Category: Publications

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Our Slovak partner, Martin Provazník, participated in preparing a comparative analysis in the joint chapter called Avoidance Actions and Proposed EU-level Harmonisation for the Yearbook 2023 INSOL EUROPE, with its contribution on the Slovak avoidance action regime.

The chapter was created in cooperation with Incoronata Cruciano (Germany), Klaudia Frątczak-Kospin (Poland), Paul Johnson (UK), Stéphanie Oneyser (Switzerland) and Pieter Wouters (Belgium).

You can read it here ➢ https://lnkd.in/eFtbnr-W

An article by Vladimir Griga

On 24 September 2020, the European Commission published a proposal for a Regulation on Markets in Crypto-Assets (“MiCA”). This piece of legislation is only a part of a larger Digital finance package, including, amongst others, legislative proposals for a Digital Operational Resilience Act (“DORA”) and a Distributed Ledger Technology (“DLT”) Pilot Regime.

MiCA is quite extensive in its scope, covering all crypto-assets in the EEA, bar those that are already regulated by specific laws. Yet, at its core, the regulation aims to remove some of the obstacles in applying these new technologies, whilst also limiting money laundering, fraud and market manipulation activities in the EU’s cryptocurrencies market.

In a nutshell, the regulation sets minimum disclosure requirements for issuing crypto-assets, as well as defines the latter. On top of that, MiCA establishes further requirements for crypto-asset service providers and brings additional consumer protection rules.

Breaking down the various meanings of “crypto-assets”

Crypto-assets are quite broadly defined in the proposed regulation: “a digital representation of value or rights which may be transferred and stored electronically, using distributed ledger technology or similar technology”. However, the regulation does not encompass crypto-assets that are currently covered by other EU financial laws[1], e.g., the ones that qualify as financial instruments or electronic money (other than e-money tokens) – which will continue to be governed by their appropriate directives/regulations. Instead, MiCA intends to close the loopholes in the existing regulatory framework, by covering crypto-assets in general, as well as by introducing three specific categories of crypto-assets:

► asset-referenced tokens (g., DAI) – these are utilised as a means of exchange, considering their stable value which is maintained by referring to the value of several fiat currencies that are legal tender, one or several commodities/crypto-assets, or a combination of such assets;

► e-money tokens (g., USD Coin) – these crypto-assets are also used as a means of exchange, but they aim to maintain a stable value by referring to the value of a single fiat currency that is legal tender;

► utility tokens (g., Basic Attention Token, Filecoin token) – these are intended to provide digital access to a good/service, available on a distributed ledger, and are only accepted by the issuer of that token to grant access to the respective good/service.

The first two categories of crypto-assets basically hint at stablecoins, the key differentiating factor being if they are linked (i) to a single fiat currency (e.g., Euro, USD, GBP, etc.) – e-money tokens, or (ii) to several fiat currencies, commodities (e.g., gold, silver, etc.) or even other crypto-assets – asset-referenced tokens.

What’s more, these crypto-assets may be further classified, depending on their impact, into significant asset-referenced tokens (e.g., Diem – formerly Libra) or significant e-money tokens (e.g., Tether USD or the expected “Diem Euro”). Of course, with significant assets come significant requirements for their issuers. Not surprisingly, the role of assessing whether these crypto-assets are significant or not will be conferred to the European Banking Authority (“EBA”), who will have to evaluate if at least three of the following criteria are met:

► the size of the customer base;

► the value or the market capitalisation of the tokens;

► the number and value of transactions in the respective tokens;

► the size of the reserve of assets of the issuer of tokens;

► the significance of the cross-border activities of the issuer of such tokens;

► the interconnectedness with the financial system.

A staple element in this whole conundrum is that the broad definition of crypto-assets does not confine itself to the above subclassifications, but rather embraces them, together with all other types of crypto-assets that are not currently regulated, e.g., Bitcoin, Ether, Litecoin, Stellar, etc. This is why crypto-assets themselves may be regarded as a “catch-all” category or, simply put, a sort of residual “piggybank” for some of the digital coins of the future.

