EC Looks To Regulation Of Digital Economy With New Study

by Ulrika Lomas, for LawAndTax-News.com, Brussels

07 February 2007

Self- and co-regulatory models can be attractive alternatives to traditional regulation, according to a study for the European Commission presented on Tuesday, on the occasion of Europe's 'Safer Internet Day'.

"For the media and Internet industry to flourish responsibly, the regulatory framework needs to strike the right balance between fairness and firmness while still allowing industry to respond quickly to change," observed Information Society and Media Commissioner Viviane Reding.

She continued:

"This study underlines my firm belief that self-and co-regulation offer very real alternatives to traditional legislative approaches in the media sector today. Where such self- and co-regulatory models are credible and efficient, the European Commission will encourage their use, in particular for the online environment. This is the spirit included also in the provisions of the European Commission's proposal for modernising the Television Without Frontiers Directive, which I expect to be agreed between European Parliament and Council in the months to come."

According to the EC, particularly in the digital economy, driven by rapid technological change and enhanced user control, traditional regulations are finding it difficult to keep up with the speed of technological, economical and social changes, and the problem of decentralised information. Traditional regulatory approaches may also suffer from enforcement problems.

The European Commission therefore views self- and co-regulation as a way to achieve better regulation, an important goal of the Barroso Commission. Self regulation, where industry regulates itself, and co-regulation, the combination of state and non-state regulation, will help cope with the increasing risk of failure of traditional approaches, and will hand back responsibility to society and interested parties where appropriate.

The study on co-regulation measures in the media sector was undertaken for the Commission by the Hans-Bredow Institut for media research, at the University of Hamburg, in cooperation with the Institute for European Media Law in Saarbrücken, and was presented yesterday in Brussels. It concluded that, in general, industry needs sufficient incentives to support such a regime.

Having a state run regulator in the background often gives self-regulatory bodies the power they need to work effectively. In addition, sufficient means to enforce regulations, such as adequate and proportional sanctions seem to be necessary for a co-regulatory system to be workable.

Transparency and openness were also found to be vital to build trust in the mechanisms, particularly where non-State organisations are responsible for regulating, or where interest groups are not involved.

The study examined the different approaches to co-regulation already active in different countries for two important sectors (the protection of minors, and advertising), and found that there was no reason to assume that these were insufficient for implementing European directives.

Self- and co-regulation are therefore explicitly encouraged by the European Commission in the proposed modernisation of the "Television Without Frontiers" Directive, currently being debated in the European Parliament and Council.

The text of the proposed Directive is the first legislative proposal from the Commission related to the media sector where such an explicit reference to self- and co-regulation is made.

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