising (including online), to ensure that regulation keeps pace with the changing market.

After the end of the transition period, the quota for European Works on linear television will not fall away. The legislative requirements will become retained EU law, and UK productions will continue to count as European Works, as the definition includes works originating in countries that are parties to the Council of Europe’s Convention on Transfrontier Television (ECTT). However, the UK will no longer have a reporting obligation to the Commission on this matter.

After the transition period, the measures in the Directive we will become retained UK law, we would assess in due course this legislation in light of the future relationship with the EU.

3. Summary of responses

3.1 Original consultation

The original consultation received 35 responses. Respondents included broadcasters, trade associations (representing broadcasters, tech companies, news media and advertisers), academics, think tanks, regulators, charities directly affected companies.

The majority of respondents agreed with the government’s implementation approach in key areas. 86% of those responding to the relevant questions agreed with our proposed approach to aligning the protection of minors requirements between linear and on-demand. However, a number highlighted that this alignment should be implemented in an appropriate and proportionate manner and that there were inherent differences between linear and on-demand services.

The majority of respondents supported the use of the existing regulatory framework to implement advertising requirements, including for VSPs, but noted this was a complex area. Over 90% of respondents who addressed the question on advertising minutage agreed with the government’s approach not to make legislative change with regards the level of advertising minutes.

The majority of respondents to questions on accessibility (67%) agreed with the government’s proposed approach to implementing accessibility requirements, though some noted that timescales proposed by Ofcom were overly ambitious.

The majority of respondents on European Works questions (over 90%) agreed with the government’s proposed approach to ensure that Ofcom produces a report every two years on compliance with new European Works quotas for on-demand programme services (ODPS). Most respondents (over 90% of those who answered this question) also agreed with the government’s proposed approach to ensure that Ofcom has to produce guidance on prominence of European Works in the online catalogues of on-demand programme services. Furthermore, a majority of respondents agreed with the government’s approach not to introduce a levy scheme to fund European Works.

The majority of respondents to questions on advertising (91%) agreed with the proposed approach of implementing the (non-advertising) provisions pertaining to Video Sharing Platforms (VSPs) in the 2018 Directive through the regulatory framework proposed in the Online Harms White Paper. However, stakeholders noted the need to ensure consistency and clarity between the AVMSD and Online Harms White Paper. All the respondents to the original consultation agreed with the proposed approach that Ofcom should be appointed as the interim National Regulatory Authority if required.

3.2 Follow up consultation on video-sharing platforms

The follow-up consultation received 20 responses, with respondents including: broadcasting services; campaigning groups; trade associations; video sharing platforms; independent regulators; a charity; tech industry and other trade bodies.

Stakeholders broadly agreed with the Government’s approach of transposing a definition for ‘video sharing platforms’ via copy-out, which sets out the minimum requirements of the Directive into UK law. However, there were some concerns that the Directive’s definition of VSPs was unclear. The majority of the stakeholders were broadly supportive of a requirement for the regulatory authority to issue guidance on whether entities fall into scope as VSPs, though some noted the need for cooperation with the European Commission and other regulators to establish this.

The majority of stakeholders favoured designating Ofcom as the regulator, and the Advertising Standards Authority (ASA) as co-regulator for commercial communications. Concerns were focused on whether the regulators, in particular the ASA, would be given sufficient legal and financial means to regulate the sector effectively, and the need for regulators to take into account the specific characteristics of VSPs effectively.

Overall, respondents supported the suggestion that Ofcom be given a duty to provide guidance on appropriate measures on how VSPs can be compliant. They broadly advocated a proportionate approach, based on the size and nature of the VSP to avoid barriers to innovation, and would only expect fines to be issued in the most serious cases of structural non-compliance, rather than for one-off events.

The majority of stakeholders were content with a notification system, although there was concern that this requirement would be overly onerous. Stakeholders also broadly supported similar sanctions of those that apply to on-demand programme services to be applied to video-sharing platforms.^{[footnote 2]} However, some respondents questioned whether it was appropriate for the VSP sanctions regime to mirror that of on-demand platforms as the two represented fundamentally different business models, offering contrasting user experiences, and on-demand programme services resemble broadcasting more closely.

Finally, there was broad agreement that Ofcom should be able to charge VSPs a fee to finance regulation.

4. Analysis of responses

4.1 Protection of minors

Alignment

The consultation asked:

Do you agree with our proposed approach to amend s.368E of the Communications Act 2003 to align the protection of minors requirements for linear and on-demand? a. Yes b. No c. If No, please give details

Noting that recital 19 of the 2018 Directive envisages that a system of that viewers should be provided with sufficient information regarding the nature of the content, should be equally applicable to both on-demand and linear services. Do you consider that Ofcom updating the relevant sections of the Broadcasting Code would be enough to sufficiently meet this requirement?

If no, what would be your preferred way of introducing a new requirement for ensuring that viewers have sufficient information about the nature of content on on-demand programme services (ODPS) catalogues?

The majority of stakeholders who responded to this question (79%) agreed with the government’s proposed approach to align the requirements on the protection of minors for linear and on-demand by amending the relevant provision in the Communications Act 2003. However, some respondents highlighted that this alignment should be implemented in an appropriate and proportionate manner and that there were inherent differences between linear and on-demand services.

Safecast outlined an alternative option based on the use of a filter, which can be part of any video browser application and read the embedded metadata. Safecast suggested that it could be made a requirement to ensure that metadata is embedded into content to allow for filtering. It was proposed that by requiring specific information within the metadata, it would be possible for all industry bodies to recommend and promote systems where viewers are provided with sufficient information regarding the nature of the content.

There was broad agreement that the requirement for viewers to be provided with sufficient information on linear and ODPS could be met with Ofcom using powers to update the relevant sections of the Broadcasting Code. The Broadcasting Code clearly sets out the standards to which broadcasters and ODPS are required to adhere, as well as the guidance and protocols necessary to ensure compliance. Of those who answered the question, 88% agreed that Ofcom having the power to update the Broadcasting Code would be sufficient to achieve this.

The BBFC noted that the Ofcom Broadcasting Code also uses BBFC classifications for 15 and 18 in relation to the watershed and they would support alignment for other mechanisms for ODPS to achieve the same effect as the watershed.

Standardised content description

The consultation asked:

Should the measures above use standardised system of content descriptors or age-ratings used for broadcast and/or ODPS?

