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Challenges Facing Sports Event Organisers in the Digital Environment

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Challenges facing sports event organisers in the digital environment European added value assessment STUDY EPRS | European Parliamentary Research Service European Added Value Unit PE 654.205 – December 2020 EN Challenges facing sports event organisers in the digital environment European added value assessment This European added value assessment (EAVA) investigates whether the current EU legal regime provides sports events organisers and their licensees with an adequate level of protection against the risk of online sports events piracy. It also attempts to measure the scale of the EU added value that could be achieved through a coordinated EU response. The failure of the EU to take action could result in additional burdens on economic operators. Moreover, not addressing these barriers and the associated legal uncertainties hamper the completion of the digital single market. The study underpinning this EAVA identifies gaps and barriers in the current legal framework and presents policy options – and their associated legislative tools – that could potentially tackle them. EPRS | European Parliamentary Research Service AUTHORS Lauro Panella, European Added Value Unit, DG EPRS with Matteo Firrito, trainee in the European Added Value Unit. The European Added Value Unit would like to thank its trainee Matteo Firrito for his work in providing the first draft of this report, later revised by Aleksandra Heflich and Lauro Panella. This paper has been drawn up by the European Added Value Unit of the Directorate for Impact Assessment and European Added Value, within the Directorate-General for Parliamentary Research Services (EPRS) of the Secretariat of the European Parliament. The legal analysis that is annexed to this European added value assessment was written by Prof. Paolo Marzano, Gabriella Rubino and Francesca Cordova of Legance – Avvocati Associati and by Andrea Giulia Monteleone, assistant researcher at LUISS Guido Carli University, at the request of the European Added Value Unit (EPRS). To contact the authors, please email: [email protected] LINGUISTIC VERSIONS Original: EN Manuscript completed in December 2020. DISCLAIMER AND COPYRIGHT This document is prepared for, and addressed to, the Members and staff of the European Parliament as background material to assist them in their parliamentary work. The content of the document is the sole responsibility of its author(s) and any opinions expressed herein should not be taken to represent an official position of the Parliament. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the European Parliament is given prior notice and sent a copy. Brussels © European Union, 2020. PE 654.205 ISBN: 978-92-846-7550-0 DOI: 10.2861/047009 CAT: QA-03-20-849-EN-N [email protected] http://www.eprs.ep.parl.union.eu (intranet) http://www.europarl.europa.eu/thinktank (internet) http://epthinktank.eu (blog) Challenges facing sports event organisers in the digital environment Executive summary The main purpose of this European added value assessment (EAVA) is to quantify the European added value of an EU legislative initiative that addresses the challenges facing organisers of sports events in the digital environment, with particular attention to the phenomenon of online piracy. The study investigates whether the current EU legal regime provides sports events organisers and their licensees with an adequate level of protection against piracy of online sports events, or, rather, if higher standards of protection are needed. The main challenge posed for sports events is that, just like all other forms of 'premium' content, they have a highly perishable nature: their economic value is substantially exhausted by the end of the event (and its live coverage). Hence, the commercial value of intellectual property rights protection closely hinges on a prompt and effective enforcement system regulated by a harmonised legislative framework at EU level. The legal analysis underpinning this EAVA (see Annex I) identifies two main obstacles that hamper the ability to tackle online piracy. The first concerns the legal provisions system governing intellectual property rights (IPRs). In particular, there are multiple, non-harmonised layers of exclusive rights designed to protect sports events, but only a few can address the online piracy issue specifically. The second main obstacle concerns the obsolescence of the legal enforcement measures stemming from national implementation of the Enforcement Directive, 1 the e-Commerce Directive2 and the InfoSoc Directive; 3 these need to be updated in order to tackle technologically advanced forms of online piracy. The study presents a policy proposal aimed at removing both impediments from the legal framework governing IPRs. When it comes to the legal provisions system for IPRs and the need for its harmonisation, the first possible solution (Option 1) would be to provide an ad hoc EU neighbouring right in favour of sports event organisers as opposed to sports events per se; the second – and most effective – solution (Option 2) would be to provide for 'expansion' of the broadcasters' neighbouring right, with the introduction of a full communication right in favour of both audiovisual producers and broadcasters of sports events, coupled with the adoption of a 'standing to sue' in favour of sports organisers. These options fill the gap in the current legal framework for IPRs in terms both of substantive and remedial law, with different effects. As regards the obsolescence of the current legal enforcement system, a possible solution would be to implement a system of fast, dynamic and live blocking orders, harmonised at EU level through the use of 'dynamic blocking orders' and 'live injunctions'. Along with the latter, it is necessary to adopt a legal provision granting sports events organisers (and any other producers of 'premium' content) the right to remove illicit content directly – through technological means – from any streaming server used by pirates. 1 Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights. 2 Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market ('Directive on electronic commerce'). 3 Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society. I EPRS | European Parliamentary Research Service The policy proposal, which results from the simultaneous removal of the two sets of obstacles mentioned above, would be to apply either Option 1 or Option 2, combined with the use of 'dynamic blocking orders' and 'live injunctions'. On the legislative implementation side, the policy proposal can be implemented in different ways with different results. The first possible legislative tool (Option L.1) consists of institutional support from the legislator in favour of forms of cooperation between rightsholders of sports events and information society intermediaries. The second tool (Option L.2) would involve the adoption of a new directive, aimed at amending the e-Commerce Directive, the InfoSoc Directive and the Rental Rights Directive, in order to address all the flaws and legislative loopholes illustrated in the legal analysis (see Annex I). The third – and most effective – legislative tool (Option L.3) would involve adopting an EU anti-piracy act, in the form of a new EU regulation, providing for all the legal tools envisaged by the policy proposal. Building on the legal analysis, an economic investigation generated the following findings: in 2019, 7.6 million subscriptions were made to illegal broadcasting platforms in the EU. These subscriptions generated illicit revenues of an estimated €522 million leading to annual value added tax (VAT) avoidance of €113.5 million. If the same number of subscriptions were made legally, legal broadcasters' revenues could increase by €3.4 billion each year. In addition to these revenue losses, legal broadcasters also suffer impacts on employment due to online piracy. The most cautious estimate suggests that each year up to 16 000 potential new jobs are lost as a result of online piracy of broadcasts of sports events. II Challenges facing sports event organisers in the digital environment Table of contents 1. Background _________________________________________________________________ 1 2. State of play of legal provisions for IPRs ___________________________________________ 2 2.1. Legal barriers and limits _____________________________________________________ 2 3. State of play of the legal enforcement system.______________________________________ 4 3.1. Legal barriers and limitations _________________________________________________ 4 4. The policy proposal ___________________________________________________________ 6 4.1. Legislative proposals to implement the policy proposal ____________________________ 8 5. European added value _______________________________________________________ 11 III EPRS | European Parliamentary Research Service Table of figures Figure 1 – Illegal revenues from online piracy of sports events broadcast by Member State, 2019 in millions of euros ______________________________________________________________ 12 Table of tables Table 1 – National substantive law: limits of legal
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