Issuing crypto-assets

Under MiCA, any person offering crypto-assets to third parties will be regarded as an issuer of crypto-assets. However, the regulation will not apply to central banks that issue crypto-assets or provide similar services.

Before making a public offering in the EU, generally, all crypto-asset issuers will have to prepare and publish a white paper, which shall include general information regarding the issuer, the project’s roadmap, the rights and obligations accompanying the crypto-asset, associated risks, etc. This white paper must be further notified to the national competent authorities (“NCAs”), and in case of asset-referenced tokens, it also needs to be approved by them, unless these assets are significant, in which case the EBA will handle the white paper. As anticipated earlier, the EBA will be responsible for the supervision and approval of both asset-referenced and e-money tokens which are deemed to be significant, MiCA providing that colleges of national supervisors be established to help the EBA in this regard.

However, there are some exceptions from the requirements of having a white paper in what concerns the issuers of crypto-assets other than asset-referenced or e-money tokens if:

► the crypto-assets are offered for free[2];

► the crypto-assets are created automatically via mining, as a reward for the maintenance of the distributed ledger or for the validation of transactions;

► the crypto-assets are unique and cannot be exchanged for other crypto-assets;

► the crypto-assets are offered to fewer than 150 natural/legal persons per Member State, should these persons act on their own account;

► over a period of 12 months, the total consideration of the public offer does not exceed EUR 1,000,000 or the equivalent amount in another currency or in crypto-assets; or

► the public offer is only addressed to qualified investors and only they can hold the crypto-assets.

Furthermore, MiCA will require all crypto-asset issuers to be incorporated as legal entities. Those who will issue asset-referenced tokens need to be established in the EU and be authorised by the NCA of their home Member State. On the other hand, the issuers of e-money tokens must be either an authorised credit institution or an electronic money institution[3] in compliance with all the applicable EU legislation.

There are other specific provisions for issuers of asset-referenced tokens and e-money tokens, especially for the former, which have more strict requirements. For asset-referenced tokens, the regulation includes rules regarding conflicts of interest, governance and minimal capital, along with rules on the custody of the reserve assets, and provisions for the stabilisation mechanism and the reserve of assets backing this type of tokens. In particular, issuers of asset-referenced tokens will be obliged to safeguard the security, integrity and confidentiality of information. In what concerns e-money tokens, their holders should always have redemption right at any moment and at par value with the fiat currency that the e-money token is referencing. Issuers of both asset-referenced and e-money tokens will be prohibited from granting interests or any other benefit to users of such tokens for the length of time they are holding the tokens. This is to ensure that the tokens are mainly used as a means of exchange, rather than as a store of value.

Providing services related to crypto-assets

Crypto-asset service providers are legal persons that engage in activities such as brokerage, exchange, trading, custody or giving advice on crypto-assets. With the exception of credit institutions[4] and investment firms[5], all other crypto-asset service providers are required to obtain specific authorisation from an NCA in an EU/EEA Member State prior to providing such services, as well as have a registered office in that state.

Further requirements target, amongst others, minimum capital, the security of the IT infrastructure, conflicts of interest, the corporate governance structure and the management board of these service providers.

It is important to note that some Member States are already quite ahead of the curve in what concerns regulating this field. Liechtenstein and Malta, alongside France, Germany and Estonia may be regarded as pioneers in the “crypto-verse”, having put in place procedures for acquiring licenses. Other countries, such as Luxembourg, whilst not having specific laws regulating cryptocurrencies yet, have developed incentives to support the growth of the crypto industry. The aforementioned Member States may decide to further ease the procedures required by MiCA, so that the existing licences be easily and rapidly “upgraded” to the standards set by the proposed regulation. By doing this, the markets therein may gain a significant advantage compared to the rest of the Member States, which would barely start to dip their toe into the swirling waters of crypto-assets.

