NOVEMBER 2021: The Unintended Economic Implications of Limited Liability Regimes for Online Platforms

There is ongoing discussion in many countries and in the EU about how to regulate Facebook and other platforms. Neil Turkewitz (1), President of Turkewitz Consulting Group, has written an introduction to an interesting article (formerly published in the Frankfurter Allgemeine Zeitung) by Stefan Herwig (2) on how the current regulatory regime for Facebook, where they have no liability for content on their platform, has had unintended consequences. UKCCD believes this is an important contribution to the debate on regulating platforms and it is an honour to be able to share the article’s translation here.

Translation of Stefan Herwig’s article by Neil Turkewitz:

The other week offered a one-two punch of bad news for Facebook CEO Mark Zuckerberg. Firstly, his network of social media and messenger platforms Facebook, Instagram and WhatsApp fail completely and worldwide for 7 hours due to an internal DNS configuration error. Additionally, the source of a series of scandalous leaks revealed herself to the public. Former Facebook employee Frances Haugen had leaked internal studies to the Wall Street Journal, according to which Instagram, for example, has a negative effect on the psyche and body image of young people. The effects ranged from eating disorders to depression to suicidal thoughts — in approximately one-third of female Instagram users. Facebook, however, decided to keep these findings under wraps, refusing to change its profit-generating algorithm which feeds users the information that is most interesting to them but also most polarizing.

Testifying before the U.S. Congress last week amidst great public interest, Haugen confidently sharpened her accusations, saying Facebook was deliberately earning through hate and polarization, the byproducts of its algorithm. The company had also failed to contain disinformation, she said, and had allowed too much misinformation about the covid pandemic on its platforms. Haugen’s revelations that social media platforms’ algorithms have negative effects on users and society are by no means new. For a long time, numerous scientific studies have concluded that the recommendations of major social media lead to radicalization, polarization and hate speech. Their “digital fallout” is thus the unintended side effect of a highly profitable business model.

What is new in this case, however, is that Haugen has the incontrovertible receipts that Facebook knew about the harm it was facilitating and took no effective action to address its role.

In response to these revelations and the almost simultaneous failure of the group’s infrastructure, which also made clear how closely the three platforms Facebook, Instagram and WhatsApp are technically interlinked, there were calls from various sides for more regulation. Green MEP Rasmus Andresen tweeted his call for the group to be broken up, even though a U.S. company like Facebook could hardly be effectively broken up from within Europe. German Federal Justice Minister Christine Lambrecht as well as EU Commissioner Thierry Breton now also see renewed cause for more far-reaching regulation. Hardly anyone is likely to believe the constant assurances that Facebook is on the mend.

But how do you regulate such a powerful corporate conglomerate, which has almost inexhaustible financial resources, continues to grow even in times of crisis, and whose algorithm is ultimately so opaque that its social effects only become visible years later through scientific studies?

How the “fallout” of the products of economic participants should be dealt with in regulatory terms is actually a problem that has long been solved in economics — these solutions have just been ignored in digital policy for years. In addition, the political framework conditions in the U.S. and Europe have themselves contributed significantly to the problem.

When products and services of economic players generate such unintended but harmful side effects, economics has its own term for this: These side effects are referred to as “external effects” or “externalities” when the effects or the costs incurred do not have to be borne by the originator, or only to an insufficient extent. In the case of Facebook’s algorithmic amplification of toxic content, this is precisely the case. For years, Facebook has been able to outsource responsibility for the effects of its algorithms to third parties in accordance with the law: for example, to journalistic research corrective agencies against disinformation or police investigative agencies against hate speech or terrorist propaganda. In the worst case, however, the consequences are borne by individual victims or society as a whole, since often neither platforms nor perpetrators can be prosecuted. What is explosive here, however, is that the platforms’ ability to outsource the damage to third parties is more or less covered by law. This is because Facebook, just like other social media corporations, has very limited responsibilities under the laws of most nations, following the lead of the US and EU as set out, respectively, in Section 230 in the US and the e-Commerce Directive in the EU. Both sets of laws granted platforms a kind of general absolution for the effects of their own conduct. Only when they become aware of an individual violation of the law do the platforms have to delete individual content, if necessary. In the US under Section 230, there isn’t even a requirement to delete illegal content once the platform becomes aware of it. Whether they delete or not doesn’t affect their immunity, unless platform misconduct rises to the level of violating federal criminal law.

