European VOD Coalition position on the Digital Services Act

The European VOD Coalition is a company-led coalition, which brings together video-on-demand (VOD) and digital entertainment companies that share common values and invest in as well as distribute audiovisual content in Europe as their core commercial activities. Our members are CHILI, ContentScope, Discovery, FilmDoo, Nordic Entertainment Group AB, Netflix, Pickbox, Sky, TVN, Universciné Belgium, and ViacomCBS. Our mission is to inform audiences, policy makers and regulators about the importance of European VOD and digital entertainment services and to advocate on policy issues that help stimulate innovation and creativity.

As the European VOD Coalition we welcome the Digital Services Act (“DSA”) Package and the European Commission’s ongoing consultation and wish to underline the critical importance that it has for us. Our views can be summed up as: (1) the core principles of the eCommerce Directive must be maintained to safeguard our ability to meaningfully address piracy, ensuring that  consumers can continue to access a wide range of audiovisual content online, legally  at an affordable price point; (2) the distinction between closed curated professionally produced content environments and, for example, open systems serving user-generated content (UGC) must be acknowledged. Any definition of gatekeepers or systemic "platforms" must be narrow enough not to capture every business with a digital component and must be carried out with evidence-based analysis to avoid harming well-functioning ecosystems.

I. There would be no video-on-demand industry without workable online enforcement of copyright

VOD and online entertainment services have invested heavily in providing consumers with film and series online legally at an affordable price. Mass online piracy poses real risk to our business. Countless independent studies, including the most recent EUIPO “Trends in Trade in Counterfeit and Pirated Goods” also evidence this.

In the digital era, it is more essential than ever that we have an effective and balanced framework of legal tools available to protect our content. The eCommerce Directive, together with a host of other EU and national legal instruments, as developed through CJEU case law, provides this critical framework. We heavily rely and make good use of this in our content protection efforts. We support intermediaries taking responsibility for infringement committed by third parties on their services and wish to see this reinforced.

We would be concerned by any proposals that would lead to broader safe harbours and fewer responsibilities for intermediaries than we currently have. Responsibility and liability should be strengthened to allow the online ecosystem to evolve in a positive manner. As an overview, we would ask that the Commission adopts a “per problem” approach to this consultation. That is, that any new targeted obligations for intermediaries would build upon and clarify the fundamental structure set out in the eCommerce framework. The current framework does not need to be dismantled, but instead built upon and upgraded to capture the wider scope of services and issues that the Commission now wants to address.

There are a number of key points that we wanted to highlight here:

• The current distinction between passive and active platforms is critical and works well. It lies at the heart of the success of the content protection tools that we have. It has afforded CJEU case law the ability and scope to impressively and flexibly adapt to the  changing online landscape.
• There are certain specific obligations that would now be useful to introduce to the current liability regime, including the obligation to “know your business customer”. One major hurdle in our content protection efforts is identifying those behind seriously infringing pirate services, even in cases where those pirate services are paying legitimate intermediaries tens of millions of euros.
• A targeted “per problem” approach to notice and action is important, calibrating and distinguishing between the best measures to deal with different types of problematic content, including (a) infringing copyright (b) harmful and (c) terrorist. This approach should strengthen what is already common practice and build on tools that already often exist and can lead to near instantaneous action.

II. Beware of generalisations in the context of the online economy

Nearly all businesses in the economy rely on the internet to interact with their customers but not all businesses have the market characteristics of gatekeeping platforms. These platforms are characterized by a matchmaking function by which they connect two or more distinct groups of customers (e.g. merchant and consumer, social network and advertiser). This dynamic creates network effects, where the value of the platform to one group increases as the total number of users in one of the other groups increases.

VOD services fundamentally differ from those platforms. VOD Services are single-sided service providers of curated video content and channels. Like a traditional television network, our members’ have strict editorial control through the licensing and acquisition of the content they offer. VOD services acquire, curate, and package a catalogue of content that is offered to our customers.

In addition, VOD services fall within the scope of application of the Audiovisual Media Services Directive (AVMSD), which creates a thoroughly regulated framework including rules on protection of minors, accessibility for elderly and persons with disabilities, European content quotas and financial investment obligations for European content.

In this light, the notion of what constitutes a systemic platform must be clearly defined and should be limited to the “gatekeeping” platforms that, as a result of their business model, have an outsized role and financial incentive in enabling or limiting one group of users to interact with another group of users; and a unique position to facilitate and/or limit online piracy. As the DSA Package aims to scrutinize, such companies must be defined on the basis of clear characteristics and evidence that point to these very specific dynamics.

Therefore, we urge against the adoption of “one size fits all rules”. Our members call for any definitions introduced to be sufficiently clear that they would not harm sectors where there already exists a competitive market and a robust regulatory framework, and more importantly, where network effects do not limit competition and new entrants.