Protecting consumers

MiCA also sets out rules to ensure consumer protection. For example, prospective buyers of crypto-assets will be informed about the associated characteristics, functions and risks via the white paper. Additionally, consumers who are buying crypto-assets, other than asset-referenced or e-money tokens, directly from the issuer or from a crypto-asset service provider, will be provided with a right of withdrawal during a limited period of time after their acquisition.

More notably, issuers of asset-referenced tokens and crypto-asset service providers need to put in place a clear procedure for handling complaints received from their clients. The latter shall be able to file such complaints free of charge and have their problems investigated in a timely and fair manner, as well as be provided with the outcome of the investigations within a reasonable period of time.

Lastly, any exclusion of civil liability will be deprived of any legal effect, this rule covering issuers of all crypto-assets.

The European Central Bank’s reaction

On 19 February 2021, the European Central Bank (“ECB”) published its opinion on the current version of the proposed regulation. Whilst being generally in favour of MiCA, the ECB advocates for a considerable number of changes and refinements in the rather hefty 42-pages document. In the following, we shall cover some of the ECB’s suggestions.

First and foremost, the ECB recommends that a clear distinction be made between its powers[6] and the responsibilities awarded to the EBA in the proposed regulation. Likewise, the EBC considers that the current MiCA proposal, which features the power to issue only non-binding opinions on applications of prospective issuers of asset-referenced tokens, is rather excessive, pointing out that the ECB, together with other non-euro national central banks, have responsibilities in conducting “oversight of clearing and payments systems as part of its [theirs] mandate”, given that “one of the basic tasks to be carried out through … [the ECB] is to ‘promote the smooth operation of payment systems”. The ECB seems to further double down on these views through another proposition, i.e., adding the following wording after some references to the EBA in the regulation’s recitals and articles, the intention here being to give non-euro central banks control rights similar to those allocated by MiCA to the EBA: “after consultation of the ECB and the relevant central banks of Member States whose currency is not the euro”.

Secondly, the ECB is against the current catch-all definition of crypto-assets, claiming that a better one should be envisaged, “in order to avoid diverging interpretations at national level on what may or may not constitute a crypto-asset under the proposed regulation, to help support the provision of crypto-asset services on a cross-border basis and to establish a truly harmonized set of rules for crypto-assets”.

Furthermore, the ECB endorses the restriction on crypto-assets that generate interest, probably due to the risks this would pose to the banking sector and to other monetary policies, e.g., should crypto-assets have interest attached, they would become more desirable and have an impact on traditional bank deposits, thus driving some people to substitute the latter for crypto-assets. Interestingly enough, the ECB is also contemplating having a central bank digital currency (“CBDC”), the so-called “digital euro” which would complement cash, rather than replace it. Still, whilst this initiative is still in very early stages[7], this type of currency would not fall under the provisions of MiCA.

A potential trojan horse

The current version of MiCA comes with both pros and cons.

On the plus side, this piece of legislation is designed as a regulation, thus being binding and directly applicable across the EU/EEA. It promotes the development of crypto-assets by having a legal framework that supports innovation and fair competition, as well as safeguards consumer’s rights and preserves market integrity. Moreover, MiCA enables European businesses to have full access to the internal market, providing legal certainty and levelling the playing field for every crypto-asset service provider.

However, the regulation is still far from perfect, having some shortcomings that need to be touched, such as the following:

► the wording of the definitions covering asset-referenced and e-money tokens is cumbersome and rather inaccurate since both of them are “referring to the value of”, inter alia, fiat currencies, without taking into consideration that some crypto-assets refer to the value of a fiat currency, but have their reserve assets consist of other fiat currencies, commodities or crypto-assets. This is the case for DAI, which refers to the value of USD (at first glance, making DAI resemble e-money tokens), but its reserve assets are issued based on Ether (which points to a characteristic specific to asset-referenced tokens);

► it is unclear how the regulation interacts with MiFID II in cases where crypto-assets include traits specific to financial instruments;