This legal situation is also so advantageous for the platforms because it has enabled them to automate a large part of their deletion tasks. This saves on staff, but often produces disastrously poor results, especially if the deletion algorithms are not checked in parallel by humans.

However, as the number of users and media reach of the platforms grew, the social problems caused by their content grew also — exponentially. Only when hate speech, disinformation and polarization spread throughout society were platforms such as Facebook and YouTube forced to adopt more effective deletion behavior, but so far only through selective tightening, such as the German Network Enforcement Act. However, this only regulates the deletion of criminal content through hate speech. It does not, for example, include the effective handling of customer objections. As recently as last month, Facebook ignored customer objections to unlawfully deleted content with the automated response that it could not process all objections due to the “coronavirus pandemic.” The customer should please have understanding for this. The political regulation of Facebook’s content moderation — and that of other social networks, too, of course — is thus more than capable of being expanded.

So what use is the realization that Facebook’s “digital fallout” can be understood in economics as a market failure due to externalities? It helps the legislator insofar as it makes it clear that such problems can no longer be left to the market itself — because the market is failing in the economic sense. The diagnosis also shows where regulation would actually have to start in the case of Haugen’s revelations: An economic operator immunized from liability is more likely to choose the lowest cost for itself than the most effective solution. Facebook’s strategy of outsourcing content moderation to, among others, Filipino minimum-wage workers, as documented in the 2018 film “The Cleaners,” is just one piece of evidence of how the corporation repeatedly tries to keep the costs and overhead of its global network down with wholly inadequate measures.

Although it is now almost certain that the radicalization and polarization of societies, as is particularly noticeable in the USA, can be traced back to the effects of information algorithms, legislators are not acting — or are doing so only in ways that don’t fully respond to the scale and nature of the problem. In Brussels in particular, there are signs of another massive policy failure, because the rules for platforms are currently being renegotiated there as part of two legislative packages, the “Digital Service Act” and the “Digital Markets Acts”. However, the liability privileges of the platforms, the basic features of which date back to the ISDN era of the Internet, are to remain virtually untouched. This would mean that the legal subsidies would be maintained, even though the various harms facilitated by online platforms were actually intended to be politically contained.

The correct response to externalized damage caused by “digital fallout” in terms of regulatory policy would be to internalize the costs of the damage caused back into the market and pass them on to the polluter. However, this would only be possible through a fundamental change in the general liability framework and a substantial improvement in the content moderation of social networks.


(1) Neil Turkewitz is President at Turkewitz Consulting Group. A copyright activist and member of the Artist Rights Alliance, he served as EVP International at the Recording Industry Association of America (RIAA) was Vice-Chairman, Industry Trade Advisory Committee, and a former member of the Board of the Chamber of Commerce’s Global Intellectual Property Center. Follow him on Twitter @neilturkewitz and on Medium.

(2) Stefan Herwig operates Mindbase, a think tank that scientifically analyzes network policy issues. He advises companies and politicians on the social implications of digitisation and its regulation.

FEBRUARY 2021: Where is culture when considering the impact of Brexit?

No wonder 97% of those working in the creative industries voted to Remain in the EU. Their livelihoods depend on free trade and free movement with the EU. Yet, in spite of its contribution to the economy being equal to the financial services sector, PM Johnson opted for the hardest of all possible Brexits.

As an example, there was no need to leave the Creative Europe programme. Between 2014 and 2019, Creative Europe invested €203 million to support 609 projects involving UK companies and organisations and €68 million of this was directly received by these UK-based beneficiaries. In fact, the UK was the third largest beneficiary but PM Johnson decided to prioritise
sovereignty over all else.

