The judgment will come as a reminder to online newspapers that they are not completely exempt from the AVMS Directive, and has the potential for further reaching implications on the regulation of online video content more generally.
New Media Online GmbH operates the Tiroler Tageszeitung website - a newspaper website containing text-based news reporting, as well as video content ranging in length from a few seconds to a few minutes (including edited reports on various subjects such as local news and events, vox-pop interviews on current affairs, sports events, film trailers, etc). In a separate section of the website, around 300 of these videos were collected in one place.
On 9th October 2014, the Austrian telecommunications regulator determined that this was an on-demand audiovisual media service for the purposes of the AVMS Directive, and was therefore covered by reporting obligations under Austrian law. New Media Online appealed the determination, and the matter ended up being heard by the Austrian Supreme Administrative Court, the 'Verwaltungsgerichthof'.
Article 1(1)(a) of the AVMS Directive defines an "audiovisual media service" as a service (in the nature of economic activity) which is under the editorial responsibility of a media service provider and the principal purpose of which is the provision of programmes, in order to inform, educate, or entertain, to the general public by electronic communications networks. Article 1(1)(b) defines a "programme" as a set of moving images with or without sound, constituting an individual item within a schedule or catalogue established by a media service provider, the form and content of which are comparable to the form and content of television broadcasting. (Emphasis added).
On 18th July 2014, the Austrian national court referred two questions to the European Court of Justice – essentially:
- Can the service be considered as being comparable with television broadcasting (in terms of form and content) if the content of the services is also of the type offered in television broadcasting and are intended for reception by a significant proportion of the general public.
- Can the assessment of the principal purpose of a service offered in the electronic version of a newspaper be based on a subsection of a website (providing a collection of mainly short videos which in other sections of the website are used to supplement text articles)?
Opinion of the Advocate General:
Advocate General Szpunar delivered his statement to the CJEU on 1st July this year, opining that the case actually concerns much wider issues that those referred by the national court and that, given that this is the first time the CJEU has had the opportunity to rule on the interpretation of the concept of audiovisual media services, a more general approach should therefore be taken as follows.
It is becoming increasingly difficult to find any internet site which does not offer audiovisual elements to some extent associated with the other content of the site, whether forming an integral part with the written word, or segregated into separate areas of the site. The question must therefore arise as to where to draw the line when it comes to defining the scope of the audiovisual media services definition. The different approaches currently taken by national regulators are – according to the Attorney General – contrary to the requirement to apply the directive uniformly. This is something that legal practitioners in this subject area will already have noticed.
The legislative intent behind the AVMS Directive was to ensure that competition between similar types of economic activity that have the distribution of programming at their core remains undistorted. A broad interpretation of audiovisual media service would extend the scope of the rules applicable to linear and on-demand television beyond this sphere, to services that do not directly compete with broadcasting. The Attorney General argued that "excessively broad regulation might render the directive ineffective" as national regulators simply do not have the resources to monitor and enforce the rules against websites more generally.
The Advocate General contends that the decision of the Austrian regulatory authority turns on whether the provision of audiovisual media is provided separately to or as part of other elements of the service, and therefore depends on the technical architecture of the service in question. Given the huge spectrum of possible technical setups, and that this directive was intended to be technology agnostic and future-proof (as much as any legislation can be), the scope of the definition ought to be determined by the nature of the service, rather than the architecture of the technology involved.
The Attorney General went on to give his formal opinion that the application of the AVMS Directive will require an assessment of the character of the particular services for the purposes of classification, and that no precision of language in legislation will replace that assessment. In the case of New Media Online, his view was that the services did not fall within the scope of the definition.
Judgment of the Court of Justice of the European Union (CJEU):
On 21 October 2015, the CJEU delivered its judgment on this matter. In doing so, the CJEU chose to respond on the specific questions raised by the Austrian national court and not issue broader guidance on the interpretation of the AVMS Directive as suggested by the Attorney General. That said, certain elements of similarity can be drawn between the two approaches.
In its response to the first question, the CJEU concluded that the definition of a 'programme' under Article 1(1)(b) of the AVMS Directive must be interpreted as including, under the subdomain of a newspaper website, the provision of short videos of local news bulletins, sports and entertainment clips. In doing so the CJEU took into account that short videos of local news, cultural or sporting events or recreational reports compete with regional radio broadcasters, music channels, sports channels and entertainment programmes.
It also held that the definition requires that videos can be compared to the form and content of television broadcasting, not that a compilation of videos can be compared with the schedule established by a television producer. The fact that the videos are short does not rule them out of the definition of a programme.
In respect to the second question, the CJEU found that it was irrelevant whether the videos were contained within the principal domain of the broader news site or in a separate sub-domain of that site. In other words, it agreed with the Attorney General that the precise architecture of the service should not be determinative when applying the AVMS Directive definitions. The principal purpose must instead be assessed by considering whether the videos are independent from the journalistic activity of the site – where the audiovisual elements within the site are incidental and serve only to complement the provision of written press articles, the principal purpose will not be the provision of programmes. The CJEU also highlighted in particular that the principal purpose test does not depend on whether the website (taken as a whole) is related to the principal activity of the site operator, or is ancillary to it.
While the CJEU stated that it was for the referring court to determine whether the case in hand met the principal purpose test, it suggested that, as there were few articles linked to video clips and the majority of the videos could be watched independently from the articles, the service was of the sort which was independent of journalistic activity.
For newspapers, the CJEU's judgment is pretty clear. Where video content is included on a newspaper's website, they must be primarily linked and relevant to the text-based journalistic content in order to fall outside the principal purpose test and hence the AVMS Directive. It does not matter how the video content is organised (whether imbedded within articles or collated on a separate sub-domain) or whether the videos are part of a wider news service. This strikes us as a sensible approach, in that the AVMS Directive should not be capable of circumvention merely by the service architecture and the way content is presented.
It is also interesting to compare the CJEU's judgment on the principal purpose test with an earlier decision of Ofcom in the Sun Video case (http://www.fieldfisher.com/publications/2012/02/regulation-of-video-on-demand-services-following-the-sun-video-appeal). In that case, Ofcom found in favour of the Sun (as there was significant linking between the videos and the articles) and also laid out some examples of characteristics of a service which did meet the principal purpose test. These included the length of the content, whether the service was styled like a television channel and whether the videos were catalogued on a separate section. Interestingly, these examples don't chime well with the CJEU's recent judgment, so we might expect to see some recasting by Ofcom and any other EU regulators who have taken a similar view.
Looking at the judgment in a wider context, it suggests the beginnings of a move to a broader interpretation for the definition of 'programme' and a widening of the scope of the AVMS Directive. If short videos of local news, cultural or sporting events or recreational reports can compete with traditional television broadcast (albeit in the context of reportage), what is to prevent a similar interpretation being applied to (for example) vbloggers who upload video content to YouTube on current events? As the Attorney General suggests, such an expansive approach is likely to be detrimental to the effectiveness of the AVMS Directive and would be a move away from the underlying intent of the AVMS Directive – to regulate TV-like services.
Whether this case will be limited to its facts remains to be seen, but don't be surprised if we see more of these sorts of cases coming before the courts in the future.