► the thresholds for whether an asset-referenced or e-money token is significant are unrealistic in the current version of the regulation, given that virtually all relevant stablecoins would easily surpass those limits and be qualified as significant crypto-assets. The consequences of this might prove to be preposterous for the issuers of such coins, since they would suddenly be obliged to observe additional requirements, g., owning capital funds of at least 3% of the average amount of the reserve assets[8];

► prohibiting interests associated with asset-referenced and e-money tokens might undermine the competitiveness of both issuers and service providers of crypto-assets located in the EU, compared to those in other jurisdictions that allow such interests;

► since only legal entities can issue crypto-assets, it is unclear how tokens generated (i) via an open blockchain network, such as Bitcoin, or (ii) through an application, such as a smart contract, may be construed;

► the regulation may have an adverse effect on the newer market players, creating significant barriers to entry into the market, inasmuch as some requirements (g., white paper, compliance costs) would hinder their development, rather than bolster it.

Codebreaking the future

MiCA is a very ambitious effort, although it is paramount that it strikes a good balance between regulatory expectations and the realities of the market. Given the current status of the proposal, along with the transition period of 18 months, there will be several years until the rules therein apply.

In the past few years, European legislators have been striving to regulate different fields of technology, one of the objectives being to bolster the competitiveness of the EU market, by attracting talent and investments, as well as by keeping them in the single market. Unfortunately, one could argue that ship has sailed in terms of AI or cloud computing, given that most of the relevant actors are located outside the EU.

Nevertheless, should the current weaknesses be dealt with accordingly, there are little reasons to believe that MiCA will not emulate the impact of the GDPR in what concerns cryptocurrencies in the EU, thus bringing the old continent into the new age as the leading watchdog in the world not only on privacy matters but also on all things crypto.

[1] Directive 2014/65/EU (the MiFID II), Regulation (EU) 2017/1129 (the Prospectus Regulation), Directive 2004/109/EC (the Transparency Directive), Regulation (EU) 909/2014 (the CSDR), Directive (EU) 2015/2366 (the Electronic Payment Directive), etc.

[2] Nevertheless, crypto-assets will not be regarded as being offered for free (i) should the purchasers be required to provide personal data to the issuer in exchange, or (ii) if the issuer receives any third-party fees, commissions, monetary or non-monetary benefits in exchange for those crypto-assets.

[3] The regulation sets out that an electronic money institution shall be authorised to also issue e-money tokens, and that these tokens will be regarded as electronic money, as defined in Directive 2009/110/EC.

[4] Authorised under Directive 2013/36/EU (the Capital Requirements Directive).

[5] Abiding all other requirements set out in the MiFID II.

[6] The ECB is the head of the Single Supervisory Mechanism, which is one of the two key pillars of the banking union.

[7] As stated in a recent blog post on the ECB’s website, the ECB is “still exploring the possibility and considering it conceptually”. For more information on this, visit https://www.ecb.europa.eu/press/blog/date/2021/html/ecb.blog210325~e22188c522.en.html.

[8] For example, as of 5 April 2021, with its reserve assets of approximately USD 43 billion, Tether would be required to own almost USD 1.3 billion of its funding. Considering the positive trend of cryptocurrencies in the past few months, this amount will only keep on rising.

An article by Diana Gavril

In the context of creating a European Digital Single Market, the European Electronic Communications Code (“EECC”) comes to modernize the European regulatory framework for electronic communications, reflecting the reality of today’s electronic communications market. EECC entered into force in December 2018 and had to be transposed by the Member States until 21 December 2020 into national law. Romania failed to meet the deadline and has not yet transposed the EECC.

EECC’s main objectives include (i) promoting connectivity and investment in very high-speed, high-capacity networks, such as optical fiber and 5G; (ii) enhancing consumer’s protection and updating the rules on universal service; (iii) ensuring higher standards of communication services.

1.What about ECS? What are ICS?

