Legal Practice Briefing No. 26

Number 26

29 August 1996

EUROPEAN UNION DEVELOPMENTS

While the final section deals with trade developments,
this Briefing is principally devoted to the European Union's
efforts to achieve the benefits of what has variously been
called, amongst others, the 'Information Superhighway'
or 'Global Information Infrastructure'. As well as the
regulatory and technical aspects of mass market information
services implicit in names such as 'information superhighway',
the EU is also considering social and cultural changes
resulting from easy access to massive amounts of information.
The EU has called its approach as one of achieving the
'information society'.

Contents

The 'Information Society'
The Regulatory and Legal Framework
of the EU's Information Society

Intellectual Property
Privacy and Personal Data Protection
Security of Information Transfer and Encryption
Enforcement of Legal Rights
Consumer Protection
Competition Rules in the Information Society
Liberalisation of Communication Services
Broadcasting
Liberalisation of EU Telecommunications
In Brief
Australia EU Trade and Cooperation Framework Agreement
Proposed

New EU Strategy to Access International Markets.

The 'Information
Society'

In the second half of 1994 the European Commission issued
a communication which established four basic areas which
needed to be considered in order to enhance the transfer
of information electronically and thereby start the journey
to achieving the 'information society' in Europe. First,
it was recognised that the regulatory and legal framework
needed adjustment and enhancement. This necessarily involved
reconsideration of the rules concerning Intellectual Property
Rights (IPR), privacy, security of information transfers
and legal protection of such transfers, standards particularly
to enable interoperability of information systems, competition
and consumer protection rules. Second, telecommunication
and other networks and basic information services needed
to be liberalised while at the same time providing new
applications and content to be available over the networks.
Third, social and cultural aspects were to be considered.
Finally, EU promotional activities were necessary to encourage
individuals and economic entities to use and enhance the
benefits of the 'information society'.

This Briefing will focus on the first two areas, namely
the regulatory legal framework and liberalisation of communications
services.

The
Regulatory and Legal Framework of the EU's Information
Society

Intellectual
Property

Copyright

The EU countries, like Australia, are very active participants
in international copyright matters. The proposed extended
rights for authors of works and producers of films through
a protocol to the Berne Convention and a 'New Instrument'
to extend the rights of performers and producers of sound
recordings, in the World Intellectual Property Organisation
(WIPO), are two examples of the EU becoming involved in
extending rights to content providers for information and
entertainment networks. Both of these possible new treaties,
the Berne Protocol and New Instrument, are being largely
driven by the potential of digital technology to deliver,
without needing to make a hard copy, such things as access
to software, a recording or viewing of a video, music and
film. There is a real concern that the possibility of unrestricted
use through digital transmission of copyrighted material
on a mass scale could undermine the income of authors,
artists, computer programmers, performers, and music and
film producers. This could, in turn, diminish the effort,
imagination and investment which these people would be
prepared to put into their creations.

Currently in all EU countries there are rights granted
to creators of works and recordings, films and photographs
as well as to performers and broadcasters. The nature and
extent of these rights can however, vary considerably between
one EU country and another. The EU has tried to harmonise
many of the rights granted to creators of works, broadcasters,
performers etc. but this has proven so far, to be only
partly successful. Several directives have been adopted
by the Council of the European Communities to harmonise
copyright and related rights across EU countries. While
EU countries are obligated to implement these EU Directives,
compliance is incomplete.

The Directives are:

  • Legal Protection of Computer Programs91/250
  • Rental and Related rights92/100
  • Satellite Broadcasting Cable Retransmission93/83
  • Term of Protection1993
  • Legal Protection of Databases1996.

Extension of Copyright and Similar IP Rights

The Computer Programs Directive concluded in 1991 ensures
that computer programs are covered by copyright, and enables
the creator of software to prevent copying of the software
except for certain limited exceptions.

