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C 262/34 EN Official Journal of the European Communities 19.8.

98

COMMON POSITION (EC) No 43/98
adopted by the Council on 29 June 1998
with a view to the adoption of Directive 98/. . ./EC of the European Parliament and Council of
. . . on the legal protection of services based on, or consisting of, conditional access

(98/C 262/03)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF impart information regardless of frontiers and
THE EUROPEAN UNION, whereas any restriction of that right must be based
on due consideration of other legitimate interests
deserving of legal protection;
Having regard to the Treaty establishing the European
Community, and in particular Articles 57(2), 66 and
100a thereof,
4. Whereas the Commission undertook a
wide-ranging consultation based on the Green
Having regard to the proposal from the Commission (1), Paper ‘Legal Protection of Encrypted Services in
the Internal Market’; whereas the results of that
consultation confirmed the need for a Community
Having regard to the Opinion of the Economic and Social legal instrument ensuring the legal protection of all
Committee (2), those services whose remuneration relies on
conditional access;

Acting in accordance with the procedure laid down in
Article 189b of the Treaty (3),
5. Whereas the European Parliament, in its
Resolution of 13 May 1997 on the Green
1. Whereas the objectives of the Community as laid Paper (4), called on the Commission to present a
down in the Treaty include creating an ever closer proposal for a Directive covering all encoded
union among the peoples of Europe and ensuring services in respect of which encoding is used to
economic and social progress, by eliminating the ensure payment of a fee, and agreed that this
barriers which divide them; should include information society services
provided at a distance by electronic means and at
the individual request of a service receiver, as well
2. Whereas the cross-border provision of as broadcasting services;
broadcasting and information society services may
contribute, from the individual point of view, to
the full effectiveness of freedom of expression as a
fundamental right and, from the collective point of
6. Whereas the opportunities offered by digital
view, to the achievement of the objectives laid
technologies provide the potential for increasing
down in the Treaty;
consumer choice and contributing to cultural
pluralism, by developing an even wider range of
3. Whereas the Treaty provides for the free services within the meaning of Articles 59 and 60
movement of all services which are normally of the Treaty; whereas the viability of those
provided for remuneration; whereas this right, as services will often depend on the use of conditional
applied to broadcasting and information society access in order to obtain the remuneration of the
services, is also a specific manifestation in service provider; whereas, accordingly, the legal
Community law of a more general principle, protection of service providers against illicit devices
namely freedom of expression as enshrined in which allow access to these services free of charge
Article 10 of the European Convention for the seems necessary in order to ensure the economic
Protection of Human Rights and Fundamental viability of the services;
Freedoms; whereas that Article explicitly
recognizes the right of citizens to receive and

7. Whereas the importance of this issue was
(1) OJ C 314, 16.10.1997, p. 7. recognized by the Commission Communication on
(2) OJ C 129, 27.4.1998, p. 16. ‘A European Initiative in Electronic Commerce’;
(3) Opinion of the European Parliament of 30 April 1998 (OJ C
152, 18.5.1998, p. 64), Council Common Position of 29
June 1998, and Decision of the European Parliament of . . .
(not yet published in the Official Journal). (4) OJ C 167, 2.6.1997, p. 31.
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8. Whereas, in accordance with Article 7a of the 15. Whereas, therefore, the legal framework for the
Treaty, the internal market is to comprise an area creation of a single audiovisual area laid down in
without internal frontiers in which the free Council Directive 89/552/EEC of 3 October 1989
movement of services and goods is ensured; on the coordination of certain provisions laid
whereas Article 128(4) of the Treaty requires the down by law, regulation or administrative action
Community to take cultural aspects into account in in Member States concerning the pursuit of
its action under other provisions of the Treaty; television broadcasting activities (1) should be
whereas by virtue of Article 130(3) of the Treaty, supplemented with reference to conditional access
the Community must, through the policies and techniques as laid down in this Directive, in order,
activities it pursues, contribute to creating the not least, to ensure equal treatment of the suppliers
conditions necessary for the competitiveness of its of cross-border broadcasts, regardless of their place
industry; of establishment;