One of the key changes of EECC is the introduction of an expansive definition of electronic communication services (“ECS”), which includes the following types of services: (a) Internet access services; (b) interpersonal communications services (“ICS”) and (c) conveyance of signals. The novelty here is the inclusion of ICS within the scope of ECS. ICS means a service normally provided for remuneration that enables the direct interpersonal and interactive exchange of information via electronic communications networks between a finite number of persons, whereby the persons initiating or participating in the communication determine its recipient(s) and does not include services which enable interpersonal and interactive communication merely as a minor ancillary feature that is intrinsically linked to another service[1].

According to the above definition of ICS, two aspects are important to be emphasized:

▶ the requirement for ECS, and implicitly ICS, to be normally provided for remuneration remains part of the definition; however, EECC expressly provides for a broad interpretation of such requirement – the concept of remuneration should include situations where:

▸the provider of service requests and the end-user provides personal data directly or indirectly to the provider;

▸the end-user allows access to information without actively supplying it, such as personal data or other automatically generated information;

▸the end-user is exposed to ads as a condition for gaining access to the service, or the service provider monetizes personal data it has lawfully collected;

▶ if the communication element of a service is a minor ancillary feature intrinsically linked to another service, then such an element does not fall under the scope of ICS (g. a chat feature which is part of a video game).

ICS are further subdivided into number-based and number-independent services, depending on whether the service connects with or enables communications with publicly assigned numbering resources. Thus, VoIP, emails, SMS, MMS are now services which should be provided taking into account the EECC rules, given that they would fall under the scope of ICS. It is also important to mention that although EECC seems to provide for lighter regulation of number-independent ICS compared to number-based ICS, many of the core regulatory requirements will apply to both types of ICS.

As we may see, the EECC, compared with the former telecom framework, adopts a more functional understanding of ECS and does not define such services merely based on technical features – the conveyance of signals. In this context, EECC intends to level the playing field and extends the rules to providers that were not previously subject to ECS rules, such as over-the-top (OTT) players, which are generally providers of services over the Internet.

2. Conclusion

EECC accurately reflects the fast growth of communications over the Internet. Given the inclusion of ICS within the definition of ECS, more and more Internet-based service provides, including OTT service provides, which were, until now, outside the scope of the regulatory regime, have to understand and comply with the new set of rules on electronic communications.

As mentioned above, EECC has not yet been transposed by Romania. However, there is currently a draft under debate, which is generally in line with the EECC and largely transposes all its provisions.

The implementation draft amends and supplements the regulations in the field of electronic communications, mainly the Government Emergency Ordinance no. 111/2011 on electronic communications and aims to establish measures to facilitate the development of electronic communications networks.

The critical changes brought by the transposition of the EECC into national legislation concern: (i) redefining ECS in regard to ICS, (ii) the general authorization regime, (iii) the limited resources regime (radio frequency spectrum, numbering resources ), (iv) the security of electronic communications networks and services, (v) portability and transfer to another Internet service provider, (vi) end-user rights, (vii) termination fees, (viii) facilitating the development of electronic communications networks, (ix) the “My ANCOM” service.

Nevertheless, it remains to be seen whether this piece of legislation will suffer additional changes until its official publication and entry into force. Depending on how each member state transposes the EECC, including Romania, each entity providing an ECS may need to notify the relevant Member State regulatory entity, ANCOM in our jurisdiction, in order to receive a general authorization to lawfully provide such services within that Member State.

 

[1] Article 2 (5) of DIRECTIVE (EU) 2018/1972 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 11 December 2018 establishing the European Electronic Communications Code (EECC).

An article by Vladimir Griga

The 2018 Audio Visual Services Directive[1] (the “AVMS Directive” or the “Directive”) has brought important changes, especially for broadcasters and on-demand service providers. The deadline for transposing the Directive, set for September 19^th, 2020, has passed with only four Member States successfully implementing the provisions on time (i.e. Denmark, Hungary, the Netherlands and Sweden). This failure has prompted the Commission to launch the infringement procedures against the other 23 Members States and the UK. On November 23^rd, 2020, the Commission has sent letters of formal notice to the respective Members States, who now have two months to provide the Commission further information.

