Netflix meeting with VP for EMEA Public Policy, Madeleine de Cock Buning
Ref. Ares(2021)1122689 - 09/02/2021
23/06/2020
On cultural and creative sector and EU support
EU policies as regards platforms like Netflix
Subtopic 1 –
Digital services Act Package – Updated regulatory framework
for online platforms
LTT
Digital Services Act
The Commission welcomes the debate on the regulatory framework for digital
services, which has been prompted by President von der Leyen’s
announcement in her political guidelines of a
new Digital Services Act
package. The purpose of this package is to
adapt our regulatory framework
to the continuously changing landscape of digital services.
Digital services have evolved since the adoption of the eCommerce Directive in
2000, and so has the scale of their use as well as online behaviour. We need to
make sure that our societies and citizens are not exposed to undue risks
emanating from new digital services and technologies.
Service providers will have to act responsibly, providing us with reasonable
reassurance that they mitigate risks such as illegal content (hate speech,
terrorist propaganda, or child sexual abuse material) to products placed on our
markets that are totally unsafe (i.e. do not respect our product safety and
consumer protection rules).
Any such rules must provide for the appropriate checks and balances to
safeguard fundamental rights, such as freedom of expression and information
or the freedom to conduct a business.
We also need to ensure that European rules are properly enforced in Europe.
This will require better cooperation between platforms and public authorities, as
well as between national authorities.
Creating a regulatory framework that makes the EU fit for the digital age is one
of the main priorities of the new Commission. As such, we are working with an
ambitious timeline and are committed to engage in an open debate and
discussion will all relevant actors in creating the European approach.
An important step in the preparatory work towards the Digital Services Act has
been the recent publication of the open public consultation, which aims at
gathering views on the main issues surrounding digital services offered in the
EU. We would very much welcome your contribution.
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Netflix meeting with VP for EMEA Public Policy, Madeleine de Cock Buning
23/06/2020
Market power/significant network effects
A debate is ongoing around the world on the question whether competition rules
are fit for purpose in the digital age and the globalised economy.
The Commission is of the opinion that the EU competition rules work in general
well, as confirmed by various studies and most stakeholders.
Nevertheless, the Commission is reflecting on how to streamline certain
aspects of antitrust and merger control and to improve its effectiveness, also in
view of the digitalisation. This also includes the launch of a “digital sector”
inquiry in 2020.
In parallel, the Commission announced in the Digital Single Market
Communication from 19 February that it will assess
a need to impose ex ante
rules for to ensure that markets characterised by large platforms with
significant network effects acting as gate-keepers, remain fair and
contestable for innovators, businesses, and new market entrants.
It is thus to be clarified that the contemplated
rules on significant network
effects will be prepared by the Commission as a proposal separate from
the Digital Services Act, which is rather intended to be a revision of the
eCommerce Directive, although they should be published in one package.
We
welcome contributions from Netflix, in particular to better understand
the precise challenges for the company and opportunities emerging on
the market, as well as the company’s views on the potential options to explore.
Digital Services Act / e-Commerce Directive revision
No new company can scale up in Europe against an increasingly fragmented
background. Only the current, big companies (most of which are American)
have the resources to offer their services all over Europe. The less clear and
harmonised our legal framework, the more the big companies will strive.
The E-Commerce Directive from 2000 is widely regarded as one of the central
pieces of Internet Regulation in the EU. It regulates Treaty Freedoms such as
the freedom to provide (digital) services in the Internal Market, as well as the
freedom of establishment for providers of these services. It also regulates the
liability that intermediaries such as ISPs, Cloud service providers, or online
platforms have for third party content, which they transmit or host. The
established framework guaranteed a balanced framework helping both
innovators while also protecting fundamental rights online.
Today’s services are dramatically different from 2000 (e.g. social networks,
collaborative economy services, online advertising, etc.), they reach much more
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Netflix meeting with VP for EMEA Public Policy, Madeleine de Cock Buning
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deeply into the society than in 2000; and the internal market is refragmenting
especially for platforms, e.g. with new online hate speech laws in DE and FR.