Then came the betrayal over artist visas, with the EU offer of 90-day visas rejected because the number of days exceeded the Home Office strategy. Don’t expect to see the Berlin Philharmonic any time soon in the UK or the
London Philharmonic touring Europe. And there are no signs yet that the HMRC or Home Office intend making things any easier. No replacement funds have been announced to replace Creative Europe investments, except for a mere £7million to create a Global Film Fund, loudly trumpeted by Sunak.

It’s worth remembering that EU MEDIA-supported films earned revenues of just over €575 million in Europe, not including UK revenues. Also that Netflix, which aims to produce 52 global films a year, is offering budgets of 7 – 20 million per film. So is this non-national company taking over from Creative Europe? In which case where is the hankering for sovereignty?

Progressive parties need to make the case for free movement, urgently and loudly. Equally, there’s been almost no comment on the government’s choice to leave the EU’s Creative Europe programme. The Free Trade Agreement allows for UK scientists to carry on working in the EU Horizon programme so what of our artists/authors/poets and film makers? Why are they denied partnership and exchange with Europe? One German MEP remarked “ We can only conclude that the UK government wishes to cut the UK’s cultural ties with the rest of the EU.”

He who controls the cultural zeitgeist controls the political environment. But perhaps the government has never read Gramsci, or perhaps it simply aims to minimise cultural links with European friends and allies, and drift out into the Atlantic.

DECEMBER 2020: Ensuring our Cultural Sovereignty

With streaming and other internet entertainment services booming because of Covid-19 and concerns that they impinge on existing national broadcasting models, there is a growing political will in Europe and Canada to legislate in order to ensure that such internet players (with access to their lucrative subscription markets) are taxed a small percentage of their turnover which then gets invested in local drama and films. This is on top of the 30% local EU/national quota of drama/films, which streaming services must now include in their catalogues.

Measures to be taken in Canada, following a report from the Broadcasting and Television Review Panel, can be found here.

On our side of the Atlantic, measures under consideration in defence of cultural sovereignty by the EU Commissioner, Thierry Breton, as revealed at a recent Autumn event held by the French Guild of Authors, Producers and Directors, ARP, include some dedicated cultural industry measures from within the EU’s €750bn recovery fund and a Digital Services Act. This would regulate the platforms in favour of them taking more responsibility to those who create the content they depend on; establish rules for digital markets to address monopolies; support audio-visual investment; help industry fully transform to digital catalogues and enable an improved European data space.

Yet, the UK Government is still being selective with regard to the transposition of the AVMSD and Copyright directives. It appears keen to minimise regulation which might interfere with free trade agreements down the line. Recent discussions about a UK regulatory authority for the Internet are welcome, but its priorities need to take into account the needs of creators not only consumers.

Meanwhile, UKCCD is monitoring the impact of the Trade Bill currently going through Parliament. This provides a template for setting up future trade agreements and only makes reference to one specific sector, Agriculture.

However, given the lack of attention paid to our cultural sovereignty, UKCCD is alerting MPs and Lords to the need to safeguard UK sovereignty against certain clauses in any eventual UK/US FTA, which are being proposed by the powerful Internet lobbies.

It is crucial to consider that such clauses could prevent the UK from regulating the internet in the future. It is significant that Germany, France and soon Ireland, key Anglophone partners in the future ahead, have enacted between 2.8-3% of turnover levies on streaming services as a quid pro quo for allowing these services’ access to their lucrative audio-visual markets.

Such levies are then invested in national film funds thus enhancing local audio-visual production and the telling of local stories and thus local cultural diversity.

OCTOBER 2020: Managing Big Tech in favour of creators – and where is the UK?

According to German research Google spent €38 million in misleading lobbying to prevent EU Member States and in particular the European Parliament from adopting an updated directive on copyright. The legislation would oblige them to sit down with individual authors, musicians, performer, publishers and others and agree to pay decent royalties. That means to actually pay creators for what they create and in many cases what enables them to live by their creation. Such is required if cultural diversity is to thrive. If people who create don’t receive their fair dues then it’s not only unfair but threatens the diversity of creativity which is fundamental to our democracy and society. Google’s propaganda almost won through. However, the 2019 EU copyrights directive, now considered to be world beating, was adopted by a small margin. Now the catch… the EU directive has to be translated into national law. Here in the UK the government appears reluctant to do so. It would seem as if big tech are more important than the UK’s creative industries.