In Romania, the Ministry of Culture has submitted a draft law for public consultation in April last year, which was withdrawn shortly after, due to the stark criticism received online from the public. Since then, there have not been any new developments in this regard, despite the transposition deadline being exceeded.

In the following, we shall cover the main amendments of the AVMS Directive, which we believe will reshape the media landscape in 2021.

Services that fall under the Directive

Besides the addition of video-sharing platforms, the general scope of the AVMS Directive remains mostly unchanged. Audiovisual media services continue to be defined in the Directive, covering both linear (television broadcasts) and non-linear (on-demand) services.

Nevertheless, the Directive now outlines that a catalogue of programmes incorporated in a distinct service may also be classified as an audiovisual media service. This change is not surprising, considering the previous judgement of the CJEU[2], where the Court ruled that a catalogue of videos displayed on a newspaper publisher’s website (e.g. short videos consisting of local news bulletins, sports and entertainment clips) may also be subject to the provisions of the AVMS Directive, as long as the other requirements are also observed. Another important change is the removal from the definition of “programme” of the requirement that programmes need to be comparable to the form and content of television broadcasting.

These changes will inevitably expand the scope of the Directive to new services (e.g. channels with video content on social media or pages featuring video catalogues). At the same time, such an extension in scope would appear to have been already toned down by the CJEU’s recent judgement[3], where the Court ruled that the AVMS Directive may not cover a channel featuring promotional audiovisual content (e.g. a YouTube channel). Therefore not every video service provider will be subject to these provisions. However, the merits of the aforementioned case were analysed by the Court prior to the publication of the final draft of the 2018 AVMS Directive and to its subsequent transposition by the Member States (which is yet to be completed). Whilst the conclusions on whether such a video constitutes an audiovisual media service should remain applicable under the new Directive, not the same can be said about the audiovisual commercial communication, which now refers to user-generated videos as well, in addition to programmes. Time will tell how these issues will be construed by the Court in future cases.

Video-sharing platforms

Probably the most important addition of the AVMS Directive is the inclusion of online video-sharing platforms in the scope of the Directive. Simply speaking, these platforms allow users to share video content without any operator having an editorial control or responsibility over the respective content. From now on, video sharing platforms will be required to introduce suitable measures to protect minors from harmful content and defend all audiences against incitement to hatred or violence.

The new requirements also target the advertisement that takes place on these platforms, which previously were not subject to the AVMS Directive. Hence, all providers will need to comply with the provisions set out in the Directive regarding the advertising content shown on their video sharing platforms. What’s more, they will also have to take proper measures in order to make sure that users comply with these requirements as well. The ambitious scope of the Directive also stems from the detailed manner in which the video-sharing platforms have been regulated, the regulation providing for no less than ten instruments that the platforms could use to meet the new requirements, e.g. adding certain clauses in the terms and conditions of service that specifically aim to protect the minors and the general public; enabling users to declare whether commercial content exists in the clips they post; age verification; allowing users to rate the video content; parental control, amongst many others.

Although at first glance, these requirements may seem burdensome for the video-sharing platforms, it is important to note that most of them have already implemented appropriate measures, as laid down in the Directive. That being said, the key takeaway here is that the providers of such services will be subject to the media regulator, as well as be obligated to register as a video sharing platform. On top of that, the AVMS Directive will be applicable to the video-sharing platform providers even if they are located outside the EU, should another legal entity from their corporate group be located within the EU.

Different points of view, same confines

The country-of-origin principle is still present in the AVMS Directive; therefore, there is a very low risk of conflict of jurisdiction between the Member States. The criteria for determining the jurisdiction are largely the same, i.e. the location where the media service provider has its head office, as well as the place where the editorial decisions about the service are taken. In case these locations are set in the different Member States or in a third country, other criteria shall be considered, such as the location of a significant part of the service provider’s workforce.