In the latter half of 1995, and in some EU countries
not until 1996, following the Term of Protection Directive,
new rules were introduced extending the term of protection
of copyright and similar IP rights. The main changes are:

  • increase in the duration of copyright in literary,
    dramatic, musical and artistic works of known authorship,
    to life of the author plus 70 years;
  • the term of copyright in films is now linked to the
    lives of the persons connected with a film and will only
    expire 70 years after the death of the last of those
    to die;
  • copyright duration concerning works of unknown authorship
    is increased to 70 years after the date on which the
    work is made, or if made available to the public during
    that period, from the date on which it is first made
    available;
  • rights in a performance are changed so that protection
    is available for 50 years from when the performance takes
    place or, if a recording of the performance is made available
    to the public within that time, for 50 years from when
    the recording is first made available; and
  • perhaps most importantly from Australia's point of
    view, there has been introduced provisions applying reciprocal
    duration of copyright and performers' rights in the case
    of works and performances connected with countries not
    members of the European Economic Area (EEA).

Databases

In order to encourage information exchange, in February
1996, an EU Directive done in March 1996 introduced an
exclusive right for database creators. Databases which
involved a substantial investment are now protected throughout
the EU for 15 years after they are first made available
to the public. This was thought desirable in order to protect
investment in time, money and effort, whether or not the
database itself was innovative. (Most other intellectual
property rights are granted for innovative or original
creations, no matter what level of effort or investment
the creation entailed.)

The European Commission expects that most services in
the 'Information Society' will be provided from an electronic
database and that many databases will have a major impact
on the creation of new multimedia products. Hence it was
considered essential for the EU to provide clear rules
on the level of protection for databases thereby encouraging
investment in their manufacture.

Under the new Directive, database manufacturers will
be able to prohibit the extraction and/or reutilisation
of substantial parts of the database by others. A legitimate
user of a database can however extract and/or reutilise
non-substantial parts of a database as well as:

  • extracting parts for the purposes of illustration for
    teaching or scientific research;
  • extracting and/or reutilising the database for the
    purposes of public security or the proper performance
    of an administrative or judicial procedure.

The Directive defines a 'Database' as 'a collection of
independent works, data or other materials arranged in
a systematic or methodical way and individually accessible
by electronic or other means'. The Directive also affirms
that databases which constitute the author's own intellectual
creation are protected by copyright, and that the rights
attached to the contents of a database are not affected
by the new Directive.

This new right in databases is only given to database
manufacturers who are EU nationals or residents, although
it may be extended to nationals of non-EU countries who
give equivalent protection to databases of EU origin. Currently,
this provision would largely exclude non-original databases
manufactured by Australian nationals.

Exhaustion of Intellectual Property Rights (IPR)

In order not to impede the free movement of goods, the
European Court of Justice has, over a number of years,
evolved a doctrine of 'exhaustion' of intellectual property
rights. According to this doctrine the owner of intellectual
property has the exclusive right to put their product on
the EU market for the first time (or determine who else
may do so), so as to allow them to obtain payment for the
product. However, with that single payment the owner's
right is exhausted. Probably the most important result
of this doctrine is that the owner of an IP right cannot
prevent a product already lawfully sold (with the owner's
consent) in one Member State of the EU from being imported
into another Member State of the EU. To do so would be
an unlawful exercise of the IP right. This doctrine is
not applied in the case of rental of sound recordings,
computer programs or films.

Privacy and Personal
Data Protection

The EU has recently introduced a new Directive on the
Protection of Individuals with Regard to the Processing
of Personal Data and on the Free Movement of such Data.
The aim of the Directive is to ensure EU-wide protection
of, most notably, the right to privacy. The protection
of personal information held by others is regarded as particularly
important as the European Union experiences an enormous
increase in the cross-border processing and flow of personal
data. Different regulations on the proper protection of
personal information in the EU countries has resulted in
difficulties and led to this harmonised set of rules on
the protection of personal data. Unlike in Australia, the
new Directive provides protection for personal data in
both the private and public sectors.

The transfer of personal data to Australia has been raised
as a business issue because of some European night-time
data processing in Australia, marketing of Australian business
in Europe and information required (for example, on employees)
for the running of a subsidiary business in Europe by an
Australian parent.

The EU Directive defines personal data as being:

'any information relating to an identified or identifiable
natural person who can be identified, directly or indirectly,
in particular by reference to an identification number
or to one or more factors specific to his physical, physiological,
mental, economic, cultural or social identity.'

The Directive applies to any processing of personal data
whether in manual files, computers or otherwise. The rules
apply however, only to manual files which are part of a
filing system ('any structured set of personal data which
is accessible according to specific criteria'). The rules
also apply to sound and image data, if the data relates
to a natural person who can be identified. If data is kept
for historical research only, certain provisions in the
Directive do not have to be complied with.