What would the benefits/obstacles be for introducing a standardised system to such content?

Should the government consider a self or co-regulatory model for provision of sufficient information to protect minors?

Of those who responded to this question, 78% did not think standardising a system of content descriptors would be appropriate.

Some stakeholders supported a standardised system of content descriptors. For example, the BBFC argued that government should continue to support the protections for minors through its granular age ratings, supported by additional content information for parents which can be linked to parental controls. The benefits of a standardised system were also outlined by the Centre for Competition Policy, who advocated this would allow people to encounter the same content across a variety of platforms, immediately identify characteristics and decide whether is appropriate for themselves or their children. The stakeholder also suggested it may also be easier for people with disabilities or with lesser knowledge of English to recognise standardised content descriptors and be less burdensome on industry as the classification of content can be done once and then shared.

However the Commercial Broadcasters Association (COBA), who represent several commercial broadcasters, opposed an overly prescriptive, one-size-fits-all approach in this area. COBA stated that, while one model may work for certain services, it may not be appropriate for all. This view was shared by Viacom, Tech UK and Discovery. The BBC argued that “imposing a different ‘standardised system’ does not seem appropriate. By setting principles for minimum harmonisation, the Directive rightly enables the provision of content descriptors and other tools that reflect audience needs and expectations for a particular service and type of content.” Opposition to standardisation and support for flexibility was echoed by ITV, Sky, Channel 4, S4C, AETN and Virgin Media. The Internet Association also noted that the introduction of a mandatory standardised system of content descriptors or age-ratings could create obstacles for UK licensed on-demand service providers, who would also like to offer an EU-wide service. This is because a UK standardised system could lead to user misinterpretations in other EU countries.

Use of data

The consultation asked:

Do you expect the new measure which restricts processing, collecting or otherwise generating personal data of minors for commercial purposes set out in Article 6a(2) to impact your audiovisual media service (or video sharing platform in the case of VSP providers)? a. Yes (please give details) b. No c. Don’t know

In response to this question, COBA noted there was potential for rules to affect the ability of broadcasters to perform currently common practices such as on-air competitions. Some stakeholders, including Verizon and the BBC, pointed out that the requirements are in fact narrower than the interpretation presented in the consultation. The Directive only requires that data of minors collected through age verification tools, or other technical measures for a similar purpose, may not be used for commercial purposes by audiovisual media service providers and VSPs. This would be consistent with the General Data Protection Regulation (GDPR), which only permits that data be used for the purpose that it is collected for.

Protection of Minors - Government response

As outlined in the consultation document, our approach was to align the requirements for ODPS to linear by amending section 368E of the Communications Act 2003. The majority of respondents agreed with our approach. We have noted the strong preference by the majority of respondents to ensure ODPS providers have a degree of flexibility when providing sufficient information to viewers, which will ensure the protection of minors. We will therefore be making amendments to 368E and allow flexibility in provision of sufficient information to viewers, which will be subject to guidance from Ofcom.

For both linear and on demand, we consider that the UK already exceeds the requirements for protection of minors requirements, however, for on-demand, section 368E(5)(c) relates to material that ‘might seriously impair’, and this should be amended to reflect the new threshold of ‘may impair’.

The use of content descriptors are not mandated by the directive. However, we asked a number of questions regarding content descriptors within the consultation as these are specifically mentioned in the recitals to the revised Directive. We consulted to determine if there was evidence in relation to a standardised system of content descriptors. There was not enough evidence to suggest this is the correct approach. However, we will ensure that Ofcom have the necessary powers to ensure viewers are provided with sufficient information.

Having reviewed responses the government agrees that the restriction on processing data for commercial purposes should only be applied to data collected specifically for the purposes of protecting minors from harmful content. This aligns with Article 5 (1) (b) of the GDPR which provides that data collected for specific, explicit and legitimate purposes must not be further processed in a manner that is incompatible with those purposes. This would mean that if the data is collected for the purposes of protection of minors, including through the use of age verification tools, it could not subsequently be used for commercial purposes. Recital 38 of the GDPR points out that the personal data of minors deserves special protection, in particular “for the purposes of marketing or creating personality or user profiles.”

Audiovisual media services providers and VSPs are already required to give careful consideration when collecting data for the purposes of protecting minors, in particular when using age verification and other technical measures. The Age Appropriate Design Code (AADC) published by the Information Commissioner’s Office (ICO), is intended to provide guidance on the privacy standards that organisations should adopt where they are offering online services and apps that children are likely to access and which will process their personal data. The code is consistent with the requirements in AVMSD and GDPR.

4.2 Advertising

Implementation of advertising requirements

The consultation asked:

The government invites views on how best to implement the requirement to ensure that VSPs comply with the relevant advertising provisions, noting that the Directive encourages the use of co-regulation by Member States to meet its aims, and that there already exists a co-regulatory framework for advertising on linear broadcast and ODPS in the UK.

Those who answered this question supported the use of the existing regulatory framework to achieve this outcome, the majority also noting that this is a complex area.

The Centre for Competition Policy argued that the UK should rely as much as possible on existing co-regulatory frameworks. The Institute of Practitioners in Advertising (IPA) also supported the expansion of the existing co-regulatory system to include advertising on VSPs.

Channel 4 stressed a need for fundamental reform of the online advertising market, highlighting a disparity between the way advertising is regulated for broadcasters versus online, particularly with regard to liability of content providers and preclearance. These sentiments were echoed by other broadcasters, including ITV and Viacom who highlighted the impact on broadcaster revenue of advertising spend displacing to online. The Commercial Broadcasters Association (COBA) noted that the current system generally functions effectively but also highlighted the disparity in how broadcast and online services are regulated.

The Internet Association argued that proposed rules should only apply to advertising over which the VSP has meaningful control to ensure proportionality, and Tech UK shared a similar view in stressing that the subsequent direct liability of platforms should be limited. Verizon stated that government should make it clear that video search is out of scope of the Directive.

Advertising minutage

The consultation asked:

The government’s preferred approach is not to make legislative change with regards to the change of advertising minutes. Do you agree with this approach?

Do you consider that a review of the advertising minutes in the UK market should take place in relation to the liberalisation of scheduling of minutes set out in paragraphs 46-48?

The majority (92%) of respondents who answered this question agreed with the government’s approach not to make legislative change with regards to the change of advertising minutes.