Notedly, the Directive now clearly defines the meaning of both “editorial decision” and “significant part of the workforce”. The former is a decision taken on a regular basis in order to exercise editorial responsibility and which is related to the everyday operation of the media service, whilst the latter pertains to the staff which is engaged in services concerning the programme.

Other important additions

Another novelty that the AVMS Directive brings relates to the financial contributions for the production of European works. Member States may now oblige media providers to make such financial contributions, should the providers’ service be addressed to the respective national audiences. The initial intention was for this to apply only to on-demand service providers, although now it seems to encompass most audiovisual media service providers. Nonetheless, it is worthwhile to note that these requirements are not applicable to non-EU service providers, nor to video platform providers, irrespective of where their head offices are.

On the topic of European works, the Directive introduces more stringent requirements regarding the promotion of such works for on-demand service providers. These providers must ensure that at least 30% of the catalogues on their platforms comprise actual European content. The Directive gives some examples of how to do this: using European works in advertising campaigns, emphasising them in banners or having a distinct catalogue for European works which is available on the main page.

Moving on to advertising, the AVMS Directive specifies that the amount of television commercial and teleshopping spots, broadcasted between 6.00 and 18.00, and between 18.00 and 24.00, cannot exceed 20% of the total broadcasting time in the respective time frame. This will definitely benefit broadcasters since now they can schedule their advertising more freely[4]. Furthermore, product placement is now generally allowed, with the exception of programmes covering news, current affairs, consumer affairs, or of programmes targeting religion and children[5].

Lastly, the new Directive aims to strengthen the cooperation between the national audiovisual authorities, by consolidating the European Regulatory Group for Audiovisual Media Services (ERGA) and clarifying its prerogatives in the regulation[6].

“Closing credits”

The AVMS Directive, as showcased above, represents a crucial milestone in the EU audiovisual landscape. Although having yet to be transposed by most of the Member States (including Romania), the AVMS Directive is of paramount importance to virtually (pun intended) all stakeholders, ranging from TV broadcasters, on-demand service providers and social media platforms, to the end consumer. This is why we believe that the AVMS Directive is one of the new EU regulations that shall profoundly impact the European digital market in 2021.

 

[1] The Directive (EU) 2018/1808 amending Directive 2010/13/EU on the coordination of certain provisions laid down by law, regulation or administrative action in the Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive) in view of changing market realities (“AVMSD”).

[2] CJEU, Case C-347/14, New Media Online GmbH v Bundeskommunikationssenat, October 21^st, 2015.

[3] CJEU, Case C-132/17, Peugeot Deutschland GmbH v Deutsche Umwelthilfe eV, February 21^st, 2018. In a nutshell, the defendant (Peugeot Deutschland GmbH) posted a short video on YouTube, advertising a new vehicle. The claimant then filed a lawsuit against Peugeot, claiming that it failed to provide information regarding the official fuel consumption and CO² emissions of the said vehicle, thus infringing the German laws. The matter was eventually brought before the CJEU, which concluded that neither a video channel on which users can view short promotional videos for new cars nor a single such video by itself, can be regarded as being an audiovisual media service or audiovisual commercial communication. Simply put, the AVMS Directive did not apply in this case.

[4] Under the previous version of the Directive, the 20% limit applied to TV advertising and teleshopping spots per clock hour, i.e. 12 minutes per hour, whilst now it covers a much broader spectrum, resulting in either 144 minutes or 72 minutes of advertising, based on the specific time frame. Thus, a broadcaster may now use the entire hour of transmission without running any commercials, since they may be carried forward in the following broadcasts.

[5] Similarly, the former Directive expressly prohibited product placement, with only a few exceptions. The new Directive makes a rather odd U-turn and now gives a green-light to product placement, leaving out some of the more sensitive types of programmes.

[6] ERGA was first established by the Commission on February 3^rd, 2014.