AEPOC welcomes E.U. Commission¡¦s explicit analysis of threats to European media business and proposes further steps against piracy of electronic pay-services

Brussels, May 7th 2003 ¡V AEPOC, the European Association for the Protection of Encrypted Works and Services, agrees on the main conclusions of the E.U. Commission¡¦s report on the implementation of the 1998 Directive on legal protection for electronic pay-services which was released April 29th. AEPOC groups 28 leading service providers and vendors in a common effort to actively eliminate the pirating of encrypted works and services and to increase the security and safeguarding of conditional access systems for electronic pay-services such as TV broadcast and IP services. AEPOC shares the view of the Commission with regards to the severe effects of piracy on the development of the media industry and knowledge-based economies. In fact, AEPOC estimates that every year some 1 billion € is spent by consumers inside the European Union for smart-cards and decoding equipment used to hack into encrypted signals. Piracy of electronic pay-services, the effects of which the Commission compares to those of the ¡§counterfeiting of goods in the twentieth century¡¨, dramatically reduces the achievable revenues necessary to finance investments in content, transmission systems and hardware. Decreasing investments in turn limit technical research, cultural creativity, employment and economic opportunities of the media business as a whole. The Commission rightly denotes piracy of electronic pay-services as being ¡§far from a victimless crime¡¨. AEPOC welcomes the Commission¡¦s determination to assert the implementation of the relevant EU directive 98/84 on the legal protection of conditional access services which entered into force in 1998. Some Member States have not yet fulfilled the requirements of the directive. AEPOC agrees with the Commission¡¦s analysis of the enforcement of anti-piracy legislation across Europe. The key element in that respect is the joint effort of industry and enforcement authorities to curb piracy. To foster such private-public partnership as well as the development of cross-border networks of enforcement agencies and professionals AEPOC has recently proposed a multimedia-based training and information initiative under the AGIS programme of the E.U.. The decision on the support of this initiative is expected at the end of July 2003. AEPOC also fully agrees with the Commission¡¦s view on the need to enable a coherent pan-European legal framework against the piracy of electronic pay-services as well as on the need for a clear European enforcement framework to combat Internet enabled piracy. Today, the Internet is by far the most important platform for pirates to distribute access codes and updates to illegal decoding software keys as well as illicit devices. While AEPOC concedes that the illegal reception of cross-border Pay-TV is one element in the wide spectrum of Pay-TV piracy, it emphasises that this kind of illegal TV reception represents a very limited share of the piracy problem. The driving forces behind piracy remain well organised criminal groups as well as the profit incentives related to national content along with the presently low personal risks of such activities resulting from a dissatisfactory legislative and enforcement situation. Further steps to be taken Although Internet-related piracy is analysed in the document, the Report considers it premature to adapt the Directive to this reality which the Directive from 1998 does not take into account. This would pursue an aim set forth in Article 7 of the Directive itself. However, based on the explicit analyses of the Report AEPOC considers it necessary that a number of steps be taken and amendments to the Directive be implemented. A further amendment of the Directive should oblige E.U. Member States to provide for the punishment of personal use and possession of illicit devices, still left unpunished in many Member States and not taking the existence, as underlined by the Commission, of a hidden "cottage industry" into consideration. In this regard, AEPOC opposes the concepts of serious harm and of commercial purpose on a large scale set forth as a precondition for criminal sanctions in the draft Enforcement Directive as proposed by the E.U. Commission January 30th, 2003. AEPOC also proposes the introduction of minimum thresholds for sanctions across Europe as well as the legal protection specifically governing the use of conditional-access devices for reasons that are not just for the protection of direct remuneration (e.g. copyright protection, protection of minors, special interest content). AEPOC welcomes that the European Commission has indicated in the conclusions of the document that further work will be implemented in close co-operation with the Member States and it will insist on new technological developments in view of a more complete legal protection against any kind of piracy. Any initiative thereto shall be supported and welcome. AEPOC considers the report a useful tool for the Candidate Countries in the process of implementation of the acquis communitaire. In order to effectively fight piracy, it is essential that the Candidate Countries fully implement the CAD and introduce additional appropriate legislation as soon as possible. As pointed out in the report, only if pirates do not find safe havens in Europe will it be possible to effectively combat piracy. ¡§AEPOC will continue its constructive dialogue with policy makers and enforcement agencies on both national and E.U. levels on the crucial issue of piracy of electronic pay-services. We wish that private-public co-operation will develop into a continuous reality, also through the E.U. support of our training and information initiative¡¨, said Jean Grenier, President of AEPOC. The press release of the E.U. commission on the report is to be found under: http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/03/583|0|RAPID&lg=EN AEPOC (www.aepoc.org) is the "Association Européenne pour la Protection des Oeuvres et Services Cryptés" or the "European Association for the Protection of Encrypted Works and Services". AEPOC started its activities in 1995. Its current membership consists of 28 leading digital television and telecommunication companies including TV channels, conditional access providers, providers of transmission infrastructures and manufacturers of related hardware. AEPOC¡¦s goal is to eliminate the pirating of encrypted works and services and to encourage the development of the appropriate legal, operational and technological frameworks to increase the security and safeguarding of conditional access systems for Pay-TV, TV-based and IP services. The AEPOC members are: BetaResearch, BskyB, Canal+, Canal+ Polska, Canal+ Technologies, Conax, Eutelsat, Irdeto Access, Motorola, Nagravision, NDS, Nokia, NTV-Plus, Pace, Philips Digital Networks, Premiere, Rai, Sagem, SCM Microsystems, Showtime Arabia, Société Européenne des Satellites, Sogecable, Stream, Tele+, Thomson, TPS, United Pan-Europe Communications (UPC) and Viaccess - France Telecom. Press Contacts Jörg Rücker m project Market Relations GmbH Altkönigstr. 4 D- 61462 Königstein / Germany Tel. +49 - 6174 - 92 23-20 Fax +49 - 6174 - 92 23-92 aepoc@mproject.de Davide Rossi Secretary General AEPOC 165, avenue Louise B- 1050 Bruxelles / Belgium davide.rossi@aepoc.org www.aepoc.org