S4C disagreed with the proposed approach and argued for the relaxation of the current restrictions on advertising minute per hour and the flexibility to apply a 20% limit over a greater number of hours, as the current restrictions could prove problematic during live events. ITV noted that minutage rules are set by Ofcom, and there may be a case for a review of such rules. ITV, Discovery and the Centre for Competition Policy also agreed that such a review may be desirable at the right time, but the majority of respondents opposed this proposal. COBA argued that “changes to advertising minutes could have a profoundly destabilising impact on the industry as a whole at a time when it needs greater certainty, and it is extremely difficult to predict outcomes with any reasonable degree of clarity.”

Advertising - Government response

On the subject of co-regulation of VSP advertising, we recognise the complexity of this area. We understand broadcasters’ concerns in this area, and more broadly across the online advertising market. Noting that the Secretary of State announced a review of online advertising and that the CMA is undertaking a market study of the digital advertising market, we believe this work may address many of the complexities and concerns raised that are broader in scope than this Directive.

In the meantime, we note the broad consensus in favour of extending the existing co-regulatory system applied to ODPS to include also VSPs, as the appropriate means to meet the minimum requirements of the Directive. We intend therefore to proceed with this approach, and set out more detail on this in sections 5 and 6.

The co-regulatory framework would address two types of advertising. The first type of advertising is that which is marketed, sold or arranged by VSPs, and the second is that which is not directly marketed, sold or arranged by the VSP. It will ultimately be the responsibility of VSPs to comply with the requirements set out in Article 9(1) and 28b with respect to the former category. VSPs will also need to take appropriate measures, taking into account the limited control they exercise over much of their content, with respect to the latter. This latter responsibility also requires that VSPs make tools available to users on the platform to enable them to be transparent in declaring where uploaded videos contain audiovisual commercial communications.

Regarding minutage, as set out in our consultation, we do not propose to make legislative changes to the advertising minutage rules and there was no definitive evidence submitted to the consultation to justify doing so. Ofcom has a number of duties under sections 319, 321 and 322, in relation to setting Codes and Standards for Advertising COSTA, which includes the setting of minutes. Not making a change at this stage does not prevent a review at an appropriate time in the future, however there are no immediate plans to request that Ofcom undertakes such a review of the advertising minutes.

4.3 Accessibility

The consultation asked:

The government’s preferred approach is to consider the recommendations set out in Ofcom’s report on accessibility for on-demand; in the event that taking forward Ofcom’s recommendation cannot be completed before the implementation deadline of 19 September 2020, that the copy-out is used to update the wording s368BC for ODPS of the Communications Act 2003. Do you agree with this approach?

Do you agree with the government’s preferred approach to ensure that the accessibility of emergency communications is made through existing provisions in Section 336 of the Communications Act?

The majority of respondents (67%) agreed with the government’s proposed approach to consider the recommendations regarding the design and implementation of accessibility for on-demand. However, COBA argued that proposals from Ofcom are disproportionately ambitious on their timescale. Channel 4 and ITV also noted concerns with regards to Ofcom’s proposed timescale and suggested some amendments to the Ofcom proposals to phase the requirements in.

The majority of respondents (91%) also agreed that the accessibility of emergency communications should be ensured through existing provisions in Section 336 of the Communications Act which sets out that “the Secretary of State may, at any time, by notice require Ofcom to direct the holders of the Broadcasting Act licences specified in the notice to refrain from including in their licensed services any matter, or description of matter, specified in the notice”.

Accessibility - Government response

As noted in our consultation, the Secretary of State has powers, under the Communications Act 2003 (as amended by the Digital Economy Act 2017), to make secondary legislation to put in place specific accessibility obligations for video on demand platforms. This power includes the requirement for Ofcom to conduct a consultation and report to the Secretary of State on the outcome of the consultation as to increasing the accessibility of on-demand programme services (ODPS). The Secretary of State will make regulations after considering the recommendations of Ofcom’s report, to be supported by guidance which will be issued by Ofcom. We are currently assessing Ofcom’s recommendations and are noting the additional views expressed by stakeholders in response to this AVMSD consultation.

The provisions of the directive require that both linear and ODPS are made continuously and progressively more accessible to persons with disabilities through proportionate measures. Taking this into account, we consider that the UK legislative framework is already in place to meet this obligation. In respect of linear, we have an extensive legislative regime for accessibility which has been in place since 2003. The Communications Act requires Ofcom to create a framework for improving accessibility through their code on television access services. Currently, Ofcom reviews the amount of accessibility requirements that a given linear service is required to provide in a continuous and proportionate way. This approach includes progressively increasing targets that have been set over a ten-year period, based on audience share and the services this applies to are reviewed regularly.

With regards to ODPS, section 368BC of the Communications Act was inserted by the Digital Economy Act to allow the Secretary of State to create requirements for ODPS providers, by making regulations. As the legislative framework is already in place, and the government is already working towards making regulations. As such, we believe that we are meeting the AVMSD requirements for ODPS accessibility. We therefore do not intend to make any further legislative changes to section 368BC.

We also note that the current requirement for ensuring that emergency communications are made via a power in section 336 of the Communications Act, which allows the Secretary of State to direct service providers to provide emergency communications, and that such a notice may require that such emergency communications are made in a way that is accessible. Accordingly we will ensure that the relevant powers the Secretary of State has to issue emergency communications will reflect the ability to allow this notice to require accessible communications. Recital 24 recognises that there may be exceptional cases where it may not be possible to provide emergency communications in a manner which is accessible, which may be reflected in such a notice.

4.4 European Works

Ofcom reporting and guidance

The consultation asked:

We propose that government amends the Communications Act 2003 to ensure that Ofcom produces a report every two years on the European Works quotas and prominence obligations, via copy-out. Do you agree?

The majority of respondents (94%) agreed with the government’s approach to amend the Communications Act 2003 to ensure that Ofcom produces a report every two years on the European Works quotas and prominence obligations, via copy-out. However, Discovery disagreed, questioning the value of doing so in the context of Brexit, when the UK will no longer be obliged to provide such information.

Prominence

The consultation asked:

We propose that government amends the Communications Act 2003 to ensure that Ofcom has to produce guidance on prominence of European Works in ODPS catalogues. Do you agree?

Are there core framework elements that should be included in this requirement to produce guidance?