Following these political guidelines, Commission services (under the lead of DG
CONNECT) are now carrying out preparatory work, including fact-finding and
evidence gathering.
Defensives
What is the timeline for the adoption of the DSA Package?
The Digital Services Act Package has been identified as a priority for the
Commission, both in the President political guidelines and in the
Communication on Shaping Europe’s Digital Future.
We are therefore working on an ambitious timeline for the adoption.
The open public consultation, which was recently published, will run for a period
of three months until 8th September. In parallel, we have also published two
inception impact assessments for which we welcome feedback until the end of
June.
Taking due account of the feedback and data received via those instruments,
the Commission will then work on the preparation of the corresponding Impact
Assessments outlining the policy options available to tackle the identified
issues.
The Commission aims at adopting the Digital Services Act Package by the end
of the year.
Will the new Digital Services Act maintain the country of origin principle of the
eCommerce Directive?
By subjecting players to only one set of national rules, the country of
origin principle of the eCommerce Directive has helped digital businesses
operate, scale up, and compete in the European Union. At the same time,
the cross border nature of these services brings new challenges to the practical
application of the country of origin principle: Member States are increasingly
looking into regulating online platforms available in their territories.
In this mandate, the Commission has retained the country of origin principle as
the cornerstone of many of its initiatives. This is the case, for instance, for the
new rules on video-sharing platforms under the revised Audiovisual Media
Services Directive (AVMSD).
Our services are carrying out an in depth assessment of the current state
of play in order ensure that any new regulation based on the country of
origin principle remains effective in practice. In particular, the DSA will aim
at providing an appropriate and effective system of cooperation among
national regulatory authorities of the relevant Member States when
enforcing the rules.
Will platforms take more responsibility for the content they host? How will this
be enforced?
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Netflix meeting with VP for EMEA Public Policy, Madeleine de Cock Buning
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Our current thinking is to provide for a harmonised set of rules, codifying notice
and action measures, as well as responsibilities for making sure legal content is
not removed and redress is available to all users. This will provide legal certainty
while incentivising platforms to act against illegal content they might host.
It is key to strengthen the enforcement mechanism: for this to remain effective,
the home state control needs to be reinforced with a smooth cooperation
mechanism across national authorities so that all issues are resolved
consistently across the single market, in the fastest way possible and with the
smallest legal complexity and burden on online services and authorities.
Background
Market power/significant network effect
The Platform to Business Regulation was adopted in June 2019 and will be
applicable as of July 2020. It was conceived as a first step measure to address
certain harmful practices by online platforms and search engines and to ensure
a more predictable and transparent trading environment for online business
users. It also provides businesses with better redress options in their
relationships with online platforms.
The Regulation notably obliges online intermediaries and search engines to
provide information on their main parameters applying to how a product or a
website is ranked in search results. The Commission is currently preparing
ranking guidelines to help the online platform industry to comply with this
obligation. The guidelines will be published before the entry into application of
the Regulation.
As a second step, the Commission set up the Observatory for the Online
Platform Economy to monitor the challenges and new developments in the
online platform economy. It is supported by a group of independent experts,
established by the Decision of 26 April 2018 to assist the Commission in its
work.
So far, the Observatory has focused on the following areas of work:
measurement of the online platform economy, differentiated treatment, data
access. It will also look into issues related to transparency in online advertising
and market power.
Based on the work of the Observatory, the Commission will reflect on the need
to review the current rules and come up (if necessary) with new regulatory
measures.
At the same time, policy reflections are ongoing at international, EU and
national level on how to increase and safeguard competition in digital markets
and in the wider global digital economy. Several reports pointed to the need
to
boost the enforcement of competition law and to consider effective ex-
ante regulatory measures to complement competition rules in addressing
these challenges.