16. Whereas, in accordance with Council Resolution of
9. Whereas this Directive is without prejudice to
29 June 1995 on the effective uniform application
possible future Community or national provisions
of Community law and on the penalties applicable
meant to ensure that a number of broadcasting
for breaches of Community law in the internal
services, recognised as being of public interest, are
market (2), Member States are required to take
not based on conditional access;
action to ensure that Community law is duly
applied with the same effectiveness and
thoroughness as national law;
10. Whereas this Directive is without prejudice to the
cultural aspects of any further Community action
concerning new services; 17. Whereas, in accordance with Article 5 of the
Treaty, Member States are required to take all
appropriate measures to guarantee the application
and effectiveness of Community law, in particular
11. Whereas the disparity between national rules by ensuring that the sanctions chosen are effective,
concerning the legal protection of services based dissuasive and proportionate and the remedies
on, or consisting of, conditional access is liable to appropriate;
create obstacles to the free movement of services
and goods;
18. Whereas the approximation of the laws,
regulations and administrative provisions of the
Member States should be limited to what is needed
12. Whereas the application of the Treaty is not
in order to achieve the objectives of the internal
sufficient to remove these internal market
market, in accordance with the principle of
obstacles; whereas those obstacles should therefore
proportionality as set out in the third paragraph of
be removed by providing for an equivalent level of
Article 3b of the Treaty;
protection between Member States; whereas this
implies an approximation of the national rules
relating to the commercial activities which concern
illicit devices; 19. Whereas the distribution of illicit devices includes
transfer by any means and putting such devices on
the market for circulation inside or outside the
Community;
13. Whereas those commercial activities which concern
illicit devices include commercial communications
covering all forms of advertising, direct marketing, 20. Whereas this Directive is without prejudice to the
sponsorship, sales promotion and public relations application of any national provisions which may
promoting such products and services; prohibit the private possession of illicit devices, to
the application of Community competition rules
and to the application of Community rules
concerning intellectual property rights;
14. Whereas those commercial activities are
detrimental to consumers who are misled about the
origin of illicit devices; whereas a high level of
21. Whereas national law concerning sanctions and
consumer protection is needed in order to fight
remedies for infringing commercial activities may
against this kind of consumer fraud; whereas
Article 129a(1) of the Treaty provides that the
Community should contribute to the achievement (1) OJ L 298, 17.10.1989, p. 23. Directive as amended by
of a high level of consumer protection by the Directive 97/36/EC of the European Parliament and of the
measures is adopts pursuant to Article 100a Council (OJ L 202, 30.7.1997, p. 60).
thereof; (2) OJ C 188, 22.7.1995, p. 1.
C 262/36 EN Official Journal of the European Communities 19.8.98

provide that the activities have to be carried out in — information society services within the meaning of
the knowledge or with reasonable grounds for Article 1(2) of Council Directive 83/189/EEC of
knowing that the devices in question were illicit; 28 March 1983 laying down a procedure for the
provision of information in the field of technical
standards and regulations (1),
22. Whereas the sanctions and remedies provided for
under this Directive are without prejudice to any or the provision of conditional access to the above
other sanction or remedy for which provision may services considered as a service in its own right;
be made under national law, such as preventive
measures in general or seizure of illicit devices; (b) ‘conditional access’ shall mean any technical measure
whereas Member States are not obliged to provide and/or arrangement whereby access to the protected
criminal sanctions for infringing activities covered service in an intelligible form is made conditional
by this Directive; whereas Member States’ upon prior individual authorization;
provisions for actions for damages are to be be in
conformity with their national legislative and (c) ‘conditional access device’ shall mean any equipment
judicial systems; or software designed or adapted to give access to a
protected service in an intelligible form;

23. Whereas this Directive is without prejudice to the (d) ‘associated service’ shall mean the installation,
application of national rules which do not fall maintenance or replacement of conditional access
within the field herein coordinated, such as those devices, as well as the provision of commercial
adopted for the protection of minors, including communication services in relation to them or to
those in compliance with Directive 89/552/EEC, or protected services;
national provisions concerned with public policy or
public security,
(e) ‘illicit device’ shall mean any equipment or software
designed or adapted to give access to a protected
service in an intelligible form without the
authorization of the service provider;

HAVE ADOPTED THIS DIRECTIVE: (f) ‘field coordinated by this Directive’ shall mean any
provision relating to the infringing activities specified
in Article 4.