Noting that prominence in on-line catalogues could encompass a wide range of practices (e.g separate section, dedicated search, information on home page), please indicate which would consider would be appropriate: 1. Separate section 2. Dedicated search 3. Information on home page 4. Other (please specify)

What would be your preferred way of introducing a new prominence requirement for European works content on ODPS catalogues?

The majority of correspondents (93%) agreed with the government’s proposed approach to amend the Communications Act 2003 to ensure that Ofcom has to produce guidance on prominence of European Works in ODPS catalogues. A number of respondents caveated their response to argue that Ofcom should do this in consultation with industry and other stakeholders. Discovery disagreed with the proposal as they questioned whether the case required prominence of European content in ODPS.

In response to whether any core framework elements should be included in this requirement to produce guidance, COBA opposed imposing restrictions or requirements on algorithms that support search terms. The Internet Association also proposed that guidance should provide maximum flexibility, a view shared by a majority of respondents providing comments on this question. Most noted that Ofcom should be given flexibility and any guidance should take into account the Commission’s guidelines.

The majority of submissions responding to how prominence in online catalogues could be achieved echoed views offered by the Centre for Competition Policy. This suggested that a variety of tools and practices could be appropriate, and these may differ across platforms and interfaces. They suggested that Ofcom could focus on an outcomes based approach instead of prescriptive solutions, which may anticipate the development of new types of services.

Exemptions

The consultation asked:

Noting that the Commission is due to publish guidance in relation to low turnover and low audience, do you agree with the proposed approach that we allow for exemptions for quota and prominence obligations based on this guidance by amendment to sections 368C(3) (368Q(3) for the Welsh Authority) of the Communications Act 2003?

All respondents that answered this question agreed with the government’s proposed allowance for exemptions for quota and prominence obligations based on the criteria in the Commission guidance.

COBA provided an extensive response on defining low turnover for the purposes of exemptions, stating that group level revenues should not be taken into account. Instead it supported an approach based on the size of individual channels or on-demand services, rather than the overall corporate group of which they are a part of. It supported the proposal made by the Association of Commercial Television in Europe (ACT) as an alternative to that of the European Commission’s.

In defining low audience, COBA also favoured the approach suggested by ACT, which suggests that 20% of channels account for 80% of audience share, and that the channels outside the top 20% should be excluded. In the UK, this would equate in practice to channels with an audience share of under 0.5% being excluded.

Lastly, the Producers Alliance Cinema and Television (PACT) propose that a thematic exception should be established in the legislation to provide legislative support to Ofcom’s recognition of a thematic exception. It broadly agreed with the ACT definition that thematic services should be those that are “dedicated to a specific genre or topic and intended for a specific target audience.”

Guidance in relation to low turnover and low audience is anticipated to be published by the European Commissionin January 2020.

Levies

The consultation asked:

Do you consider that the current level of funding for European Works in the UK is sufficient? Please provide evidence.

The government currently has no plans to introduce a levy, however, do you think a levy scheme to fund European Works could be an effective way to provide funding? Please explain why.

Are there alternative methods of funding European Works that you wish to provide views on?

The majority of respondents agreed with the government’s approach not to introduce a levy scheme to fund European works. PACT stated that it believed that the current level of funding for European Works in the UK was sufficient, and that the introduction of a levy could be problematic for independent production in the UK.

However, Directors UK regretted that successive UK governments have decided not to implement a number of levy schemes for the audiovisual sector that operate widely throughout the rest of Europe. The Centre for Competition Policy advised that the government should not rule out the option of introducing a levy, and assess what impact it might have. The BFI argued that funding for European works is crucial to maintaining and strengthening cultural diversity for audiences, which market forces alone cannot deliver. It cited measures such as tax reliefs, lottery funding, grant in aid and public service broadcasting, that are already in place for such purposes.

Quotas

The revised AVMSD requires that a 30% quota for European Works for ODPS. PACT argued that a 30% quota for European works was unnecessary, as British content sells well internationally. However, this requirement was not consulted on because the government has no discretion in implementing it within the Directive

European Works - Government response

The government intends to amend the Communications Act 2003 to ensure thatOfcom produces a report every two years on the European Works quotas and prominence obligations. Once the implementation period is over we will assess if such reporting obligations will still be required. We also intend to amend the Communications Act 2003 to ensure that Ofcom has a duty to produce guidance on prominence of European Works in ODPS catalogues, as well as guidance in relation to any exemptions that may apply.

The Commission is due to publish guidance in relation to the issues relating to these obligations, due for January 2020, which will assist Ofcom in these duties. The government expects that such guidance, which will not be binding or create new legal obligations, will take into account stakeholder views. The European Commission has stated that in drafting it seeks a balance between the objective of ensuring cultural diversity and that of avoiding unnecessary burdens on on-demand providers and national regulatory authorities.

The definition of European Works includes those countries that have signed and ratified the Council of Europe’s Transfrontier Television Convention, to which the UK is a party. UK content will therefore continue to qualify for European works after EU exit.

As stated in our consultation, at the current time we do not intend to introduce a levy. However, we will keep this issue under review going forward.

4.5 Video-sharing platforms - Implementation through Online Harms Framework

One of the main changes to AVMSD is the extension of scope to cover video-sharing platforms (VSPs). This extension will capture audiovisual content on a number of social media platforms, video-sharing sites, as well as some pornography sites and live streaming services.

The original consultation outlined the government’s intention to incorporate the requirements through the regulatory framework proposed in the Online Harms White Paper (with the exception of those related to commercial communications that are not in the proposed scope of the Online Harms regulatory framework). However, to ensure we meet the transposition deadline of 20 September 2020, we will take forward the interim approach set out in the supplementary consultation document published on 23 July (see section 4.6).

As a result, the first consultation asked about the government’s long-term plan to implement the VSP provisions of AVMSD through the Online Harms framework, which is what the question below covers. We have also included the responses to the supplementary consultation, under section 6, which was specifically about the interim measures.

The consultation asked:

Do you agree with the proposed approach of implementing the provisions pertaining to VSPs in the 2018 Directive through the regulatory framework outlined in the Online Harms White Paper?

If not, please explain why you deem this approach to be deficient and what alternative approach you would advocate.