Not so for the EU which wants to not only support Europe’s creators but other businesses as well. Now the US tech giants are facing the threat of an EU attempt to break them up, after France and the Netherlands unusually called on the EU Commission to come up with proposals for the EU’s competition authorities to take pre-emptive measures, as they prepare sweeping legislation to curb the companies’ market power. Cedric O, France’s digital minister, and Mona Keijzer, the Netherlands’ state secretary for digital affairs, have unusually signed a joint position paper calling on regulators in Brussels to take swift action against emerging tech giants and existing “gatekeeper” platforms — including options to break them up.

Simultaneously in the US, the House Judicial Committee came out with a stinging report criticising big tech that said: ”These companies wield their dominance in ways that erode entrepreneurship, degrade America’s privacy online and undermine the vibrancy of the free and diverse press. The result is less innovation, fewer choices for consumers and a weakened democracy. Tough talking indeed. With a Biden victory and a change in balance of power, plus renewed EU regulatory commitment, we may finally see a reshaping of digital capitalism.

It would seem that the European Union is beginning to grapple with the issue of overmighty tech. Additionally to the above, the EU is making a list of up to 20 large internet companies, potentially including Google, Facebook, Amazon and Apple, who will be forced to share data with their rivals and be more transparent on how they gather information. Meanwhile in the UK it looks like our creators and small business people are to be left to be plundered to enrich big tech with little protection.

SEPTEMBER 2020: Dangers for UK creative industries evident in US trade deal with Canada and Mexico – Non-Conformist Measures

The reason why the exclusion of audio-visual services in bi-lateral trade agreements is so essential is clear from the limitations imposed on Canada by the recent Canada-United States-Mexico Agreement (CUSMA). This became law in July this year. It includes a provision relating to cross border cultural industries, Article 32.6, which endorses the current market situation and the public policy now in force but effectively says that public policy measures cannot be changed/updated unless the changes are mutually agreed.

If they are not agreed, the country proposing change is liable to retaliation. This is known as a “non-conformist” measure. Such provisions represent a major limitation on a nation state’s legislative and public policy sovereignty. It is the reason why the EU excludes all audio-visual matters from any trade agreement they enter into.

The Motion Picture Association of America (MPAA) are lobbying for so-called “non-conformist” measures to be included in any UK-USA trade agreement and the platform majors are lobbying to avoid existing EU measures from being transposed into UK legislation let alone new ones being imposed. So, for instance, were the UK to mandate extra investment in UK content by foreign services streaming into this country, this could be blocked. Any such public policy intervention would have to apply to all streaming services irrespective of nationality of ownership in order to avoid any US retaliation. Equally it could prevent measures to support British filmmakers’ ability to produce more local programmes/films than now and to export them to their biggest market, the EU, so advantaging US works to the detriment of British works.

The UK Government has not given any indication of its position. The text of the Canada-United States-Mexico Agreement (CUSMA) can be found here.

The provision relating to cultural industries is Article 32.6, which can be found here. While the term “audio-visual services” is not used, the definition of “cultural industry” in Article 32.6 is broad enough to embrace them.

JULY 2020: Trade Matters. Audio-visual Post Brexit: A Perfect Storm?

The economic significance of the creative industries is equal to that of the financial sector in the UK in its contribution to GDP. It also has one of the fastest growth rates of employment in the country (over 144,000). In 2019, a report by the European Audio-Visual Observatory, a Council of Europe body, showed that the United Kingdom is the largest audio-visual market across Europe as a whole exporting more audio-visual programmes/films/services to the EU than any other EU country.

Yet this sector is hardly mentioned by Government. Equally, the most recent COVID-19 support packages announced by the Treasury show little understanding of the lives and business models of the vast number of freelance creatives who sustain it.