Data Flows to Australia

Under the Directive data may only be transferred to Australia
(or any third country) if Australia ensures 'an adequate
level of protection' of personal data. Whether this requirement
is satisfied would depend on the nature of the data and
the purpose and duration of the proposed processing operation,
the country of final destination of the data, any laws
in force in Australia and the professional rules and security
measures which are complied with in Australia (or other
third country). The EU countries and the European Commission
will notify each other of the countries considered not
to have a sufficient level of protection. Following an
EU decision to prohibit data flows, each EU country is
required to take measures to prevent transfer of data of
the relevant type to the third countries concerned. In
some restricted circumstances the data flow to such a country
may still occur when, for example, the transfer is necessary
for the transfer of money or the data subject has given
their unambiguous consent to the transfer.

Also, if a data controller gives sufficient guarantees
in respect of the protection of the privacy and fundamental
rights and freedom of individuals, an EU country may authorise
a transfer of personal data to a country which does not
ensure a sufficient level of protection (the so-called
'contractual solution').

Data Access Rules

Under the new Directive access to data by the data subject
is extensive. All data which is processed, and not only
the data which is held, is covered by the Directive.

The data subject has the right:

  • to information relating to the purposes of processing
    the data and the categories of data concerned
  • to the names of recipients or categories of recipients
    to whom the data is disclosed
  • to have all available information as to the source
    of the data
  • to be informed of the logic involved in any automatic
    processing of the personal data, and
  • to require that third parties to whom the data has
    been disclosed are notified of any rectification, erasure
    or blocking of the data which arises because of the incomplete
    or inaccurate nature of the data, unless this proves
    impossible or involves a disproportionate effort..

Security
of Information Transfer and Encryption

According to a European Commission Green Paper, the EU
needs to protect encrypted television and other services
from unlawful use or copying so as to allow an information
society to develop. It is envisaged that encrypted services,
such as digital television and video-on-demand, would be
accessed on payment of a fee. However, there is a growing
market in so-called 'smart-cards' and unofficial decoders
which allow viewing of services without payment. Different
laws to prevent piracy in different EU countries is preventing
the operation of a single European market, particularly
in encrypted TV services, so it is expected that proposals
will soon be put forward to prohibit:

  • the decoding of encrypted services without permission,
    and
  • the manufacture, sale, import, use, installation and
    advertising of unauthorised decoders.

New rules are also expected to provide for penalties
for breach, and payment for damages suffered by those whose
rights have been infringed. The European Commission has
already put forward at WIPO meetings EU agreed proposals
on the protection of encrypted services..

Enforcement of Legal
Rights

Defamation

In a recent case the European Court, when interpreting
the Brussels Convention on Jurisdiction and Enforcement
of Judgments, held that the victim of a libel by a newspaper
article distributed in several EU states may bring an action
for damages against the publisher either:

  • before the courts of the EU state where the publisher
    of the defamatory publication is established (which has
    jurisdiction to award damages for all the harm caused
    by the defamation), or
  • before the courts of each EU contracting state in which
    the publication was distributed and where the victim
    claims to have suffered injury to his reputation (which
    courts have jurisdiction to rule solely in respect of
    the harm caused in the state seized). The European Court
    also held that the criteria for assessing whether the
    event in question is harmful and the evidence required
    of the existence and extent of the harm alleged by the
    victim of the defamation are not governed by the Brussels
    Convention but by the substantive law determined by the
    national conflict of laws rules of the court seized of
    the matter. This decision might lead to forum shopping
    in EU cross-border defamation cases.

Injunctions and Damages

Generally EU legal advisers take the view that, under
the Brussels Convention on Jurisdiction and Enforcement,
it is normally best to sue an infringer of a legal obligation
in the infringer's place of establishment in order to get
an injunction and damages covering the whole of its infringing
activities in the EU. In some circumstances however, there
may be procedural advantages in applying for interim injunctions
in countries where prompt relief is available, or in choosing
to litigate a test case in a country which decides the
issues of validity and infringement together, or which
has (or does not have) provisions for discovery, inspection
and cross-examination of witnesses. In a case involving
transfer of information electronically (for example, via
the Internet) it may be best to initially take action for
injunctive relief in the country where the network provider
is situated.

