Germany’s forthcoming scrutiny of digital media gatekeepers

With a new Media State Treaty, the German regulator is taking a closer look at so-called digital gatekeepers that are mediating access to media content (search engines, smart-TVs, social media etc.). In order to safeguard plurality of public opinion, the German regulator imposes new obligations on these players, amongst others, of transparency and non-discrimination. Such digital gatekeepers established outside Germany should also take note of this new regulation, since this regulation may also affect such providers to the extent they direct their services at German users.

 

Background

Germany will replace its existing Broadcasting State Treaty (Rundfunkstaatsvertrag) by a new Media State Treaty (Medienstaatsvertrag, MStV). The regulatory aim of the Media State Treaty is not confined to linear transmissions in terms of traditional broadcasting (Rundfunk). Taking into account the convergence of media and the overall importance of on-demand content, the Media State Treaty will cover non-linear transmissions, irrespective of their technical distribution. In particular, the Media State Treaty will broadly regulate distribution via Internet through so-called telemedia services. This approach is not completely new. New is, however, the regulator’s focus on “digital gatekeepers”, namely telemedia service providers that are mediating access to media content. Examples of such gatekeepers are search engines, smart-TVs, voice control assistance, app stores or social media platforms. In the official explanatory statement to the Media State Treaty, the German legislator has highlighted that an important goal of the new Media State Treaty is to safeguard plurality of opinions, and thus, to safeguard equal access to journalistic-editorial content provided by such gatekeepers. The Media State Treaty categorizes these gatekeepers as media platform (Medienplattform), user interface (Benutzeroberfläche) and media intermediary (Medienintermediär). By introducing these categories, the German legislator goes actually beyond what Directive (2018/1808/EU) amending the Directive (2010/13/EU) on provision of audiovisual media services (AVMS) would require to implement into domestic law. Transposition of the AVMS Directive amendments has been one of the goals of the Media State Treaty. These amendments comprise, among others, the use of video sharing services, while they do not contain the newly adopted gatekeeper categories. The following gives a brief overview of these new categories, their potential impact on foreign providers and legal obligations that these categories might trigger.

 

Scope of application

The geographical scope of application of the new Media State Treaty is noteworthy as far as the aforementioned digital gatekeepers are concerned. Insofar Media State Treaty provisions are likely to also apply to companies established abroad. Pursuant to section 2 (8) MStV, the Media State Treaty applies to media intermediaries, media platforms, and user interfaces to the extent as they are targeted at German users, irrespective from the place of establishment of the respective provider. Such approach has been criticized due to a potential conflict with the state-of-origin principle enshrined, among others, in the E-Commerce Directive (2000/31/EC) and the AVMS Directive (2010/13/EU). The German legislator held in the official explanatory statement to the Media State Treaty that – in the absence of an EU-wide harmonization measure – such extended geographical scope of application is justified to foster media plurality and communicative equality in Germany. This reasoning is at least questionable. After all, it is not unlikely that EU courts will have a final say on the lawfulness of this geographical scope of application. Until then, the aforementioned gatekeepers will need to adhere with the respective obligations from the Media State Treaty, even if they are not established in Germany.

 

Media platforms

According to section 2 no. 14 MStV a media platform comprises any telemedia service, to the extent that it combines (i) broadcasts, (ii) other telemedia services resembling broadcasts (rundfunkähnliche Telemedien), and (iii) journalistic-editorial content, that displays content from printed press publications (“online press”), to form a new, comprehensive offer determined by the media platform provider (vom Anbieter bestimmtes Gesamtangebot). In the view of the German legislator, a media platform requires content from third parties. If a provider took editorial responsibility for all displayed content, such service would be deemed a telemedia service resembling broadcast, but could not be regarded as a media platform in this meaning. An example the German legislator mentions is an online media library from public broadcasters offering only own content on-demand.

Provided that the relevant thresholds are met (for example, cable-based media platforms with 10.000 and more connected households), media platform providers are subject to specific obligations, which should safeguard, inter alia, the aforementioned plurality of the public opinion. For this purpose, access to media platforms must be transparent and based upon non-discriminatory criteria. Moreover, media platform providers are obliged to disclose conditions that apply to content providers when sharing their content on media platforms. Hence, competent media authorities may request comprehensive information on remuneration and kickbacks applicable between content and media platform providers. Transparency obligations urge the media platform provider to disclose criteria to the platform user that apply for sorting, listing and presentation of content, and to state what impact user reviews have on the listings. Such transparency could probably be achieved by respective clauses in the platform terms of use.