The significance of creative industries goes far beyond economic considerations. Creative industries are vital to the identity, autonomy and social cohesion of our country. This has been consistently recognised in the development of European directives in which the UK has so far participated. Crucially, these regulations have been revised in order to underpin local cultural production, particularly in the audio-visual sector, and to keep up with the rapid development of business models for the digital and internet environment.

It is vital therefore that there should be an audio-visual agreement between UK and EU, of mutual benefit, which should be based on the provisions of the 2018 EU AVMS directive which includes regulation of video on demand providers.

The AVMSD provides, inter alia, for levies on services which are not based in countries’ jurisdiction but target national audiences, such as SVODs. This would support local production but the government is not intending to implement this option, but keeping this under review.

We would recommend that the government urgently consider the benefits of these AVMDS provisions, as implemented in other countries as levies that go to national film funds, not least to give a fairer and more proportionate return to creators from the Internet platforms.

The combination of the economic loss from the impact of COVID, with the loss of financial support from the EU through its Creative Media and Regional Development Funds, together with the collapse in Local Government funding makes it vital that the government finds additional sources of funding.

Furthermore, for any future audio-visual relationship with the USA to succeed it is important to draw on the example of Canada in the NAFTA/USMCA agreement and ensure that cultural and audio-visual services are not included in the scope of the EU/US trade agreement.

The opening of UK/USA trade to include audio-visual services will undermine the UK’s position in the sector and indirectly advantage US works to the detriment of British works, both inside and beyond the UK. British filmmakers’ ability to produce more local programmes/films than now and to export to their biggest market, the EU, will also be affected. 37% of UK creative industry exports are to the EU.

The 2019 Copyright Directive should also be transposed into UK law. If we want authors, performers, publishers and other creators to continue creating cultural works and promoting cultural diversity, they must be compensated fairly for their use. Failure to reward creators fairly limits creative industry revenues, holding back growth and the ability to generate new jobs. Newspapers and publishers will also benefit from the Directive. Failing transposition, there should be UK legislation on the main aspects of the Copyright Directive which are not currently covered by UK copyright and intellectual property law.

JUNE 2020: Artificial Intelligence

A critical area of European policy brainstorming and regulation which UK drops out of post-Brexit is building the infrastructure needed for AI to develop inclusively. This must also guarantee environmental protection, fair competition, a functioning digital public sphere and deal with discrimination issues.  

In relation to the restrictive impact of recommendation algorithms on the “discoverability” of films and documentaries UKCCD urges the DCMS Select Committee on public service broadcasting (see recent post) to ensure diversity of choice by including 30% of local programming in strap lines and catalogues. This would mean translating the EU Audio-visual Media Services Directive, which the current government supported in 2018, into British law.

At European level, The European Coalitions for Cultural Diversity (ECCD), will be lobbying the European Parliament and the European Commission to take due account of cultural diversity in any future recommendations they make.

This year MEPs on the European Parliament Legal Affairs committee alone have written 4 draft reports on AI.

We welcome MEP, Iban Garcia Blanco’s reference in his draft report to the need to uphold cultural and linguistic diversity, and await two opinions from the EP’s Culture Committee.

UKCCD is monitoring developments in Europe to advise on and safeguard our options for cultural diversity and inclusion in the UK. Digital infrastructures cannot be left to the commercial drivers of surveillance capitalism or the stranglehold of populist authoritarian governments.

‘The networked society of today lacks an infrastructure designed to enhance ‘individual inclusion, personal development, environmental protection, fair competition and a functioning digital public sphere’, as well as ‘access to data and services such as cloud services, mobility platforms or a search index’—in other words, ‘the common good’.

MAY 2020: Surviving COVID-19

The cultural sector is one of the worst hit by the lockdown yet rarely gets mentioned in coverage of the economic shutdown in spite of the fact that its contribution to the UK economy equals that of the financial sector.