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Netflix meeting with VP for EMEA Public Policy, Madeleine de Cock Buning
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In this regard, the Commission Communication on Shaping Europe’s
Digital Future released on 19 February, also announced that the
Commission will further explore, as part of the Digital Services Act
package, ex ante rules, “complementing competition instruments, to ensure
that
markets characterized by large platforms with significant network effects
acting as gatekeepers, remain fair and contestable for innovators, businesses,
and new market entrants.”
It is envisaged that the market power instrument will be part of the DSA
package of measures.
Subtopic 2 –
Digital policy supporting cultural heritage
in the context of the coronavirus crisis and its consequences
Line to take
Certain sectors, including in particular the cultural and creative industries and
tourism, also rely heavily on cultural heritage. Therefore, supporting the
recovery in such key ecosystems also requires support for the cultural heritage
sector.
Through Europeana, Europe’s digital platform for cultural heritage, the
Commission is promoting European cultural jewels and hidden gems as a way
of stimulating safe, local, green, innovative tourism. Other digital platforms,
including Netflix (which has actually seen an increase in the number of
subscribers because of the lockdowns around the world), could also use cultural
heritage content to support the recovery in sectors such as the cultural and
creative industries and tourism.
The Commission is also promoting innovative digital experience of cultural
heritage and encouraging the adoption and use of advanced digital
technologies such as 3D and virtual reality in order to contribute to resilience,
recovery and sustainability in the cultural heritage sector and in ecosystems
such as the cultural and creative industries and tourism.
Background
Like so many other sections of our economy and society, the cultural heritage sector
has also been heavily affected by the crisis. Museums, for example, have closed, and
many have lost most if not all of their revenue, a loss that can reach between 100 000
and 600 000 euros per week for the big ones.
At the same time, many cultural heritage institutions have been very effective in seizing
the options offered by digital technologies during the crisis. As a result, they have been
able to maintain contact with their audiences and, even more notably, some have even
engaged with new audiences that have discovered them only now, in the context of the
current crisis and the stay-at-home limitations, and by digital means.
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Netflix meeting with VP for EMEA Public Policy, Madeleine de Cock Buning
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On the
Cultural Heritage @home page, the Commission has been collecting and
promoting examples of innovative digital cultural heritage experiences, based on
technologies such as 3D and virtual reality, all of which are very impressive and
immersive.
On 27 May, the Commission organised, together with researchers, cultural heritage
institutions and SMEs from relevant areas, a
European web conference on 3D digital
cultural heritage for resilience, recovery and sustainability, which explored and
highlighted the value of such content in helping the cultural heritage sector and other
areas such as tourism and the cultural and creative industries to recover after the crisis
and strengthen their resilience and sustainability for the future.
Cultural tourism accounts for 40% of all tourism in the EU, and cultural heritage plays a
major role in attracting visitors from Europe and beyond. At the request of the
European Commission, on 15 June, Europeana, the European platform for Digital
Cultural Heritage, launched a special page and campaign dedicated to Discovering
Europe, showcasing European cultural jewels and hidden gems. The objective is to
highlight the role of cultural heritage in stimulating safe, local, green, innovative
tourism. Europeana has also set up a Tourism Hub on its Europeana pro platform to
help heritage professionals connect with tourism.
Background - Cultural and creative sector and EU support/relevant policies
Netflix launched an
Emergency Support for Workers in the Creative Community (a
$100 million fund): most of the fund will go towards support for the hardest hit workers
on their own productions, but $15 million of the fund will go to third parties and non-
profits providing emergency relief to out-of-work crew and cast in the countries where
Netflix has a large production base. In Europe, aid packages were granted in Spain,
France, Italy and the UK. While these initiatives come across as generous, they are
proportionate to the company’s strengthened position on the market. In fact, the
leading subscription video-on-demand service (SVOD) in the EU (46 % of the market in
2018 according to the Audiovisual Observatory data; this figure has been on the rise
over the last few years) is reported to have been boosted by the success of original
content released after lockdown measures were adopted across the world and to have
benefitted from a turn-over increase by 28 % in the first quarter of the year, with more
than 15 million new subscribers.