Counterfeit and Pirated Goods

To enhance the rules governing the prevention, seizure
and destruction of goods which infringe IP rights, (for
example, unauthorised copies of copyright goods and false
trade mark use) the EU Member States, during the second
half of 1995 introduced new rules for Customs authorities.
The holder of an IP right, or an authorised user, can now
directly request Customs authorities to intercept consignments
of suspected counterfeit goods. Such requests can now be
made in respect of:

  • goods infringing copyright or design rights
  • goods bearing unauthorised trade marks as well as the
    trade mark or Logo itself, and the packaging
  • moulds and matrices used to manufacture counterfeit
    goods
  • goods in transit and exports.

These new rules do not apply to goods of a non-commercial
nature contained in personal luggage.

Consumer Protection

The EU rules on consumer protection are becoming more
relevant as more consumers use the global electronic infrastructure,
which currently is essentially the Internet. For example,
the EU Unfair Contract Terms Directive, implemented in
most EU countries during 1995, provides that a contractor
cannot by simple reference to a notice (including one on
an Internet Web site) exclude liability for personal injury
or death. Indeed such a notice excluding any other liability
is valid only if reasonable.

In cross-border credit transactions the EU is including
in its proposals that consumers may be given information
by electronic means. Other provisions make an assumption
that information in electronic form is or can be equivalent
to information provided in writing. These provisions ought
to make the conduct of electronic commerce easier.

The Distance Sales Directive, expected to be adopted
very soon, applies to contracts concluded by means of communication
at a distance this would include electronic mail and teleshopping,
as well as sales via an Internet Web page. The Directive
imposes obligations on a supplier to provide certain information
before a contract is made and to provide written confirmation
of the contract. There is a seven day cooling-off period
in which the customer can repudiate the contract.

Comparative Advertising

The EU Council has agreed on proposed changes to the
rules on comparative advertising so that advertisers can
compare their products with those of their competitors,
so long as they do not mislead the public nor denigrate
other producers. In many EU countries the combined effect
of trade mark law and unfair competition law has effectively
prohibited comparative advertising. The differences in
advertising rules was considered to be an impediment to
sales and competition within the EU single market.

Competition Rules
in the Information Society

The European Court has recently limited the extent to which
copyright owners can exercise their exclusive rights. A copyright
owner cannot exercise exclusive rights in order to reserve
for itself a monopoly in a secondary market. The most prominent
case of this was an attempt by Irish TV broadcasters to prevent
publication of their listings in a new comprehensive weekly
television program guide. The European Court upheld a European
Commission decision forcing the TV stations to provide their
listings in a non-discriminatory manner so that they did
not amount to an abuse of their monopoly position.

The European Commission has been quite active in enforcing
the EU competition rules in the information services sector.
The Commission has the power to approve agreements having
benefits which outweigh distortions of competition in the
EU. It can also fine undertakings which restrict competition
in trade between the EU countries and often orders companies
to cease anti-competitive activities. The European Commission
can also prevent mergers and acquisitions which would create
a dominant position on the EU market.

Recent prominent examples of exercise of the competition
rules to enhance the free movement of information in the
EU include:

  • the declaration by the European Court that resale price
    obligations placed on book sellers in the UK and Ireland
    by publishers are unlawful because they restrict competition
    (the 'Net Book Agreement'). The European Commission is
    also examining a similar agreement between German and
    Austrian publishers.
  • the exemption by the European Commission of certain
    types of patent and know-how licensing agreements from
    the competition rules, but only so long as such agreements
    comply with strict provisions set out in the so-called
    'block exemption' Regulation on technology transfer.
  • the approval of Viacom's and Bear Stearns joint venture
    in German language cable and television distribution.
  • the investigation of Microsoft's pricing practices
    for software to be supplied with PCs made in different
    parts of Europe. There was also a suggestion that the
    Commission may investigate Microsoft's new global on-line
    service which seems to be largely designed to compete
    with the Internet.
  • the investigation of an on-line services alliance between
    America On-line/Bertelsmann and Deutsche Telekom which
    already has a dominant position in the German on-line
    services market. America On-line is the US market leader
    and Bertelsmann has a dominant position in the German
    and European publishing market.
  • the European Commission's approval of the acquisition
    of LPI Ltd., a company which develops on-line services
    for travel agents, by a joint venture between Thomas
    Group Travel, Leisureplan and Philips Media.
  • the approval by the Commission of the merger by Seagate
    Technologies and Connor Peripherals of their manufacturing
    operations of hard disk drives and other information
    storage devices. The Commission decided that the two
    parties market share was low and that competition in
    the sector was strong.
  • the Commission's rejection of a proposed joint venture
    between three Dutch television channels since a dominant
    position would be created. The Commission has said it
    was prepared to consider other proposals which have less
    of an impact on the market.
  • the investigation into the joint venture between Burda,
    Matra-Hachette, Pearson and the USA based Meigher Communications
    and Interchange On-line Network to form Europe On-line.
    The Commission is concerned that Europe On-line should
    not be anti-competitive or restrict technological developments
    in the on-line services market before the market develops.
  • the examination of a proposed alliance between BSkyB
    (of the Murdoch group), Bertelsmann of Germany and France's
    Canal + (of the Havas group) to establish a series of
    digital TV channels throughout Europe.

