The EU's Audiovisual Media Services Directive (Directive (EU) 2018/1808; AVMSD) entered into force on 18 December 2018. It introduced "new rules for a level playing field" for TV broadcasters, on-demand service providers, as well as video-sharing platforms, regulated for the first time in the Directive. For more background on the key provisions of the AVMSD see our client alert here.
On 3 July 2019, the Hungarian Parliament adopted Act LXIII of 2019 on the amendment of certain Acts of the Parliament relative to media services (the Act). This omnibus Act amends three statutes: the Copyright Act, the Act on the Freedom of the Press and the Basic Rules Relating to Media Content (Press Act), and the Act on Media Services and on the Mass Media (Media Act). Video-sharing platforms, however, will be regulated in detail later, in the Hungarian E-Commerce Act.
Relative to the Copyright Act, the Act addresses the performers' collective rights management organization, the Bureau for the Protection of Performers' Rights (EJI). The EJI will no longer be entitled to deduct any administrative fees from the remuneration for repeated broadcast or transmission of a performance to the public after its initial broadcast.
The Act revised the terminology of both the Press Act and the Media Act. Under the new definition of "media service", media service providers must assume editorial responsibility for the programs they communicate to the public, not for the media service. Programs, in turn, will no longer have to be comparable to radio or television media services in form and content for editorial responsibility to apply, and their length will also be immaterial from now on. In addition, although both the Press Act and the Media Act use the term "editorial decision", neither define it. The Act inserts that definition into each, mostly by incorporating the AVMSD definition.
The Act also amends the conditions under which a media service provider will be deemed to be established in Hungary. The foremost change is that if the service provider first began its activity in Hungary and maintains a stable and effective link with the Hungarian economy, then neither the head office nor the place where editorial decisions are taken have to be in Hungary in order for the media service provider to be deemed to be established here. In such cases, not even the significant part of its workforce is required to work in Hungary. If Hungary and another Member State disagree on who has jurisdiction, the European Commission must be notified, which may request the European Regulators Group for Audiovisual Media Services (ERGA) to provide opinions on jurisdiction.
In addition, the Act prohibits the processing of minors' personal data collected or otherwise generated by media service providers in media services (either linear or on-demand) for commercial purposes, such as direct marketing, profiling and behaviourally targeted advertising.
The Act expands the obligations of the press under the Press Act. As before, media content must not be capable of inciting to hatred against protected groups. But this provision now also prohibits content that incites violence or that invites commission of terrorist acts. The rules on media content in media services that may impair the development of minors were also changed; the harmful effect no longer has to reach a "serious" level, and the same rules will apply to linear and on-demand media services. The Act specifies that measures to limit access must be proportionate to the potential harmful effect of the content.
Most of the amendments promulgated by the Act affect the Media Act. A fundamental change is that the Act removes the overall ban on product placement (or advertisements), and instead generally permits it. On the other hand, product placement will remain banned in: news and political information programs; programs for minors under the age of 14; programs reporting about official events occurring on national holidays; programs with religious or ecclesiastic content; and programs on consumer issues. Moreover, it will now be possible to interrupt programs for minors under the age of 14 in linear media services for minors with advertisements once every 30 minutes. The rules on the maximum duration of advertisements also will change. Between 6 a.m. and 6 p.m., and again from 6 p.m. to midnight, all advertisements aired may not exceed 20% of the respective time period; this restriction will not include neutral frames (neutral frames is a term defined in the Media Act. They are the frames that separate and allow the viewer to clearly distinguish when one type of audiovisual content ends and another begins). Similarly, the limitation on teleshopping to at most three hours per day also will be lifted. Some other changes include that European works must make up at least 30% (instead of 25%) of the programs made available per calendar year in the program schedule of on-demand audiovisual media services, and that commercial communications in media services may not discriminate on the basis of nationality.
Video Sharing Platforms – where are we?
The Act leaves many issues unresolved relative to video-sharing platform providers. The AVMSD clarifies that they are intermediaries or, more specifically, hosting service providers and thus do not bear editorial responsibility for the content made available. The AVMSD does not set out content or structure requirements for these service providers; their obligations merely cover the systematization of the content but not the content itself. While the Act contains some provisions relevant to video-sharing platforms, the bulk of the provisions regulating content issues will be included in the E-Commerce Act. The Act introduced key definitions such as "user-generated video", "video sharing platform service" and "video sharing platform service provider" (which may be any natural or legal person) into the Media Act but contains no provisions in which those defined terms are used. The Act also designates the Office of the National Media and Infocommunications Authority as responsible for the registration of video-sharing platforms and for supervising their compliance with applicable laws.