The increased consumption of films online has not translated into an increase of
compensation for creators for their work on the platform, nor has it generated a
revenue for those who had to suspend productions. The crisis has shown the need for
broader and more sustainable responses from public institutions in support to the
cultural and creative sector.
To complement and support Member States’ actions, the European Commission has
taken a set of
measures at EU level. They include both cross-cutting measures (e.g.
the Temporary Framework for state aid measures to support the economy, which
specifically refers to culture as a sector that has been particularly hit and enables
Member States to use the full flexibility under state aid rules to support the economy in
this difficult time) and those related specifically to Creative Europe, the European
Commission's programme to support the culture and audiovisual sectors. The latter has
been made more flexible and adapted to the urgent needs. Beyond Creative Europe,
other tools available are being mobilised, including the Erasmus+ programme.
The Commission has also put forward its proposals for an ambitious major recovery
plan called Next Generation EU in response to the Coronavirus crisis, together with
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Netflix meeting with VP for EMEA Public Policy, Madeleine de Cock Buning
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modern and revamped long-term EU budget. The creative and cultural industries are
among the priority intervention areas. Among other measures, the Commission is
proposing to strengthen the Creative Europe Programme to further support the sector.
The current and unprecedented crisis requires close collaboration on the EU level
between institutions, policy-makers and stakeholders. In this context, the Commission
has set up
two platforms to help share challenges and solutions at the EU level in
relation to the COVID-19 impact on the cultural and creative sectors. The platform for
EU Member States was launched on 24 April. It allows the representatives of EU
culture ministries to exchange good practices. The second platform, “Creatives Unite”,
shall help people in the cultural and creative sectors share information and solutions
more easily. It was launched on 5 May and gives access in one single space to the
multitude of existing resources and numerous relevant networks and organisations as
well as offers a curated space to co-create and upload contributions towards finding
solutions together.
Last but not least, an essential element for the recovery is a
sustainable and forward-
looking regulatory environment which enables and supports European cultural
diversity and creators. In this context, the swift implementation of some legislative
reforms adopted in recent years are especially relevant in relation to VOD services like
Netflix.
In particular, it is essential that the
Directive on copyright in the Digital Single
Market contributes to address some of the challenges arising from the current crisis,
including notably the need to ensure appropriate remuneration of creators for the
exploitation of their works by VOD platforms1. It provides in fact for specific rules aimed
at strengthening the ability of creators to be properly remunerated for the use of their
works. The Commission is committed to working together with the Member States and
other interested parties to ensure the effective and timely implementation of the new
Directive.
Another important reform is the
revised Audiovisual Media Services Directive, which
imposes a 30% quota for European productions in the catalogues of VOD providers
such as Netflix and the obligation to ensure their visibility. Member States are also
allowed to impose financial contributions for European productions on VOD services in
their jurisdictions, as well as, under certain conditions, to those established in a
different Member State but targeting their national audiences. Commission guidelines
will be adopted shortly to ensure the implementation of the new rules.
Background
CV
Professor Dr. Madeleine de Cock Buning, Vice President at Netflix
Working with the EMEA team to ensure Netflix continues to
play an active role in supporting the EU institutions and national
governments in Europe, Middle-East and Africa on their efforts to promote
and champion the creative industries as a catalyst for innovation and
1 In fact, Netflix’s negotiated contracts with creators/rightholders or Netflix’s own productions
have been reported in the press as often subject to a one-time fee for all, precluding creators
from receiving any additional royalties in the future, independently of the number of viewings.
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Netflix meeting with VP for EMEA Public Policy, Madeleine de Cock Buning
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creativity (2020 onwards)
Chairing the EC High Level Group on fake news and on line disinformation
(2018) resulting in multidimensional approached forming the basis of current EU
Policy. Getting different interest - including global social media platforms -
aligned towards balanced effective solutions to one of the most complex
problems in modern digital society.
Chair AV European Regulators Group (ERGA) (2016-2017).
Chair Supervisory Authority to the Media (CvdM); heading strategic policy
towards future-proof tailor-made compliance & supervision in an innovative
context (2009-2019).
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