The evidence is stark as shown in a recent survey by the Creative Industries Federation.  The 2,000 responses revealed 62% of freelancers and 42% of businesses estimate that their monthly turnover has fallen by 100% since the outbreak of Covid-19, and 62% of all respondents are facing considerable or very considerable cash flow issues. 75% of freelancers are worried that the SEISS grant payments will not be available until June. A fifth of those surveyed told us they would not survive for more than 4 weeks. Furthermore, the survey revealed that 1 in 7 creative organisations believe they can last only until the end of April on existing financial reserves. Only half think their reserves will last beyond June.

The Arts Council’s emergency funding of £90 million, though welcome, is a drop in the ocean. It is estimated that the Arts Council’s 828 NPOs alone will suffer a loss of £750 million by January 2021, almost double their core funding of £407 million. Ironically, those who have been following government advice to minimise their grant funding will be hardest hit. Beyond this is the overall impact on lottery funding which depends heavily on retail sales.

No wonder that The Economist finds that households employed in media/ culture/entertainment are the most concerned by the situation – see report by IHS Markit on IHS Markit UK Household Finance Index.

A letter has been sent to Rt Hon Oliver Dowden and Rt Hon Rishi Sunak urging the government to recognise the sector and to do more to prevent its collapse.

Pressure from trades unions like BECTU, Musicians Union and Equity has been strong in favour of support for freelancers, many of whom had hitherto fallen between the cracks of government support schemes.

The marginalisation of culture is widespread and the International Federation of Cultural Coalitions the IFCCD and several of its allies have just released a statement calling on UN agencies, governments and other stakeholders to support culture in the context of the pandemic. You will find it online on our IFCCD website. The IFCCD is also compiling a dossier to monitor what is being done by national governments.

UNESCO organised a virtual meeting of Ministers of Culture on Wednesday, 22 April to address the crisis and European cultural organisations have forced change in the EU response to the situation by calling for an amendment to the European Parliament resolution which now contains para 43 drawing attention to the plight of the arts/culture sectors. Shockingly, reference to culture or the cultural sector had been absent previously.

Whatever else is remembered of this strange lockdown experience, the outpouring of creative work on-line – orchestras and choirs performing social and long distance, dancers streaming their rehearsals, individuals turning confinement into comedy – will be remembered – Lest Government forget!

APRIL 2020: Brexit’s Impact on arts, culture and the creative industries

Over 95% of those involved in arts/culture and the creative industries voted to Remain in the EU and warned about the Brexit threat to artistic mobility and cultural exchange/partnerships, cultural diversity and the potential difficulty with creative exports from UK, particularly film and television programmes.

Listed below are key areas of concern. On the Move has also compiled an invaluable and comprehensive list of websites and information for the sector here

UK/EU trade agreement: The audio-visual sector (AV) will not be in the agreement as the EU already excludes AV from all trade agreements in line with the UNESCO Convention 2005 on the diversity of cultural expressions. This has implications for the UK AV industry and their ability to export to the EU. You can find the relevant UKCCD submissions under our resources here, section 2019.

UK/US trade agreement: If the UK government does not expressly exclude AV from any agreement with the US then the EU will shut its doors to British works being considered European works with severe export implications for British producers/creators. It would mean that British films/TV drama/documentary would likely not be bought by various TV channels in other EU Member States to fill quotas under the AVMS directive.

Revised AVMS directive: The UK government should implement the revised 2018 AVMS directive. Its “Country of Origin” rules allow UK TV channels to beam signals across the EU.

The UK is relying on membership of the Council of Europe Convention on Television. However, it is no longer regarded as a satisfactory legal basis to beam TV signals from UK to rest of Europe as it lacks an enforcement mechanism and has not been updated for the digital era to include internet platforms unlike the AVMS directive.

In anticipation of difficulties, a number of players like Sony, NBC have already relocated/opened offices elsewhere in the EU.

2019 Copyright Directive: The government has given no guarantee that it will implement this directive. Therefore, UK Music manifesto is asking the government to outline a pathway for implementing this directive on behalf of all musicians/music makers/producers etc.