Article 1

Scope
Article 3

The objective of this Directive is to approximate Internal market principles
provisions in the Member States concerning measures
against illicit devices which give unauthorised access to
protected services. 1. Each Member State shall take the measures necessary
to prohibit on its territory the activities listed in Article 4,
and to provide for the sanctions and remedies laid down
in Article 5.
Article 2

Definitions 2. Without prejudice to paragraph 1, Member States
may not:
For the purposes of this Directive:
(a) restrict the provision of protected services, or
associated services, which originate in another
(a) ‘protected service’ shall mean any of the following
Member State; or
services, where provided against remuneration and on
the basis of conditional access:
(b) restrict the free movement of conditional access
— television broadcasting, as defined in Article 1(a) devices for reasons falling within the field coordinated
of Directive 89/552/EEC, by this Directive.

— radio broadcasting, meaning any transmission by
wire or over the air, including by satellite, of radio (1) OJ L 109, 26.4.1983, p. 8. Directive as last amended by
programmes intended for reception by the Commission Decision 96/139/EC (OJ L 32, 10.2.1996, p.
public, 31).
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Article 4 When Member States adopt such measures, they shall
contain a reference to this Directive or shall be
Infringing activities accompanied by such reference at the time of their
official publication. The methods of making such
reference shall be laid down by Member States.
Member States shall prohibit on their territory all of the
following activities:
2. Member States shall communicate to the Commission
(a) the manufacture, import, distribution, sale, rental or the text of the provisions of national law which they
possession for commercial purposes of illicit devices; adopt in the field coordinated by this Directive.

(b) the installation, maintenance or replacement for
commercial purposes of an illicit device; Article 7

(c) the use of commercial communications to promote Reports
illicit devices.
Not later than five years after the entry into force of this
Directive, and every three years thereafter, the
Commission shall present a report to the European
Article 5 Parliament, the Council and the Economic and Social
Committee concerning the implementation of this
Sanctions and remedies Directive accompanied, where appropriate, by proposals
for adapting it in the light of technical and economic
developments.
1. The sanctions shall be effective, dissuasive and
proportionate to the potential impact of the infringing
activity.
Article 8

Entry into force
2. Member States shall take the necessary measures to
ensure that providers of protected services whose This Directive shall enter into force on the day of its
interests are affected by an infringing activity as specified publication in the Official Journal of the European
in Article 4, carried out on their territory, have access to Communities.
appropriate remedies, including bringing an action for
damages and obtaining an injunction or other preventive
measure, and where appropriate, applying for disposal
outside commercial channels of illicit devices. Article 9

Addressees

Article 6 This Directive is addressed to the Member States.

Implementation
Done at . . .
1. Member States shall bring into force the laws,
regulations and administrative provisions necessary to For the European Parliament For the Council
comply with this Directive by [. . .] (1). They shall notify
them to the Commission forthwith. The President The President

(1) 18 months after the date of publication.
C 262/38 EN Official Journal of the European Communities 19.8.98

STATEMENT OF THE COUNCIL’S REASONS

I. INTRODUCTION

1. On 23 September 1997, the Commission submitted a proposal for a European
Parliament and Council Directive on the legal protection of services based on, or
consisting of, conditional access.

The proposal is based on Articles 57(2), 66 and 100a of the EC Treaty.

2. The European Parliament delivered its first-reading Opinion on 30 April 1998.

The Economic and Social Committee delivered its Opinion on 25 February 1998.

Further to the European Parliament’s Opinion, the Commission submitted an amended
proposal on 20 May 1998.

3. The Council adopted its common position, under Article 189b of the Treaty, on 29
June 1998.

II. OBJECTIVE

The purpose of the proposal is to ensure an adequate level of legal protection to television,
radio broadcasting and information society services whose remuneration depends on
‘conditional access’ techniques such as encryption and electronic locks. Such services
include pay-TV, video-on-demand, audio-on-demand and electronic publishing. The
Member States will be obliged to prohibit, and provide appropriate sanctions against, a
wide range of commercial piracy activities which allow the circumvention of conditional
access techniques and give unauthorised access to protected service.