The majority of respondents (91%) agreed with the proposed approach of implementing the provisions pertaining to Video Sharing Platforms (VSPs) in the 2018 Directive through the regulatory framework proposed in the Online Harms White Paper. For example, the Motion Picture Association (MPA) noted that the measures in the Online Harms White Paper (OHWP) may go beyond the requirements in the AVMSD, but that this is justified in light of the clear and urgent public policy need to tackle serious personal and social harms due to increasing amounts of user-generated content (UGC).

However, some stakeholders noted the need to ensure consistency and clarity between the AVMSD and Online Harms White Paper. Virgin Media noted that the definition of a VSP in the Directive is narrower than the proposed scope (user generated content) of the Online Harms regulatory framework. Sky highlighted that the AVMSD VSP regime is based on the Country of Origin principle (and thus the regulator’s remit would only cover UK based VSPs), while the OHWP aims to protect UK users of services based anywhere, not just in the UK.

The consultation also invited responses to the separate public consultation on the wider Online Harms proposals set out in the White Paper. This consultation opened on 8 April and closed on 1 July and can be accessed here.

Introduction of interim measures

The consultation asked:

Do you agree with the approach set out in paragraph 82 to appoint Ofcom as the National Regulatory Authority as an interim measure if required?

In the original consultation, all respondents answering this question agreed that Ofcom should be appointed as the interim National Regulatory Authority if required. However, a small number of stakeholders expressed concern that an interim approach could cause unnecessary complication - in particular for small businesses - and in the follow-up consultation on specific interim measures, recommended that the government ask the European Commission for a short delay to the implementation of AVMSD. This would mean that the requirements could be implemented through the Online Harms legislation.

Video Sharing Platforms Implementation through the Online Harms White Paper - Government response

As set out in the primary AVMSD consultation document, the government’s preference is to ensure that video-sharing platform requirements are encompassed in the upcoming Online Harms framework. Many of the measures in the AVMSD pertaining to video-sharing platforms complement the government’s proposals set out in the Online Harms White Paper. This aims to design a comprehensive regulatory framework addressing harms across a broader range of online service providers. This is with the exception of commercial communications that are not in the proposed scope of the Online Harms regulatory framework. As this regulatory regime will not be in force by 19 September 2020, an interim measure is necessary.

We are mindful of the concern that having an interim regime prior to the passage of the Online Harms Bill could create issues for small businesses. Therefore, we will ensure that there is adequate support for those UK based VSPs in scope of the interim regime, as we incorporate the AVMSD provisions into the wider Online Harms framework.

4.6 Video-sharing platforms - interim measures consultation

In order to gather views on the details of the government’s interim approach for implementing the requirements pertaining to VSPs, we ran a separate, follow-up consultation, specifically on the AVMSD VSP requirements. The questions and answers below are part of that consultation.

Defining Video Sharing Platforms and their jurisdiction

The consultation asked:

Do you agree with the Government approach of transposing a definition for ‘video sharing platforms’ which sets out the minimum requirements of the Directive into UK law?

Do you agree that there is a role for regulatory authority (Ofcom) to provide and/or issue guidance to help service providers determine whether their services meet the definition of a video sharing platform?

If you are responding on behalf of a video sharing platform, given the Country of Origin Principle under which Member State’s jurisdiction would you consider your company falling under?

Can you list any other video sharing platforms which you expect would fall under the UK’s jurisdiction?

Stakeholders broadly agreed that we should transpose the definition for VSPs from the Directive, as they believe it is important that there is a uniform approach across Member States. This will, in turn, provide appropriate flexibility for the UK interim regulator to develop a regulatory regime that meets the requirements of the directive, but also to develop proposals that reflect the Online Harms White Paper.

However, Snap and Safecast raised concerns that the definition of VSPs within the Directive was not clear enough. Snap recommended that the Government adopt clear definitions in the planned transposition of AVMSD provisions, to prevent any regulatory overreach into the private sphere and protect citizens’ fundamental rights. Safecast echoed this, claiming the definition would be unnecessarily broad and could give rise to disputes and litigation in the future.

With regard to requiring Ofcom to produce regulatory guidance on the definition of VSPs, again, stakeholders were broadly supportive of this as they felt guidance on definitions would provide clarity to businesses. There was a particular desire for clarity on the definition of ‘‘essential functionality’’ as this could cause significant questions over which services (or part of them) would be in scope. However, when developing the guidance, given the cross-border nature of the provision of VSP services, they felt it would be appropriate for Ofcom to take the European Commission’s guidelines and other international work into account. Stakeholders also favoured guidelines that would be developed through meaningful engagement with industry.

The Regulatory Framework: Co-regulation

The consultation asked:

Do you agree with the approach of: allowing for co-regulation in legislation; in practice for Ofcom to solely regulate content in the absence of an appropriate industry body; and for the ASA to be designated as the co-regulator for advertising?

Broadly, stakeholders thought Ofcom’s appointment as the interim regulator would provide important regulatory consistency in the content rules applied to VSPs and on-demand programme service (ODPS), and in the manner in which they are regulated. The majority also supported the ASA as a co-regulator for commercial communications - with the Advertising Association agreeing on the condition that this would not entail any changes to the self-regulatory status of the non-broadcast CAP code (as it applies to online commercial communications falling outside the scope of AVMSD). Safecast however, thought Ofcom should solely regulate.

Some stakeholders were concerned about whether the ASA and Ofcom would be given sufficient legal powers and sufficient funding by VSPs to ensure they are able to regulate these interim measures effectively. A number of stakeholders argued that Ofcom and the ASA would need to take into account differences between VSPs and ODPS when regulating commercial communications. Google and the Internet Advertising Bureau (IAB) also thought industry should be consulted throughout the process of implementation, and that co-regulation should be focused in areas where it would be most effective, such as commercial communications.

The Regulatory Framework: Advertising

The consultation asked:

Should regulation of commercial communications on VSPs arising from AVMSD apply to: 1. Advertising which appears anywhere on a service as a result of the user visiting that service e.g. in the margins or across the top of a webpage 2. Advertising which can only be viewed as a result of the user selecting a programme or user generated video to view.

The majority of stakeholders felt that regulation of commercial communications should apply to advertising which can only be viewed as a result of the user selecting a programme or user generated video to view. However, Channel 4, ITV and Safecast thought it should apply to advertising appearing anywhere on the service, with Channel 4 arguing that this would be the more consistent approach.

