On 27 November 2020, the House of Lords is due to debate a motion to approve the draft Audiovisual Media Services (Amendment) (EU Exit) Regulations 2020. The instrument relates to the way in which audiovisual media services—such as on-demand programme services (eg Netflix) and video-sharing platforms (eg YouTube and Facebook)—would be regulated in the UK after the end of the Brexit transition period.
The instrument was laid before Parliament on 15 October 2020. It was laid under the “draft affirmative” procedure, meaning that it must be approved by both Houses before it can come into force. If approved, the instrument would enter into force “immediately before” the transition period (or “implementation period”) completion day on 31 December 2020. Regulation 4 would enter into force on implementation period completion day.
Background
The regulations’ explanatory memorandum, produced by the Department for Digital, Culture, Media and Sport, sets out the background to the instrument.
UK law regulating audiovisual media services (AVMS) is currently underpinned by EU law. The Communications Act 2003 transposed the revised EU audiovisual media services directive (2010/13), which provided for the internal market in broadcasting services by ensuring freedom to provide services throughout the EU.
A revised directive (2018/1808) sought to provide a level playing field between traditional broadcasters and a range of new services, such as on-demand programme services (ODPS), eg Netflix, and video-sharing platforms (VSPs), eg YouTube, Facebook, Instagram and TikTok.
The directive included provisions which regulated audiovisual content in order to protect minors and to combat issues such as hate speech and provocation to commit terrorist offences. Responsibility for administering the requirements lies with member states’ national regulator, which in the UK’s case is Ofcom.
The AVMS directive contained provisions governing the determination of jurisdiction, in order to decide which EU member state has regulatory responsibility. The directive sets out a procedure for deciding whether a VSP’s parent company, subsidiary or group undertaking is ‘established’ and economically active in a member state. If member states cannot agree on the determination, it must be brought to the attention of the European Commission.
The revised AVMS directive was transposed into UK law by the Audiovisual Media Services Regulations 2020, the majority of which entered into force on 1 November 2020. The provisions on VSPs were contained in a new part 4B which was inserted into the Communications Act 2003. Between November and December 2020, EU rules on determining the jurisdiction of VSPs will continue to be in operation in the UK. Each EU member state and the UK will be responsible for regulating only those VSPs which fall within its jurisdiction. After the end of the transition period, the UK will be a third country and those principles will not apply.
Online harms regime
The regulations’ explanatory memorandum refers to the Government’s ‘online harms regime’, which relates to its intention to introduce an online harms bill. In April 2019, Theresa May’s Government published an Online Harms White Paper, which proposed a new regime of online regulation to combat issues such as child sexual exploitation, hate speech, terrorist offences, online crime, and online bullying and harassment. In February 2020, the Government announced that it was minded to give Ofcom responsibility for administering the future online harms regime. However, the proposed bill has not yet been published.
The regulations’ explanatory memorandum states that as part of the online harms regime, Ofcom will be responsible for regulating “any in-scope service provided to UK users irrespective of where that service is based”. However, until that regime is implemented the current regulations would apply the pre-transition approach to determining the regulatory remit for a given VSP.
After the transition period, Ofcom will have jurisdiction over a VSP which has its primary establishment in the UK. However, if a VSP is primarily established in an EU or European Economic Area (EEA) state and has a subsidiary in the UK, Ofcom will not have jurisdiction. The explanatory memorandum states:
If this approach was not followed, this would put a duty on Ofcom to regulate larger social media platforms such as Facebook by virtue of it being established in Ireland but having a subsidiary in the UK. This would in effect mean that Ofcom spent resources and incurred costs of duplicating the efforts of other EEA regulators, to little effect.
Where a VSP is not primarily established in the UK or another EEA state, but has subsidiaries in the UK and another EEA state, Ofcom will not have jurisdiction and “will rely on that EEA state” to regulate the VSP.
For VSPs such as TikTok, which is established in China but has multiple subsidiaries across the EU, the memorandum states “there may be a period of time before its European regulator is decided upon definitively—in the meantime there will be a gap in regulation”.
What does the instrument do?
The regulations have been made under section 8 of the European Union (Withdrawal) Act 2018. The purpose of the regulations is to address deficiencies in the operation of part 4B of the Communications Act 2003 which would arise at the end of the transition period.
The explanatory memorandum states that, in order to ensure the law is operable at the end of the transition period, “two types of fixes” are required: “jurisdictional fixes and technical fixes”. The regulations are intended to fix the jurisdictional issues only. The memorandum states that “a second statutory instrument, which will be laid in the coming months using the negative procedure, will address less urgent and more minor technical fixes”.
Currently, the cross-references in the AVMS Regulations 2020 to the jurisdiction provisions in the AVMS directive will not apply at the end of the transition period. The current regulations provide that, after the transition period, Ofcom will have jurisdiction for those VSPs primarily established in the UK. The explanatory memorandum states that, without this instrument, after the transition period “Ofcom would not regulate any VSPs”.
The regulations also amend the Broadcasting (Amendment) (EU Exit) Regulations 2019. Those regulations were introduced in case of a ‘no deal’ exit from the EU. The current regulations amend references to ‘exit day’ in the 2019 regulations to “implementation period (IP) completion day”.
What scrutiny has the instrument received?
The House of Lords Secondary Legislation Scrutiny Committee reported on the regulations on 29 October 2020 and noted them as an instrument of interest. The committee raised concerns about the “regulatory gap” which would occur in Ofcom’s remit to regulate VSPs between the end of the transition period and the passing of an online harms bill. The committee noted that during that period, the UK would have to rely on “informal co-operation” with regulators in the EU. The committee also questioned how UK users would be protected from harmful online content from VSPs outside Europe, such as in the US.
The committee noted that it had asked the Department for Digital, Culture, Media and Sport for an update on when the online harms bill was expected. The department had responded that draft legislation would be ready “early in 2021”. The committee said that it was important that the Government adhered to that timetable “so that the current regulatory gap, which leaves UK users potentially exposed to online harm, can be closed”.
On 4 November 2020, the Joint Committee on Statutory Instruments reported on the instrument, but did not raise any concerns.
The regulations were debated by a House of Commons Delegated Legislation Committee on 17 November 2020. Introducing the instrument, the Minister for Media and Data, John Whittingdale, said that its purpose was to “maintain but not expand” Ofcom’s remit to regulate VSPs and to “ensure that the law remains operable” after the transition period.
The Labour Party said it did not intend to oppose the regulations. However, Chi Onwurah, Shadow Minister for Digital, Culture, Media and Sport, raised several concerns with the Government’s approach to VSP regulation. She said that the instrument’s “seemingly narrow fix has wide implications and major deficiencies”. She criticised the Government’s Brexit preparations in this area, saying that the current situation “fails to retain, or regain, British regulatory sovereignty”. She criticised the regulations as an “incomplete plug to address a policy vacuum on VSP regulation”.
John Whittingdale said that the regulations were a “stopgap” intended to ensure that “the European standard of regulation continues after the transition period”. He also reiterated the Government’s position that the online harms bill would be published “in early 2021”.
The House of Commons formally approved the regulations on 18 November 2020.
Cover image by Sarah Kurfeß on Unsplash (original image has been cropped).