Explanatory Memorandum to COM(2010)755 - Conclusion of the European Convention on the legal protection of services based on, or consisting of, conditional access

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1. On 20 November 1998, the Council and the European Parliament adopted Directive 98/84/EC on the legal protection of services based on, or consisting of, conditional access i.

2. This Directive created a common EU legal framework for combating illicit devices which allow unauthorised access to television services offered against payment and for the effective protection of such services. This protection covers both television and radio broadcasting services and transmission by internet.

3. The primary objective of this Directive was to provide legal protection to all services for which payment depends on conditional access , i.e. access to the protected service is made conditional upon prior individual authorisation i. More specifically, this protection consists of declaring unlawful all commercial activity relating to equipment which allows or facilitates access to services without authorisation or payment to the provider, and establishing sanctions.

4. The services are thus legally offered by providers by means of a conditional access device , in other words equipment or software designed or adapted to give access to a protected service in an intelligible form i. Conversely, an illicit device refers to any equipment or software designed or adapted to give access to a protected service in an intelligible form without the authorisation of the service provider i.

5. The Directive defines the unlawful activities linked to illicit devices in this context. These relate primarily to their manufacture, import, distribution, sale, rental or possession and, secondly to their installation, maintenance or replacement. Lastly, the use of commercial communications to promote hacking devices is also declared to constitute an unlawful activity. It should be noted that only the above-mentioned activities carried out in a commercial context are declared to be unlawful.

6. The sanctions imposed for an unlawful activity are left entirely to the discretion of the Member States, which must respect the general principles of Community law. They must therefore be 'effective, dissuasive and proportionate' i to the infringements committed.

7. Furthermore, the Member States must allow all providers of services based on, or consisting of, conditional access appropriate remedies to stop an unlawful threat to their activity (by means of injunctions for instance) and to obtain compensation for any prejudice suffered due to an unlawful activity.

8. In 1999, the Council of Europe started to draft a European convention on the legal protection of services based on, or consisting of, conditional access.

9. Extensive, effective protection for services based on, or consisting of, conditional access appeared to be particularly necessary. In fact, may European states which are not members of the European Union may provide havens to the development or distribution of devices for hacking into conditional access services if their legal system does not provide for sanctions against this very specific hacking activity. It was therefore necessary to extend the provisions of Directive 98/84/EC and to create a common and effective framework at European level for the protection of these services.

10. The Council therefore authorised the Commission by Decision of 22 June 1996 i to represent the European Community in the negotiations on the Convention.

11. The negotiation instructions to the Commission were intended to ensure that the European Convention included definitions and measures which matched those of Directive 98/84/EC, and that there would be maximum compatibility between the two legal instruments.

12. The negotiations were successful and the Convention, adopted on 24 January 2001, is fully compatible with Directive 98/84/EC.

13. Indeed, the Convention mainly takes over the provisions of Directive 98/84/EC, thereby protecting systems based on, or consisting of, conditional access from the unlawful activities listed in Directive 98/84/EC.

14. The wording of the two texts differs slightly in places. For instance, the Convention not only defines as a criminal offence the manufacture of illicit devices but also their production. It also gives a clearer definition of the sanctions established for activities defined as unlawful, since it describes them as penal, administrative or other. However, as in Directive 98/84/EC, the sanctions must be proportionate, dissuasive and effective. In short, the different wording of the Convention of the Council of Europe by no means differs in terms of content or scope from the Community Directive.

15. The Convention is open for participation by the European Union. Furthermore, Article 11 i explicitly provides that, in their mutual relations, Parties which are members of the European Community shall apply Community rules and shall therefore not apply the rules arising from the Convention unless there is no Community rule governing the particular subject concerned. This disconnection clause in favour of the Member States of the European Union ensures the primacy of EU rules.

16. In its second evaluation report on Directive 98/84/EC adopted on 30 September 2008 i, the Commission indicated that the signing of the Convention by the European Union should encourage broader ratification by the Member States of the Council of Europe and thus make it possible to extend legal protection for services based on conditional access beyond the borders of the EU.

17. The European Convention on the legal protection of services based on, or consisting of, conditional access was signed on behalf of the European Union on (…), subject to a possible conclusion at a later date.

18. Consequently, the Commission recommends that the Council conclude this convention, as it will make it possible to extend the scope of the legal framework established by Directive 98/84/EC and thus make it possible to effectively combat threats to protected services.