It appears that one of the main concerns of the European
Commission for on-line services is whether dominant infrastructure
and network providers should be permitted either to obtain
material from content providers on an exclusive basis,
or to contract with service providers on an exclusive basis.
The fear is that exclusive arrangements would enable dominant
operators to stifle competition.

Liberalisation
of Communication Services

Broadcasting

The regulation of broadcasting is having a significant
impact on the Information Society in Europe. Most, if not
all, EU countries include in their definition of broadcasting
any transmission of programs for reception in two or more
locations, whether for simultaneous reception or by request
of users of the broadcast service. A program is considered
to be anything which is wholly or mainly of moving representational
images, (so it does not include a program mainly of text).
This wide definition includes video-on-demand, home shopping
and even videophones although it seems that most EU countries
make an exception for videophones.

It is likely that on-demand services with educational,
entertainment and information content with frequently updated
programs, will be widely available in Europe in the not
too distant future. As broadcasting rules of each EU country
are different, the European Commission has made proposals
on which rules apply to general broadcasting and on-demand
services and the restrictions which can be placed on providers
of such services.

It will be noted that the current Broadcasting Directive
already requires that each broadcaster shall be subject
to the legislation of a single EU Member State which is
responsible for ensuring the broadcaster's compliance.
Each EU Member State must ensure freedom of reception and
retransmission on their territory of broadcasts under the
jurisdiction of another EU Member State.

In new proposals accepted by the EU Council, broadcasters
offering home shopping and other interactive or on-demand
services will be bound by the law of the EU country where
the broadcaster is located, even if its broadcasts are
received elsewhere. Home shopping and advertising time
will be subject to controls on the length and frequency
of such services/features. Home shopping programs will
be considered as advertising so that they are subject to
the time limits on advertising during any one hour period
of broadcasting. Channels devoted exclusively to home shopping
will, however, have different rules applicable and in certain
circumstances shopping slots of up to three hours per day
will be allowed to specific broadcasters. The proposed
Directive also has provisions on protection of minors and,
more controversially, minimum European program content
requirements.

At least in the UK it has been recognised that the regulatory
regime for telecommunications and broadcasting is becoming
ill-equipped to address mass market on-line services. Late
in 1995, OFTEL (the UK's telecommunications regulator)
published a consultative document entitled 'Beyond the
Telephone, the Television and the PC' (Available on the
Internet at http://www.open.gov.uk/oftel/multi.htm). This
document considered many of the regulatory issues in the
UK for what it called 'broadband switched mass market services'.
Most of these issues apply equally throughout the European
Union.

Liberalisation
of EU Telecommunications

The European Market

The market for telecommunications in the EU is changing
dramatically, largely in response to changes in the regulatory
regimes in the EU designed to liberalise the telecommunications
infrastructure and provision of services throughout Europe.
Considerable growth has been achieved in mobile telephony,
as well as business communications through email and the
Internet. Major regional and global alliances have been
established not only by traditional suppliers of telecommunications
services but also by utilities and cable companies. Examples
include British Rail Communications in the UK, the Flemish
cable companies in Belgium and cable and steel companies
(Veba Thyssen) in Germany. At the same time former monopoly
suppliers like Deutsche Telekom and British Telecom are
facing competition in many sectors and have or are being
privatised or, in the case of France, Ireland and Italy
are now corporatised.