 

User interfaces

User interfaces are defined as display or control elements of/for media platforms. User interfaces primarily govern the retrievability of content on media platforms. User interfaces encompass all forms of presenting content, which support the user in navigating through and selecting content. For example, voice assistance devices are covered to the extent they pursue such navigation and selection function of a user interface.

To the extent the user interface governs retrievability of media platform content (broadcasts, telemedia services resembling broadcast and journalistic-editorial content), obligations on transparency and non-discrimination also apply, which are quite similar to the ones imposed on media platforms. For example, within the user interface similar offers must be treated equally with regard to their sorting, listing and presentation, unless there is a valid reason for a differentiation. The Media State Treaty mentions permissible sorting criteria, such as alphabetical sorting or sorting via genres. Retrievability must not be unreasonably obstructed. Users must be able to find all offers in a non-discriminatory manner. The competent media authorities may impose specific obligations on the retrievability of certain private programs that have an important contribution on plurality of the public opinion. Such private offers will be determined up front by the competent media authorities.

 

Media intermediaries

A media intermediary comprises any telemedia service that also aggregates, selects and publicly presents journalistic-editorial content of third parties, without combining it to a new comprehensive offer (Gesamtangebot). The concept of media intermediary is a fallback in the event that the requirements of a media platform are not met. Pursuant to the official reasoning of the German legislator, this concept is to be interpreted broadly. The main delimitation line between media platform and media intermediary is the requirement of combining a new, comprehensive offer. Examples of media intermediaries mentioned in the legal reasoning of the German legislator are search engines, social networks, user generated content (UGC) portals, blogging portals or news aggregators. In addition, app portals could be seen as media intermediaries, if such portal cannot be categorized as new comprehensive offer. The wording of the Media State Treaty itself does not define this term of a new comprehensive offer. According to the German legislator, a relevant criterion to determine this term is to consider the terms respectively the restrictions applicable before content is published on a platform/portal. A new, comprehensive offer does not exist, where a platform provider allows third parties without any restrictions to publish their content on the platform. The official declaratory statement to the Media State Treaty mentions as an example in this context social media platforms. According to the explanations of the German legislator, if app stores regulate access to its store only by means of a mere control of (technical) functionality, the app store cannot be qualified as a new comprehensive offer, and hence, as a media platform. Similarly, search engines just provide an option to navigate through interesting/relevant content, but they do not have the final say on the selection of the content displayed. Such lack of final selection is a typical feature of a media intermediary in the view of the German legislator.

 

Possible difficulties to categorize digital gatekeepers

The explanations given in the legal reasoning of the new Media State Treaty already imply that the demarcation line between these categories may not always be easy to set. At the outset, the more control the provider has on content access, the more likely it is that such platform could qualify as media platform within the meaning of the Media State Treaty. However, the degree of control exercised is somehow difficult to determine and may depend upon the respective factual circumstances in each case. Furthermore, the question arises as to what actually constitutes own content. As stated above, showing only own content would fall outside the scope of this new gatekeeper regulation. If a platform for podcasts licensed in third-party content, which is still branded as third party content, would the proper licensing contract make such content qualify as own content? Or if a platform provider controlled user generated content before it is uploaded in order to check compliance with possibly criminal offenses (hate speech/defamation etc.), would this turn such platform into a media platform? As far as the aforementioned example of app stores is concerned, it remains unclear what is actually a mere control of (technical) functionalities and what goes beyond such control triggering a qualification as a media platform. Ultimately, the respective gatekeepers are subject to the Media State Treaty obligations only to the extent that they factually publish relevant content. For example, a platform may provide online press content to a certain extent only, and in addition, any content that is completely unrelated. Such mixed content within the respective gatekeeper will further complicate the application of the Media State Treaty for all parties involved. Guidelines from the media authorities will be useful in this context.

 

Outlook

The Media State Treaty will probably become effective within 2020 after all regional parliaments have ratified the final wording that has already been notified to the EU Commission. The ratification through the regional parliaments should actually be only a formality. As stressed above, not only German-based service providers, but also foreign providers may be subject to the digital gatekeeper regulations contained in this new Media State Treaty. Against this background, respective providers should be prepared to adopt respective measures in order to comply with these new obligations.