Controversial EU video rules may cause glitches for US tech giants

Facebook, Netflix, YouTube and the German state broadcaster ZDF are very different businesses. But they may soon all have to abide by the same rule book.

A controversial overhaul of the EU’s rules on video content will sprawl across sectors, dragging everyone from public broadcasters to social media into the same regulatory framework, according to draft proposals being negotiated.

For supporters of the move, the law would end a regulatory no man’s land for the likes of YouTube and Facebook, obliging them to follow the same rules as normal broadcasters on issues such as hate speech.

Critics argue that it is a misguided attempt to rope internet companies into inappropriate rules – potentially throwing media diversity and even freedom of speech into doubt.

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Internet streaming services such as Netflix, which are already regulated as video providers, will be affected by new rules that dictate that 30 per cent of content on the platforms needs to be European.

"Quotas are frustrating for us because there is no real evidence to show that they work," said Colin Bortner, Netflix's director of global public policy. "[They] divert investment away from high-quality European films and series that can attract a global audience."

Levies

The company also faces paying levies of up to 26 per cent of revenues on its business in France, which it says will decrease the amount it invests in individual European works and distort how much it invests in individual member countries.

Mr Bortner says the proposed rate “is fantastically high”, saying that it would mean consumers in one market subsidising those in another. “Ultimately, Spanish consumers would be paying a higher price to meet our levy obligations in France. That’s because we don’t have 28 individual businesses; we are producing content on a pan-European and global basis and what happens in one member state impacts investments and prices in another.”

Technology companies that offer video such as Facebook, YouTube and Amazon are also facing an overhaul.

All three companies declined to comment.

Last-minute change

But a last-minute change to draft version being worked on by ministers means that for a platform that uses video content as an “essential” part of the service must abide by rules laid down in the EU’s audiovisual media services directive.

“It used to be a directive for sector-specific issue,” says one diplomat who opposed the measure. “It will now police any moving picture on any screen.”

The consequences for the world's biggest technology companies that have put video at the heart of their business strategies – including Google, which owns YouTube, Facebook and Amazon – are likely to be significant.

For the first time, the businesses would be legally obliged to come up with measures to ferret out videos that contain hate speech, incitement to terrorism or simply harm the “moral development” of children.

John Carr, an adviser to the UK government on online child safety, says: "Social media platforms – especially Facebook – must be feeling under siege at the moment. [This directive] is just another trebuchet."

YouTube and Facebook already have some measures in place. Users on established services can flag content as inappropriate, while security services have heaped pressure on social networks to do more to combat use by terrorist groups.

Facebook’s own, detailed guidelines on moderating content that ranged from self-harm to Nazi imagery were revealed last week. The measures are generally undertaken on a voluntary basis but these groups now face strict legal obligations – and potential sanctions if they are deemed to be not doing enough.

Take more responsibility

Because the new rule is a directive, individual countries will have to transpose it into national law, leaving scope for countries who want the big platforms to take more responsibility – such as France, Germany and Italy – to introduce stricter rules and sanctions.

A minister in Germany, for instance, has already mooted fines of €50 million if a social network fails to take down hate speech. France is considering applying a European content quota of 50 per cent for all video services.

“The country-of-origin principle is definitely under threat. The EU is moving in a different direction,” says Mr Bortner.

Critics argue that the new rules could encourage self-censorship. "You defend yourself with excessively broad terms of service that allow you to delete whatever you want whenever you need it," said Joe McNamee, executive director of EDRI, a group that promotes digital rights.

This leaves internet companies as judge, jury and executioner when it comes to determining whether content is appropriate. “You are outsourcing your law enforcement to private actors,” says one EU diplomat.

– (Copyright The Financial Times Limited 2017)