The Regulatory Framework

The EU's Regulatory Framework designed to liberalise
the telecommunications market is based on three principles:

  • liberalisation of areas under monopoly control
  • open access to networks and services
  • case by case application of the EU's competition rules.

A related issue which has also been dealt with by the
European Commission is the protection of personal data,
the uncontrolled transfer of which threatened to disrupt
the interconnection of telecommunications networks in the
EU. This issue of personal data protection has already
been discussed (see pages 45).

Liberalisation in Stages

Liberalisation of telecommunications has occurred in
four stages. The first stage, in 1988, broke the telecom
monopolies hold over the supply of terminal equipment such
as phones, fax machines, office switchboards etc. In 1990,
stage two liberalised the supply of value-added services,
data communications (including on-line services), and voice
and data services for corporate networks and closed groups
of users. Stage three, in 1994, opened the market to competition
in the provision of satellite services and equipment. The
final area to be liberalised from monopoly supply by national
telecommunications carriers is voice telephony. It has
been agreed that on 1 January 1998 there will be full liberalisation
(that is, opening to competition) of all voice telephony
services for the public and of network infrastructure in
the EU, subject to possible derogations of up to five years
for Greece, Ireland, Portugal and Spain and two years for
Luxembourg. The liberalisation of voice telephony services
could have a real impact because of the ability of data
service providers to transmit voice by data packets for
the cost of a local telephone call, as well as provide
on-line services. Equally, cable TV operators will be able
to use their networks to do the same.

The liberalisation of telecommunications in the EU has
led to enhanced use of cable and mobile networks. Under
the EU's liberalised regime cable TV networks may provide
capacity for the purposes of liberalised telecommunications
services. This is potentially very important for interactive
on-line services. Mobile network operators can now use
any type of already existing infrastructure (for example,
own microwave links, cable TV networks of third parties,
etc). Indeed the introduction of competition in mobile
communications has been very successful and represents
the most rapidly growing and competitive sector in European
telecommunications. One outcome of liberalisation is development
of the EU's system of GSM (Global System Mobile) which
has been adopted in Australia.

It might also be noted that at the same time as these
liberalisation measures were introduced, the EU Member
States were required to separate their telecommunications
regulatory activity from the operational activities of
the public telecommunications operators/companies. Many
EU Member States now have an independent regulatory authority
similar to Austel..

Opening Access to Networks and Services

A common regulatory environment in Europe and minimum
standards for particular services and technologies is regarded
as essential to achieving the 'Information Society'.

The ability of users of infrastructure both to access
adequate transmission capacity and to access services at
an affordable price on fair terms; and also for service
providers to interconnect with a competitor's network,
has been recognised as fundamental to enable EU businesses
or service providers to provide and/or use liberalised
telecommunication services. To achieve these ends the so-called
'Open Network Provision (ONP)' rules were put in place
together with specific EU Directives on leased (private)
lines and voice telephony services which applied ONP rules
to these services.

There is currently a proposal for an EU Directive applying
open network provision principles to interconnection of
networks. The idea is to provide a regulatory framework
for ensuring fair and non-discriminatory interconnection
for all operators and service providers in the EU. There
are four main ways in which this is expected to be achieved:

  • commercial negotiation will be the main means of achieving
    fair terms of interconnection but with effective dispute
    resolution procedures at the EU Member State level and
    conciliation procedures at the European level
  • an obligation to grant or a right to obtain interconnection
  • transparency of interconnection terms and prices and
    relevant underlying cost calculations
  • additional obligations on organisations providing public
    telecommunications networks and services, and which have
    significant market power.

The European Commission has also moved to define the
principal elements of universal service in the EU. It is
this universal service which will be the minimum requirement
for holders of a comprehensive service providers licence.
Although not yet finalised, it is expected that some licence
holders will pay other (dominant) service providers to
provide the universal service obligations under a licence.
Universal service is most commonly defined as being the
delivery at an affordable price to every customer reasonably
requesting it:

  • of access to a network providing a defined voice telephony
    service, and
  • the capability of using a fax, and
  • most importantly, from the point of view of the information
    society, of connecting a computer modem to access on-line
    information services for low speed data services.