Stakeholders in favour of option b) argued that commercial regulation should mirror existing arrangements for ODPS and that they consider the intention of the new rules on VSPs is to protect users accessing video content on those VSPs, rather than other material viewed as a result of the user visiting the VSP service, and that to bring the latter into scope would bring other online platforms into scope. The advertising which is not viewable only by selecting a programme or user generated video to view, should continue to be subject to ASA self-regulation through the CAP Code. Respondents also stressed that in order to be proportionate, the proposed rules regarding commercial communications directly marketed, sold or arranged by VSPs should only apply to advertising over which the VSP has meaningful control.

The Regulatory Framework: Appropriate measures

The consultation asked:

Do you agree that there should be a role for Ofcom in providing guidance to video sharing platforms about what appropriate measures are required to ensure compliance with the measures imposed by the Directive?

How should Ofcom determine what measures are practicable and proportionate for different types of content, users and services?

When determining what measures will be deemed appropriate, stakeholders felt that Ofcom should be careful that they do not require disproportionate actions from smaller companies as this would pose a barrier to new entrants and challengers to the market.

ITV voiced specific concerns regarding the potential risk to broadcasters where they have a licensed broadcasting channel on a VSP, like YouTube. Although the editorial responsibility for the channel falls squarely on the broadcaster as the provider of ODPS, it is unclear what would happen if a viewer complained to the VSP in relation to content shown on a broadcaster’s channel.

Some organisations mentioned the overlap with Part 3 of the Digital Economy Act 2017, which would introduce age verification for online pornography. Since the close of this consultation, the DCMS Secretary of State has announced the intention to meet these policy objectives via the Online Harms regulatory regime and Part 3 will not be commenced. As a result, we will not address these points directly here.

The Regulatory Framework: Information gathering

The consultation asked:

Do you agree that Ofcom be given powers, similar to those under section 368O of the Communications Act 2003, to require information from video-sharing platforms in order to fulfil their regulatory duties?

Stakeholders were broadly supportive of information requiring powers, as it would provide greater consistency between Ofcom’s regulation of services. However, they believed that these powers need to be balanced and accompanied by safeguards to ensure the reasonableness and proportionality of information requests.

The Regulatory Framework: Enforcement, redress and sanctions

The consultation asked:

Do you agree that video sharing platforms should be subject to a notification regime?

The majority of stakeholders were content with a notification system. However, TechUK thought requiring VSPs to register and notify with Ofcom, before offering services would far exceed the purposes of AVSMD and would greatly inhibit new platforms from setting up in the UK.

The Regulatory Framework: Sanctions

The consultation asked:

Noting the existing regime for on demand programme services which provide for a range of sanctions which could include enforcement notices, financial penalties and the potential suspension or restriction to provide a service), do you agree that similar sanctions mechanisms can be applied to video-sharing platforms?

Do you agree with the Government’s proposal that the maximum fine and other offences for video-sharing platforms mirror that of other services regulated AVMS services?

If you answered yes to the previous question, what should constitute ‘qualifying revenue’ for video sharing platforms?

Stakeholders broadly supported similar sanctions mechanisms to those that apply to ODPS, being applied to VSPs. They believed that it would be more consistent, and provide greater clarity for regulators and platforms, if Ofcom introduced a sanctions regime that more closely aligned with the current regulation of ODPS during the interim period. However, any sanctions regime would have to be proportionate to the size and scale of the service.

However, TechUK felt that any sanctions should be gradual and phased, with fines only levied as final resort for the most serious non-compliance. They believed it was not appropriate that the VSP sanctions regime mirror that of ODPS, as the two are fundamentally different models. They believed that the ODPS model resembles broadcasting more closely therefore it was more feasible for their sanctions regime to be aligned.

Both the Institute of Practitioners in Advertising (IPA) and the IAB felt that sanctions for commercial communications should be considered separately, and subject to further consultation by Ofcom to ensure that the sanctions were appropriate.

Responses from stakeholders broadly advocated a proportionate approach and only expected fines to be issued in the most serious cases of structural non-compliance, rather than for one-off events.

Given the current broad definition of VSPs, and the developing nature of the industry, TechUK and the Internet Association would prefer a bespoke, lower maximum fine, compared to that currently in place for ODPS. They thought the level of the fine should be determined through stakeholder engagement.

With regard to qualifying revenue, responses were split based on industry/interest. ODPS and linear services wanted it to mirror Ofcom’s current definition of qualifying revenue for ODPS i.e. the aggregate of all amounts received, or to be received, by the provider. Whereas VSPs and tech sector representatives felt the qualifying revenue needed to be limited to revenue derived from the regulated service, not the wider platform activities (which could include unrelated activities such as marketplaces, etc).

The Regulatory Framework: Redress and fees

The consultation asked:

Do you agree that the regulator should oversee the requirements that video sharing platforms have an easy to access complaints function, and provide an external out-of-court redress mechanism?

Do you agree for Ofcom in principle to charge fees to video-sharing platforms?

Stakeholders felt that any out-of-court redress mechanism must be manageable. The Internet Association highlighted that some VSPs may also be subject to the complaint-handling system under P2B Regulation (platform-to-business trading practices). As a result, they feel it is important to either take a consistent approach or alternatively consider a “one stop shop” across all regulation requiring redress mechanisms of this nature.

With regards to fees, similar to stakeholder views on qualifying revenue, responses on Ofcom charging fees were split by industry and interest. VSP and tech sector representatives were concerned about whether any industry levy would go beyond the purpose of cost-recovery for the regulator. On the other hand, they were also concerned that the regulator could become reliant on income from financial penalties to fund its activities. The VSPs / tech sector representatives also thought fees would hinder innovation, and risk pushing small companies out . Companies also raised concerns about cumulative burdens given the other costs that might be imposed on the same companies, such as a levy or fee for the new online harms regulator, the Digital Services Tax or voluntary industry contributions to tackle harm. TechUK said that the cost may be passed on to individual content creators and end-users, and ultimately may drive VSPs to register in other jurisdictions without such requirements. ITV and MPA on the other hand thought the onus for funding must rest solely on the VSPs and should not be passed onto the broadcasters who already finance Ofcom’s regulatory activities in the broadcasting space.

Video Sharing Platforms, Interim Measures - Government Response

In the follow-up consultation, we gathered detailed views on our interim approach for implementing requirements pertaining to VSPs. Following analysis of the responses, the government intends to implement the Directive in the most straightforward way possible - adhering to the minimum requirements of the Directive. This will comply with our international obligations and ensure a smooth transition once the long-term measures are in place.

