On July 7, 2020, the European Commission adopted the “Guidelines on the practical application of the essential functionality criterion of the definition of a ‘video-sharing platform service’ under the Audiovisual Media Services Directive” (hereinafter “Guidelines”). The aim of the Guidelines is to foster a coherent implementation within Member States of the new provisions introduced by Directive (EU) 2018/1808 concerning video-sharing platforms.
On November 14, 2018, the European Union adopted Directive (EU) 2018/1808, which amended Directive 2010/13/EU, i.e., the Audiovisual Media Services Directive (“AVMS Directive”).
As a recall, the AVMS Directive aims to harmonize national legislation on audiovisual media services. Prior to the latest revision, its subjective scope of application covered linear (i.e., traditional television broadcasters) and non-linear (i.e., on-demand) audiovisual media services.
In light of the expanding role played by video-sharing platforms in the audiovisual landscape, for the first time the revised AVMS Directive has extended certain provisions typically applied to linear and on-demand audiovisual media services to video-sharing platforms, including content shared on certain social media services.
The ratio behind the extension of the subjective scope of application of the AVMS Directive is best explained by Recital 4 of Directive (EU) 2018/1808, which underlines how, “Video-sharing platform services provide audiovisual content which is increasingly accessed by the general public, in particular by young people. This is also true with regard to social media services, which have become an important medium to share information and to entertain and educate, including by providing access to programmes and user-generated videos. Those social media services need to be included in the scope of Directive 2010/13/EU because they compete for the same audiences and revenues as audiovisual media services. Furthermore, they also have a considerable impact in that they facilitate the possibility for users to shape and influence the opinions of other users. Therefore, in order to protect minors from harmful content and all citizens from incitement to hatred, violence, and terrorism, those services should be covered by Directive 2010/13/EU to the extent that they meet the definition of a video-sharing platform service.”
The Regulatory Framework
Pursuant to Article 1(1)(aa) of the AVMS Directive, a video-sharing platform service is “a service […] where the principal purpose of the service or of a dissociable section thereof or an essential functionality of the service is devoted to providing programmes, user-generated videos, or both, to the general public, for which the video-sharing platform provider does not have editorial responsibility, in order to inform, entertain, or educate, by means of electronic communications networks […], and the organisation of which is determined by the video-sharing platform provider, including by automatic means or algorithms in particular by displaying, tagging and sequencing.”
As is duly noted in the Guidelines, based on the above definition, video-sharing platform services can be identified based on three criteria:
- Services whose principal purpose is to provide programs, user-generated videos, or both to the general public;
- Services of a wider nature offering, among other elements, a dissociable section whose principal purpose is to provide programs, user-generated videos, or both, to the general public;
- Services for which an essential functionality is devoted to the provision of programs, user-generated videos, or both, to the general public.
It should be noted that the aim of the AVMS Directive is not to regulate social media services per se but only those social media services in which the provision of programs and user-generated videos constitutes an essential functionality.
In light of the above, the Guidelines aim to provide guidance on the practical application of the essential functionality criterion provided in the definition of a video-sharing platform. Such guidance is necessary to better understand which services actually fall under the definition of video-sharing platform services provided under Article 1(1)(aa) of the AVMS Directive and, as such, are subject to the relevant provisions contained therein.
Recital 5 of Directive (EU) 2018/1808 states that in order for the provision of audiovisual content to constitute an essential functionality of the service, such audiovisual content must not be “merely ancillary to, or a minor part of the activities.”
The Commission states that when assessing whether audiovisual content functionality is essential, Member States should consider the nature and the particular role played by the audiovisual content offered by the platform. In assessing whether such content is merely ancillary to, or a minor part of, the activities carried out by the platform, national regulatory authorities should, in particular, take into account qualitative and/or quantitative indicators.
Furthermore, particular attention should be paid to whether the audiovisual content is instrumental to the commercial success or positioning on the market of the video-sharing platform provider. To this end, the Commission specifies that “the essential functionality requirement should not, in any case, be interpreted as requiring that the audiovisual content available on the platform be of such a crucial commercial relevance that, in its absence, the service would not be able to function or continue to be provided on the market. Such a narrow interpretation would not guarantee an adequate level of protection of users and minors when they consume audiovisual content on many popular platforms, such as certain social media services, and would thus not be in line with the aim pursued by the AVMSD.”
Another relevant factor that should be taken into consideration for the assessment above is the degree of exposure to audiovisual content to which users are subject when accessing the relevant services of a given platform. Indeed, according to the Commission, services that rely on audiovisual content as a non-minor or not merely ancillary component of their activity tend to augment users’ exposure to such content.
