By: Pontus Sörlin
Share This Post
Changes for improved cross-border access to radio and television programs in Sweden
Changes to improve cross-border access to radio and television programmes
The Riksdag has introduced new provisions in the Copyright Act (URL) and the Mediation Act (MedL) regarding broadcasting and licensing of radio and television programmes.
The legislative amendments have been implemented to implement Directive 2019/789 of the European Parliament and of the Council (the Directive), which aims to improve cross-border access to radio and television programmes within the European Economic Area (EEA).
As regards the legislative changes made, a new country of origin principle has initially been introduced, which is intended to make it easier for broadcasters to acquire the rights necessary to carry out a broadcast.
Furthermore, the provision on a contractual licence for retransmissions in the URL has been reformulated.
The new wording shall clarify that retransmissions are covered by the provision in principle regardless of the type of technology with which they are carried out. An extended possibility has also been introduced for market parties to have a mediator appointed to contract negotiations on the retransmission of radio and television programmes.
Finally, a completely new provision on so-called direct injection has been introduced into the URL.
The government’s bill that prompted the changes was met with mainly positive criticism from the referral bodies.
Copyright in Sweden
Copyright is the right of writers, composers, artists and other authors to their works.
Any creative activity that achieves a certain degree of originality is covered by copyright and, in the case of recent legislative changes, radio and television programmes are mainly relevant.
In Sweden, copyright is regulated primarily in URL.
According to URL, the creator of a work owns the economic and non-profit rights to that work.
Economic rights are an exclusive right to produce copies of the work and to make it available to the public.
Only the author may use a work in a way that infringes economic rights.
The non-profit rights mean, on the one hand, a right for the author to be stated when his work is made available to the public and, on the other hand, a right to oppose certain modifications and uses of the work.
A work may have several authors and copyright may, inter alia by contract, be transferred to new rightholders.
Consent for use that infringes the financial rights of a rightholder may either be obtained directly from the holder or based on the provisions on a license in the URL.
If the consent is based on a license, agreements are made with a management organization instead of the rightholder.
A new country of origin principle has been introduced
In order for a broadcaster to broadcast a copyrighted work, it must first obtain the copyright holder’s consent.
Obtaining such consent is called “clearing a right”.
The general principle of copyright is that rights should be cleared in the country where the copyright relevant action takes place.
In the past, the copyright-relevant measure for broadcasting radio and television programmes has been considered to take place in each country where the broadcast is made.
The rights have thus had to be clarified in each country where the programme is broadcast, which has meant a cumbersome and time-consuming system for broadcasters.
Instead, the directive provides that the copyright-relevant measure for radio and television programmes takes place in the country where the broadcaster is principally established.
In the future, companies will thus only have to clear rights in that country, which should lead to more programmes being offered across borders within the EEA.
The new country of origin principle is now also included in the URL.
Factors which, according to the Directive, can be observed in order to determine the location of the main establishment include the location of the company’s head office, management and administration.
The registered office registered by the undertaking shall therefore not necessarily be to be regarded as the actual registered office.
The new principle applies to radio programmes and certain television programmes available in what is referred to in the Directive as ‘ancillary online services’.
According to the draft law, the term is to be interpreted as referring to internet services provided or controlled by companies.
The television programmes covered are news and current affairs programmes and their own productions, but not sporting events.
What is meant by news is not clearly defined in the directive.
In the draft law, based on the Court of Justice’s interpretation of the concept in a similar context, the Government states that these should be events of public interest when they are reported.
Examples of the proposal for topical programmes that should not be seen as pure news programmes include debate programmes.
For example, entertainment programs that address events of public interest should not be considered as news and current affairs programs, according to the government.
According to the directive, own productions are programmes produced and financed by a company.
The financing requirement must be considered fulfilled even if the financing comes from public funds, so in Sweden the productions of public service broadcasters are also covered.
It is not clear from the directive whether the development of the programme content, i.e. the programme idea, should also have taken place with the company’s resources.
The Government therefore states in the proposal that it will be a matter for the application of the law to decide.
The directive does not ensner the new country of origin principle to affect the freedom of contract of rightholders and broadcasters.
Thus, there has been no obligation for companies to offer materials in different countries, although the purpose of the amendments is to simplify cross-border access to programmes.
Compensation to rightholders is also regulated by the Directive.
According to the Government’s interpretation of the Directive, the remuneration must be fair and proportionate to the economic value of the broadcaster’s use of the material.
Examples given in the directive of factors that may affect remuneration are how long the programmes are available online, what language versions exist and how large the audience is.
Clearance of retransmission rights
Retransmission means that works and other protected performances included in a primary radio or television broadcast are retransmissioned, simultaneously and unchanged, to a new audience.
Unlike an original broadcast carried out by a broadcaster, a retransmission is generally carried out by a cable television operator.
In a Swedish context, for example, it may be SVT that makes the original broadcast while ComHem conducts a retransmission.
Most forms of retransmission are covered by the Directive.
However, online retransmission is only covered if it takes place in a ‘controlled environment’, or in a manner agreed between rightholders and forwarders.
“Controlled environment” means ensuring protection against unauthorised use.