We will appoint Ofcom as the national regulatory authority with the power to designate a co-regulator for VSPs. We will mirror the approach taken for ODPS regulation by not specifying an appropriate co-regulatory body in the implementing legislation. As no regulatory body has been established by the VSPs that could be a candidate for a co-regulator, Ofcom will be the sole regulator for the overall framework. However, in relation to commercial communications we note the existing relationship between Ofcom and the ASA, which is already employed to regulate advertising on linear broadcast and ODPS.

We will define VSPs and other relevant terms in accordance with the minimum requirements of the Directive, and Ofcom will provide guidance to help providers determine whether their services meet the definition. The guidance will take into account the European Commission guidelines and will be subject to consultation with stakeholders.

With regard to what advertising might be in scope, we note that VSPs are in scope of AVMSD because they host programmes and user generated videos, not simply because they serve advertising like other online platforms. At the same time, we want to ensure regulatory coherence and, reflecting consultees’ responses, consider alignment with the approach taken to ODPS as far as is practicable to be key. Therefore, we intend the rules to apply to all advertising which can be viewed by the user as a result of their selecting a programme or user generated video to view, wherever this might appear visible on the webpage. We would expect any other advertising appearing on the platforms to continue to be subject to ASA self-regulation.

Ofcom will have an obligation to issue guidance to VSPs on what appropriate measures are required of them to ensure compliance with the requirements set out in Article 28b(1) and (2). Such guidance will be practicable and proportionate, and shall consist of, as appropriate, the measures listed at Article 28b(3) of the Directive. Where appropriate, we envisage this guidance being drawn up in consultation with stakeholders. Ofcom will have an accompanying power to collect information from organisations about the measures they have taken to assess whether the steps are appropriate and sufficient to protect users. In order to determine jurisdiction, Ofcom’s powers should extend to requiring information from the services that they assess as video-sharing platforms but which have not submitted a notification.

Ofcom will have a duty to compile a list of VSPs in its jurisdiction on behalf of the UK, and communicate any updates directly to the Commission and other regulatory bodies as appropriate. Ofcom already performs such a function (on a non-statutory basis) in relation to on-demand programme and linear television providers, which it publishes on its website. In order for Ofcom to be able to fulfill its duty of compiling a list of video-sharing platforms, there will be an obligation on service providers to notify Ofcom that they are providing a service within the UK’s jurisdiction.

With regards to enforcement and sanctions, Ofcom currently has a range of sanctions available under the video-on-demand regimes (set out in section 368I of the Communications Act 2003): the ability to serve enforcement notices, apply financial penalties, and suspend or restrict services for non-compliant on-demand programme services. For video-on-demand services, Ofcom has the power to issue maximum fines of the greater of £250k and 5% of the provider’s qualifying revenue, as they deem to be appropriate and proportionate. Although some stakeholders expressed concern about the government’s proposals to replicate this sanctions regime for VSPs, we have considered that on balance this is a fair and transparent approach and is consistent with the current video-on-demand regulatory regime.

From the consultation responses we have considered what should constitute ‘‘qualifying revenue’’. Some stakeholders thought that qualifying revenue should be limited to revenue derived from the regulated service – not the wider platform activities (which could include unrelated activities such as marketplaces). However, to implement the directive in the most straightforward way, the VSP regime will mirror Ofcom’s current definition of qualifying revenue for ODPS which is the aggregate of all amounts received, or to be received, by the provider. This would be simpler than requiring services to report revenue from an individual regulated service stream.

In terms of redress, Ofcom will oversee the requirements for VSPs to have an effective and easy to access complaints function, and to have an external impartial appeals process. We expect Ofcom to consult on their approach to overseeing these requirements to ensure that the process they follow is proportionate.

Ofcom’s extension in remit to include VSPs will require powers to raise the necessary funds from industry through fees and charges. We intend to mirror section 368NA of the Communications Act 2003, giving the appropriate regulatory authority powers to require VSPs to pay a fee that is justifiable and proportionate, and setting the same set of obligations in relation to preparing estimates, statements and repayment. Ofcom would then, in consultation with industry, develop an appropriate charging regime for VSPs using these powers.

These interim measures will be in place until legislation implementing the Online Harms White Paper commences, where we will implement the requirements through that wider regulatory framework.. This does not apply to those requirements relating to commercial communications that are not in the proposed scope of the Online Harms regulatory framework. Subject to the outcome of the online advertising programme of work, we expect the requirements relating to commercial communications to remain in force.

4.7 Signal integrity

The consultation asked:

What would be your preferred way of introducing a new requirement for ensuring that appropriate and proportionate measures to ensure that audiovisual media services provided by media service providers are not, without the explicit consent of those providers, overlaid for commercial purposes or modified?

The consultation asked how stakeholders preferred government to ensure that audiovisual media services are not, without the explicit consent of providers, overlaid for commercial purposes or modified.

SafeCast took the view that any unauthorised modification for commercial purposes is already protected by the body of common law on unfair competition, which would render such actions as a form of passing off or as a deceptive business practice that causes economic harm. No implementation was therefore required.

The BBC welcomed implementation of the relevant article, highlighting its importance in ensuring the broadcaster fulfill its Editorial Guidelines. These state that the BBC must maintain independent editorial control over its content in order to uphold its reputation and the strength of its brand. In terms of implementation, the BBC noted that the subject matter to be protected was ‘programmes and audiovisual media services’ (as per Recital 26). Any legislative obligation to respect the integrity of these programmes and services had to therefore be imposed on all persons involved in or having the power to influence their distribution and display to end users. “Specifically, the legislation would need to capture practices of both: i. Persons who meet the definitions of ECNs and ECS, including the new definitions to be implemented in the UK via the European Electronic Communications Code; and ii. All other persons (whether licensed or not) involved in or having the power to influence the distribution and display of the programmes and services to end users.”

Other public service broadcasters shared similar concerns.

Sky argued that the UK should not “gold-plate the requirements of the AVMSD and should strictly limit any new requirements to overlays or modifications for commercial purposes.” The use of overlays was essential to a “number of core platform functionalities” on services such as Sky Q. Functionalities including “subtitles, warning messages, reminders, billing messages and now, next and later notifications” should not fall into the scope of any new requirements.