In line with the foregoing, the Guidelines identify certain relevant indicators that Member States and their respective national regulatory authorities should consider when applying the essential functionality criterion.
Before describing the indicators, as clarified by the Guidelines, it should be noted from the outset that the indicators are not meant to be applied cumulatively. In particular, “the absence of one or more of them should not automatically lead to the conclusion that the services is not a video-sharing platform. Instead, a service should be considered as fulfilling the test of essential functionality where, on the basis of an overall assessment, a sufficient number of indicators analyzed support the conclusion that the audiovisual content provided by a service is not merely ancillary to, or a minor part of, the activities of the service.”
The indicators are divided into the four categories that follow:
- Relationship between the audiovisual content and the main activity or activities of the service.
According to the Guidelines, when the audiovisual content has a value of its own on the platform and, therefore, users may consume videos and programs independently of another underlying economic activity, it is likely that such audiovisual content constitutes an essential functionality of the service.
To this end, Member States should take into consideration the following indicators:
- The overall architecture and external layout of the platform, e., if the platform is structured around sharing content to inform, educate, or entertain users;
- Stand-alone nature of the audiovisual content, e., if videos are uploaded or shared on the platforms as stand-alone items rather than with a view to facilitating economic transactions (e.g., an e-commerce platform that allows vendors to upload videos describing their products likely would not fall under the definition of a video-sharing platform under the AVMS Directive);
- Specific functionalities of the service tailored to, or specific to, audiovisual content, e., the presence on the platform of specific features tailored to audiovisual content (e.g., auto-play or livestreaming functionalities);
- The way the service positions itself on the market and the market segment it addresses, e., the way the service self-identifies in its communication to the public and the way it markets or advertises its services to users in the market segment it addresses.
- Quantitative and qualitative relevance of audiovisual content to the activities of the service.
From a general standpoint, the Commission deems that the greater the amount of audiovisual content and its importance to the service, the less likely it is for such content not to be considered an essential functionality of the service.
To this end, the Guidelines envisage that the following qualitative and quantitative indicators should be taken into consideration:
- The amount of audiovisual content on the platform;
- The use of audiovisual content on the platform, e., whether users make substantial use of the videos available on the platform. Such information can be inferred based on reliable quantitative evidence, such as number of clicks, likes, or shares relating to videos (where available);
- The reach of audiovisual content, e., the presence of videos capable of reaching a large number of users. For instance, popular videos, even if limited in number, are still able to reach a vast number of users.
- Monetization of or revenue generated by the audiovisual content.
According to the Guidelines, the fact that platforms are able to generate revenues from the audiovisual content available thereon indicates: (i) that such content is an essential functionality of the service; and (ii) the commercial relevance of the content to the service.
In this sense, the following indicators should be taken into consideration:
- Inclusion of commercial communications in or around audiovisual content (such as pre-, mid-, or post-roll). This should include both commercial communications controlled by the service and the sale of advertising space to third parties;
- Making the access to audiovisual content subject to payment, i.e., provision of services based, for instance, on a subscription or pay-per-view model;
- Sponsorship agreements between brands and uploaders;
- Tracking of users’ platform activities,e., the fact that the platform may track users’ interactions with the audiovisual content available.
- Availability of tools aimed at enhancing the visibility or attractiveness of the audiovisual content.
In this sense, the following indicators should be taken into consideration:
- Specific features or actions prompting the consumption of audiovisual content, e., the fact that the platform provides specific features that are used to augment the consumption of audiovisual content by users (e.g., the presence of recommended videos);
- Tools available within or around videos that are designed to attract users and encourage interaction, e., tools such as filters, sharing options, live chats;
- Tools or systems allowing users to select the audiovisual content they want to see offered, e., functionalities that allow users to customize video offerings by providing information about their interests;
- Tools or systems to track performance and manage content uploaded on the platform, i.e., offering uploaders tools they can use to better understand the performance data for their videos, thereby allowing them to shape the content they offer to maximize views.
Other useful items concerning the Guidelines
- The Guidelines are not legally binding on Member States, which are free to use alternative approaches and indicators to carry out the essential functionality test;
- The decision about whether a platform provides audiovisual content as an essential functionality rests with the Member State that has jurisdiction over the service, according to the provisions of Article 28(a) of the AVMS Directive;
- The assessment above shall be carried out on a case-by-case basis;
- National authorities shall inform platforms about ongoing assessments and the legal implications stemming therefrom.