Such protection can be guaranteed by transferring content over managed networks, such as cable networks or closed IP-based networks where the content is encrypted.
Previously, the URL stated that retransmission could take place wirelessly or by cable.
Cable was intended for any form of physical conductor, which is in principle the same as the ‘managed networks’ covered by the Directive.
In practice, the meaning of the provision in the URL was thus the same as in the directive.
However, according to the government’s assessment, the wording in the URL gave the impression that it was referring to consignments other than the directive.
The wording “wireless or cable” has therefore been removed from the URL even though the change does not entail any substantive change to the provision.
As regards the original broadcast, according to the previous contractual licensing provision in the URL, it would be made wirelessly.
However, there is no such restriction in the Directive, which is why the requirement for an original wireless broadcast has also been removed from the Swedish provision.
Many different categories of authors may have rights in broadcasts.
These include broadcasters, producers, actors and photographers.
Just as the rights to carry out an original consignment have to be clarified, the same applies to retransmissions.
Since it may be difficult to come into contact with all authors, the directive provides that rightholders must be represented by collective management organisations to which operators can turn.
The operator can then conclude a license agreement with the association in order to carry out the retransmission.
It is also possible for holders not affiliated to a management organisation, so-called outside rightholders, to provide works to operators.
The rules of the Directive briefly mean that the organisation that manages rights in a given category and within a particular country also provides rights for the outside holders.
Where more than one organisation manages rights in the same category, it is up to the Member State to decide which of the organisations may exercise that right.
The system of management organizations is already in the URL.
However, according to the Swedish model, more than one organization per area can reach licensing agreements and the Swedish state has not decided which organizations should have contractual competence.
This has been criticised by several referral bodies who believe that competition concerns may arise.
However, the government’s assessment is that in most areas it is clear which organisations are competent and that there should therefore rarely be problems, therefore no changes have been made to the provision on licences for retransmission in URL.
In the case of online retransmissions not covered by the Directive, it is up to market parties to decide whether or not to use the system of management organisations.
Obligation to negotiate in accordance with good business practice and the right to mediation
The URL then stipulates before the implementation of the directive that anyone wishing to retransmission by cable has a right to negotiate with holders of the material.
The directive does not contain a corresponding right to a hearing, but provides that negotiations that have been initiated shall be conducted in good faith, or ‘good faith’ in the English language version.
According to the government’s interpretation, the provision should mean that the parties should contribute as much as possible to the reach of an agreement at negotiation; a provision for negotiations to be conducted in accordance with ‘good business practice’ has therefore been introduced into the URL.
The requirement to open negotiations remains but applies only to the type of retransmissions covered by the Directive, in other cases it is up to the parties to decide whether they wish to negotiate.
Even when the parties choose to negotiate even though there is no requirement, the requirement of good business practice shall apply.
The Directive also requires Member States to ensure that parties have the right to request assistance from mediators if they fail to reach an agreement in the negotiations.
The possibility to request support from mediators is governed by MedL in Swedish law.
However, the law previously only covered disputes regarding cable retransmission and has therefore been updated to apply to all types of retransmissions.
Broadcasting of radio and television in the case of live injection
Direct injection is a specific type of technical process used to transmit radio or television broadcasts.
Instead of broadcasting a program directly to the public, the company provides the signal to an operator who sends it to the public.
If this is done without the undertaking simultaneously carrying out a broadcast directly to the public, the Directive shall be deemed to have a single transmission.
Both the broadcaster and the operator shall be deemed to be involved in that transfer and must therefore also clear its rights.
The fact that the provision only covers situations where the company does not simultaneously transmit the same content to the public is due to the fact that it is instead a retransmission.
All rights protected by Union law shall be subject to the direct injection regulatory framework.
The purpose of the provision is to ensure that rightholders receive adequate remuneration for their works and performances.
Since the situation has not previously been regulated by Swedish law, a completely new provision on direct injection has been introduced in the URL.
However, although both operators need to clear rights, no new provision has been introduced regulating the actual clearance in the URL.
Since direct injection does not occur on the Swedish market, the government cite in the bill that the lack of regulation should not lead to problems.
However, there is a general provision on a contract license in the URL that the government believes can be applied if direct injection starts to occur.
This has been met with criticism from more referral bodies who have argued that the Swedish market is in a very changing phase and that a system of rights clearance should therefore be introduced as a preventive measure.
The government’s response to the criticism in the council’s proposal is that there should be no impediment to the use of the general licensing provision.
Expected consequences and criticism
The Government believes that the changes should lead to reduced transaction costs for rights clearance among broadcasters and certain operators.
It is also believed that the new rules will mean increased choice for consumers.
The changes are also expected to lead to new licensing opportunities and thus increased revenues for rightholders.
Since it is to be introduced the possibility of having mediators appointed for retransmission using technologies other than cable, the processing costs of the Patent and Market Court, which receives mediation applications, can be expected to be slightly higher.
Otherwise, the Government considers that the new rules should not lead to increased costs for either the State or private operators.
The reception among the referral bodies regarding the legislative changes has been overwhelmingly positive.
The criticisms made have been moderate and mainly stem from the idea that certain rules can be made clearer.
However, after receiving the criticism, the Government still considers that the new rules are sufficiently clear.