III. THE COMMON POSITION

1. General comments

The Council’s common position is in line with the objective and the content of the
Commission proposal to ensure an adequate level of legal protection of a broad range
of services that are provided against remuneration and on the basis of ‘conditional
access’ techniques.

2. Specific comments

The Council considered that a number of changes should be made to the Commission’s
proposal. However, these changes do not substantially alter objectives nor content of
the proposal. These changes are summarised hereafter:

(a) P r i n c i p a l c h a n g e s m a d e t o t h e C o m m i s s i o n p r o p o s a l

(i) Scope (Article 1)

The Council deemed it necessary to introduce a new article to make the scope
of the Directive clearer and more precise.

In order to give further examples of national measures not covered by the
Directive, recital 23 has been extended.
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(ii) Definitions (Article 2)

The Council considered it appropriate for reasons of legal certainty to make
the definitions clearer and easier to read. Therefore the following modifications
were made:

— the words ‘against remuneration’ have been moved from (b) to (a),

— the text of (d) has been clarified,

— the definition of ‘unauthorised access’ has been merged into the definition
of ‘illicit device’ in (e),

— previous (g) has been reworded and clarified.

(iii) Infringing activities (Article 4)

This Article, which deals with various infringing activities related to illicit
devices, illicit services and illicit promotion, states that only commercial
activities are unlawful, it being understood that Member States are free to take
measures at national level against private possession.

In order to clarify the provision of infringing activities and avoid possible
loopholes a reference to ‘rental’ and ‘distribution’ of illicit devices has been
added in the list of infringing activities. The Council also considered it
appropriate to clarify what is meant by ‘distribution’ in a new recital 19. In
order to make sure that infringements require intention (i. e. have to be
committed knowingly), the Council also included a new recital 21.

(iv) Sanctions and remedies (Article 5)

Article 5(2) sets out various remedies that can be invoked by service providers
in the Member States. The following modifications to the Commission
proposal relate to the nature of legal regimes in different Member States rather
than to the content of the proposal:

— to make the text clearer ‘service providers’ has been replaced by ‘providers
of protected services’,

— in order to take into account the different meaning of the notion of
‘injunction’ in the different national legal regimes, the common position is
completed with a specific reference to ‘other preventive measures’,

— the notion of ‘seizure’ has been replaced by ‘disposal outside commercial
channels’, since ‘seizure’ can in certain legal systems only be executed under
criminal law,

— in order to clarify these issues further, a new recital 22 has been added.

(b) C o u n c i l p o s i t i o n o n t h e E u r o p e a n P a r l i a m e n t ’ s a m e n d m e n t s

(i) Amendments included in whole or in part in the common position

The Council retained eleven amendments (Nos 1, 2, 6, 7, 8, 12, 13, 15, 19, 23
and 24) proposed by the European Parliament.

— Amendments 1, 6, 8, 12 and 23 have been incorporated verbatim.
However, it should be noted that amendment No 23 has been incorporated
in a new recital 13 instead of an Article,
C 262/40 EN Official Journal of the European Communities 19.8.98

— Amendments 2, 7, 13, 15, 19 and 24 have been adopted in spirit with
slight modifications.
Amendment No 2 is modified to reflect the exact wording of the Treaty;
amendment No 7 is supplemented by the words ‘possible future’ before
community or national provisions, since no such legislation exists at the
moment; amendment No 13 is modified in order to maintain coherence with
the original proposal; in amendment No 15 the words ‘measures by Member
States’ have been replaced by ‘national provisions’; amendments Nos 19 and
24 are reflected in spirit.

(ii) Amendments not incorporated in the common position
In declining to include amendments Nos 5, 9, 11, 18, 20, 21, 22 and part of
23 in its common position, the Council endorsed the Commission’s position as
set out in its amended proposal.
As regards the remaining amendments, the Council was guided by the
following considerations:
— Amendments Nos 3, 4, 10, 16, 17 and 25: the Council did not deem it
advisable to insert these amendments which related to the use of
conditional access for reasons other than the protection of remuneration,
since they are not covered by the objectives of the proposal,
— Amendment No 14: the Council took the view that it was inappropriate to
add a recital that included such a specific reference to the content of this
Commission’s Communication.