Between 2015 and 2020 UKCCD was engaged in the Citizens Campaigns for Public Service Broadcasting, advising on the Labour Party’s culture policy, working with UNESCO and the European Coalitions on strategy for the digital era and the digital single market; chairing Creatives for Europe in favour of a remain vote, and working with the European Coalitions on the European Union’s audio-visual and copyright directives.

JUNE 2014: Where will the new European Parliament stand on the TTIP?

There are now concerns about its impact on health, environment, workers’ rights, accountability, as well as diversity of cultural expression. With a new European Parliament now discussing committee membership, and pending a new Commission President and new Commission we have to wait to know what line the new INTA committee will take on TTIP negotiation in the Parliament.

Denis Macshane, former Minister of State for Europe, has written:

“The TTIP will face new challenges as the anti-system MEPs who have been elected can make common cause across a left-right divide and in alliance with mainstream MEPs against a transatlantic trade agreement predicated on eliminating protections in national customs and practices in sensitive areas like health care or cultural and creative industries.”

What place for women in today’s film industry? The EU Audiovisual Observatory held a meeting on 17 May at Cannes “GIRLS JUST WANNA HAVE FILM”. Also in the Guardian

And visit the site for the European Women’s Audiovisual Network, who are launching the research needed to get the data to change EU policy

Getting culture into the UN’s Post 2015 Millennium Development Goals. Culture is much more than just an instrument for change. Diversity of creative work and the status of the artist is central to developing thriving, diverse societies.

UKCCD has joined IFACCA, Agenda 21 for Culture, ICOMOS, Culture Action Europe and others to campaign for targets on culture to be included. Sign our petition at

JULY 2013: Cultural Exception in the EU-USA Free Trade Agreement

Creators, cultural ministers and unions have mobilised in the key struggle to uphold the principle of a cultural exception in the forthcoming negotiations on the USA-EU Free Trade Agreement. The European Parliament has voted in favour by 381 to 191 against with 17 abstentions.

On Friday 14 June, the EU Council of Trade Ministers met and agreed to an”audiovisual exception” in the EU Commission mandate for negotiating a free trade agreement with the US. This is very good news.

This did not stop President Barroso responding and referring to those calling for an exception as “reactionaries”. A position he has since rolled back on.
Further more EU Trade Commissioner De Gucht continues to emphasise that he wishes to talk about audiovisual matters during the course of negotiations with the American administration.

This is without precedent. A EU Commission President and a Commissioner effectively challenging the will of the elected Ministers in the Council and elected MEPs.

In a press statement the European Coalitions for Cultural Diversity have responded:

The coalitions would like to express their thanks to governments and heads of States, to national parliaments and to the European Parliament who have, with great determination, endeavoured to win this victory for cultural exception. They are grateful to all personalities, filmmakers and artists who have mobilized themselves all over the continent to say NO to a Europe which would no longer support its culture and would abandon its identity to commercial interests only.

In this context, the coalitions are shocked to hear Commissioner De Gucht when he declares that he is ready and willing to open discussions on audiovisual with the Americans if they wish to do so. They strongly encourage him to fully respect the mandate that the States, which have complete democratic legitimacy, have given him and which formally exclude the audiovisual from the mandate. Should he wish to still discuss this, he will have to come back again in front of the European Council of ministers to obtain their authorization. Which is precisely what they denied him on June 14th.
Moreover, the coalitions are scandalized by the president of the European Commission, José Manuel Barroso’s statement this morning, calling those who support cultural diversity “reactionaries” and people “who do not understand the benefits globalization of exchanges represent”. They invite him to fully respect European democracy, of which States and the European Parliament are repositories, even when these institutions do not share his ideas. A great political leader should never depart from such a position.

After this victory for cultural diversity, the European coalitions urge the European Commission not to try and circumvent this democratic decision and to fully commit to it. This will mean to putting an end to suspicion and to the permanent re-questioning of the cultural policies adopted by the European Member States.