Tech UK proposed that enforcement should only be considered after repeated non-compliance. The use of overlays allowed some content to be monetised and could benefit consumers through lower prices and personalised content.

Signal Integrity - Government response

The government proposes to implement the requirement to ensure that audiovisual media services are not, without the explicit consent of providers, overlaid for commercial purposes or modified by introducing a penalty scheme

4.8 Media Literacy

The consultation asked:

In addition to the measures described in the section on Media Literacy, are there any other legislative and non-legislative measures government should be taking to fulfill the obligations of promoting the development of media literacy skills set out in Article 33a(1)?

The majority of stakeholders supported efforts to promote media literacy. The Internet Association supported the proposal for a new online media literacy strategy, as set out in the OHWP. Snap called for such proposals to be fast tracked. The Advertising Association highlighted the advertising industry’s Media Smart programme, which has a mission to ensure young people in the UK can confidently navigate the media they consume including being able to identify, interpret and critically evaluate all forms of advertising.

There were no further measures suggested in addition to Ofcom’s duty under section 11 of the Communications Act 2003 to promote media literacy.

Media Literacy - Government response

Industry and government have a shared responsibility to empower users to manage their online safety. The government maintains its commitment to ensuring that the UK public have the skills they need to fully assess the information they consume. We consider Ofcom’s existing duties to be sufficient in order to meet requirements in the revised directive.

Nevertheless, the OHWP sets out the government’s intention to develop an online media literacy strategy. The strategy will ensure a coordinated and strategic approach to online media literacy education and awareness for children, young people and adults. The White Paper also set out that as part of this work, there would be a comprehensive mapping exercise to identify what actions are already underway, and to determine the objectives of an online media literacy strategy. DCMS has now commissioned this mapping as part of a wider piece of analysis which will also consider existing research on the levels of media literacy among users, and evaluate the evidence base for media literacy interventions. This research is due to be completed before the end of the financial year and we will publish the media literacy strategy by summer 2020.

4.9 Transparency of ownership

The consultation asked:

Are you in favour of introducing additional measures which would require audiovisual media services providers under the UK jurisdiction to make information concerning their ownership structure, including the beneficial owners, accessible?

The majority of respondents to this question were in favour of introducing additional measures, which would require audiovisual media services providers under the UK jurisdiction to make information concerning their ownership structure and beneficial owners, accessible. However, only five submissions addressed this issue.

The Centre for Competition Policy stated that the optional measures on transparency of ownership should “enable a media literate public to make critical judgements about the sources of their information and entertainment.” Channel 4’s submission echoed this sentiment.

However, the NMA argued that no additional measures were necessary in respect of transparency of newspaper ownership, as newspaper and cross-media ownership, mergers and transfers were subject to the requirements of the statutory media ownership regime.

Sky stated that such measures would help it manage the third-party channels it provides access to on its platform.

Transparency of Ownership - Government response

The provision to require disclosure of information about a media service provider’s company ownership structure is optional. Due to the low number of submissions addressing this issue and a lack of substantive evidence, the government does not consider that it should deviate from transposition principles and go beyond the minimum requirements of the measure. We note that the UK already has transparency requirements with regards to company ownership as set out in Part 21A of the Companies Act 2006, which requires companies to identify and keep a register of persons with significant control over them. This remains the same in the event of no deal.

4.10 Other considerations

Press freedom

Some stakeholders expressed concern that provisions in the revised Directive might impact negatively on press freedom. The Professional Publishers Association (PPA), for example, stated that the government “should prioritise the safeguarding of press freedom when framing any UK primary legislation, secondary legislation, codes or guidance, to ensure magazines and news publishers remain outside the scope of the AVMSD”.

The Government is committed to protecting the freedom of the press and recognises that a vibrant and free press plays an invaluable role in our cultural and democratic life. We want to make sure that this continues, with high journalistic standards working in the public interest. As noted in the consultation, online newspapers are out of scope of the directive, except where they provide a dissociable video-on-demand service, this is reflective of the position under the existing Directive as interpreted in accordance with EU case law. Therefore, we do not consider there to be a material change to the current situation with regard to press freedom in the measures within the Directive.

Scope

Stakeholders representing the news and publishing industry also expressed concern over a potential increase in scope of regulation. The NMA stated that it “would strongly oppose any government proposals for implementation of the revised AVMSD, including all the new regulatory requirements relating to video sharing platforms, or related legislation including the online harms white paper, which might deliberately or inadvertently extend and impose AVMSD or related requirements, restrictions, liabilities and sanctions upon news publishers, newspaper websites, content and services where these are outside the scope of the AVMSD.”

The government maintains its position that while newspaper websites remain outside the scope of the 2018 Directive and the future online harms framework, standalone parts of newspapers’ websites providing video services which are independent of the journalistic activities in content and form do fall into scope. The use of videos on websites, blogs and news portals which are connected to the journalistic activities falls outside the scope of the new provisions. This change reflects existing case law of the European Court of Justice on the issue, which found that the concept of a programme within the AVMS Directive includes video under the sub-domain of a newspaper website.

Public vs private

Snap raised the importance of distinguishing between the public and private sphere. It argued that “in order to avoid any confusion or over-reach into the private sphere, we recommend that the government makes the scope of the new rules still more explicit than provided for in the Directive. The main domestic reason for this is the development of the OHWP, which too requires similar clarification. Thus far, the government’s exclusion of the private communications space from OHWP’s scope has been correct in principle, but too vague in practice.”

Snap recommended that Electronic Communications Services (ECS), as defined in the Communications Act 2003, are carved out from any implementation of the AVMSD, to “ensure the protection of citizens’ private communications rights and better define the scope of the AVMSD’s public broadcast-type coordinated field.”

The government recognises that the AVMSD regulatory framework does not intend to cover private communications. There is sufficient clarity on the focus of the Directive, as well as the proposed means of implementation.

5. Next steps

The government will take forward measures outlined in this document. In line with government policy, the intention is that the required changes to the law come into effect on time, by the deadline for implementing the Directive on 19 September 2020.

1. How to implement European Directives effectively https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/682752/eu-transposition-guidance.pdf ↩

2. Sanctions could include enforcement notices, financial penalties and the potential suspension or restriction to provide a service. Sanctions were described in Section D of the ‘Audiovisual Media Services: interim approach to implementing requirements relating to Video Sharing Platforms’ Consultation Document. ↩