Convergence of Mobile and Fixed Network Systems

The convergence of wired and wireless (mobile) technologies
providing similar or the same services has led to development
of a regulatory framework which is largely technology neutral.
The recent EU Directives on interconnection of telecommunication
networks and licensing, apply equally to both mobile and
fixed network operators. However, a specific Directive
on mobile telecommunications, already mentioned above,
removes all remaining monopoly rights in the mobile sector.
In addition, this mobile Directive enables a mobile operator
to interconnect with other mobile operators as well as
enabling the construction of its own infrastructure/microwave
links (or connection to use those owned by third parties).
There is also now a requirement that at least one DCS 1800
operator be licensed in each EU Member State after 1 January
1998, as well as an immediate requirement to licence DECT
(Digital European Cordless Telephone) systems.

Case by Case Application of the EU Competition Rules

The European Commission published guidelines in 1991
on the application of the competition rules to the telecoms
sector. The merger control rules have also been used to
prevent operators or service providers from forming alliances
which could distort the telecommunications or information
market or inhibit competition. The forming of ever larger
telecommunication alliances which could dominate the EU
market or smaller EU Member State markets has been the
subject of regulatory constraints on a number of occasions
by the European Commission. Most of the more important
recent approvals or prohibitions are set out in the section
on 'Competition Rules in the Information Society'.

Although these comments on the EU's competition rules
generally apply, some commentators have noted a certain
flexibility in interpretation of the EU competition rules
in the telecommunications sector. It is argued that the
competition rules have been relaxed by the European Commission
in exchange for political acceptance in key EU Member States
to open-up competition in their telecoms markets. This
is believed to have occurred before the European Commission
would approve a strategic alliance between the respective
public telecommunications operators of France and Germany.

Directories

In a related development, the EU Council has recently
approved liberalisation of telephone directories. Publishers
and suppliers of directory services must be given access
to information contained in public directories under equitable
and non-discriminatory conditions. In France, telephone
directories are already on-line through the Minitel system
and Germany has just released a relatively cheap CD version
of its directory.

In
Brief

Australia EU Trade and Cooperation
Framework Agreement Proposed

The European Commission has proposed an agreement with
Australia to give a legal and contractual framework to
Australia's trade and cooperation with the EU. A political
declaration on justice, home affairs and political cooperation
will accompany the agreement. The proposed agreement is
expected to be similar to those between the EU and other
OECD countries.

The proposed agreement will be on a non-preferential
basis, given both parties membership of the World Trade
Organisation (WTO). The aim is to enhance trade, investment
and industrial development between the parties. (It will
also allow the European Commission to have a specific budget
allocation for relations with Australia). Areas expected
to be in the proposed agreement are cooperation on competition
matters, consumer protection, exchange of statistics, training
and education etc. It will be remembered that Australia
already has specific agreements with the EU on science
and technology, on wine and on uranium as well as a number
of understandings on various agricultural products.

EU negotiations with Australia for the Framework Agreement
are expected to commence immediately. Once the scope of
the proposed agreement is finalised and it comes into force,
a joint committee will monitor developments under the agreement.

New EU Strategy
to Access International
Markets

In February this year the European Commission adopted
a paper entitled 'The Global Challenge of International
Trade: A Market Access Strategy for the European Union.'
One of the aims of the paper is to set out a list of all
the existing obstacles to trade with third countries and
to attack the most difficult and persistent of them.

The principal measures to be taken to achieve greater
market access for EU enterprises are:

  • to identify obstacles to trade and establish priorities.
    A database will be established which would be available
    on-line to all interested parties in the EU.
  • to improve coordination within the European Commission
    by setting up an action group on market access. This
    action group will deal with enquiries from business and
    enhance coordination between the various Directorates
    of the Commission which deal with trade policy issues.
  • to involve industry more closely with the work of the
    European Commission, mainly through individual firms
    and trade associations providing the Commission with
    information on trade obstacles. (This information would
    remain confidential.)

It seems likely that one of the main mechanisms which
will be used to force market access in non-EU countries
is the so far little used Regulation (introduced in 1994)
designed to ensure the exercise of the EU's rights under
international trade rules.

ISSN 1448-4803 (Print)
ISSN 2204-6283 (Online)

The material in this briefing is provided
for general information only and should not be relied
upon for the purpose of a particular matter. Please contact
the Legal Practice before any action or decision is taken
on the basis of any of the material in this briefing.

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