At a meeting of the Council of Ministers Trade Policy committee between Member State representatives on 24th May the European Commission succeeded in splitting support by proposing a compromise which would include cultural services in the mandate for trade negotiations with particular restrictions – “red lines”.
The red lines are:

1. The existing EU policies and instruments and corresponding measures at Member States’ level shall not be touched on during negotiations;
2. The existing national measures to regulate the audiovisual sector and support domestic and European content shall not be touched on during negotiations;
3. We shall maintain our ability to continue adapting and developing meaningful policies for cultural diversity, both at EU and Member States’ level.

The majority have been satisfied by these red lines and only 3 (France, Greece and Hungary) are still calling for a formal exclusion. Italy, Poland, Belgium, Romania and Bulgaria are seen as the countries that are most susceptible to changing their position to come back to the exclusion position.

By failing to exclude audiovisual services, audiovisual services will be covered by the chapter on services. The Commission’s red lines will have absolutely minimal weight in this context. And audiovisual services will be subject to the same horizontal elements as all other services. Whatever regulation exists will be observed but future policy for new services will be up for negotiation. Since so many developments on-line are in flux effectively the red line offers no protection. A definition will also be required of “ability to continue adapting and developing meaningful policies for cultural diversity” – and there will be considerable pressure to limit this definition.

This is a context where:

Google has 85 % of the search market
Google share of online video distribution is dominant through YouTube
Google has 87% share of online advertisting market
Amazon has over 70% of the ebook market in the EU (even higher in UK)
A small number of players enjoy dominance in the VOD market eg Netflix

This dominance gives these players the capacity to make the choice of film/tv programme catalogue, deliver distribution, control search
of online high value audiovisual content. Amazon in the case of books. Already the Netflix catalogue is overwhelmingly US content.
These players are at present subject to Art 13 of AVMS directive althought this has not been fully implemented as yet.

They are all lobbying the US administration, Member States’governments and EU authorities to include audiovisual in the negotiations in order to ensure that online audiovisual services are classed as “Information and/or commuication” and therefore not liable to any of the rules applied to traditional broadcasting. This would in effect rule out the EU revising the AVMS directive and fully implementing Article 13 which calls for online AV services to include EU films/programmes in their catalogues and to promote EU creative works online.

In effect inclusion of audiovisual services in the negotiations could lead to Member States and the EU no longer being able to draw up AV support programmes or legislative provisions to support the broadcast off and online of local programming.

UK policy persists in regarding the advances made by the European Union in regulating to support production, distribution, Public Service remits for broadcasting, proportionate contribution by large internet companies etc…as a francophone concern. In fact these policies underpin diversity of expression from which all UK citizens and creators have benefited, and the principle of sustaining diversity of expressions is one to which the UK Government has signed up under the UNESCO Convention, 2005 and through its membership of the European Union and its cultural strategies.

BSAC is in favour of the status quo which is to have an “audiovisual exception” for traditional film/broadcast services. Even this position is being ignored by the UK government.

APRIL 2013: Development Agendas and Artist Mobility

Commitment by the EU member states to maintaining levels of support for .07 of GDP level of funding for official development assistance (ODA) was confirmed by Andris Piebalgs, EU Commissioner responsible for Development. Confirmation still needed by EU Environment Ministers and the EU General Council but it is hoped that the FAC decision together with the fact that 85% of European citizens believe Europe should continue helping developing countries will be persuasive.
Culture and creative activity is still regarded instrumentally and rarely appears in the programmes of the European national development agencies, which is also evident in the current European strategy, Agenda for Change (2011). The significance of creative activity and diversity of expression to the development of strong citizenship and mutual understanding is still marginalised even where an economic case can be made.

Artists Mobility
There has been an open EU consultation on the Shengen visa system, infamous for the way it impacts on the mobility of artists and culture professionals particularly moving between North and South and vice versa. The obstacles third country national artists face when they try to enter the EU’s Schengen area, as well as the impact of the EU’s short-term visa policy to the culture sector (for the artists, artistic work and production, inviting organisations, cultural diversity, revenue, etc.) is well known but the response rate has been slim so organizations should be proactive.

Submissions closed on June 17th. To see report contact:

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