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| Europe Seeks Greater Control Over Digital Services | Europe Seeks Greater Control Over Digital Services |
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| If European regulators get their way, Netflix may soon have to do more than just offer “Unbreakable Kimmy Schmidt” with French subtitles. | If European regulators get their way, Netflix may soon have to do more than just offer “Unbreakable Kimmy Schmidt” with French subtitles. |
| European officials proposed on Wednesday a new set of rules that would force Netflix and other video streaming services to carry set quotas of local content in individual countries, as well as to help pay for its development. It is part of a broader effort to regulate how the 500 million people in the region can buy, access and consume online services from video streaming to messaging applications. | |
| The rules — which would go into effect next year, at the earliest — are intended to help level the playing field with national broadcasters, which are already required to financially support local content. The changes form the building blocks for Europe’s plan for a single digital market, which officials hope will help bolster the region’s sluggish economy. | The rules — which would go into effect next year, at the earliest — are intended to help level the playing field with national broadcasters, which are already required to financially support local content. The changes form the building blocks for Europe’s plan for a single digital market, which officials hope will help bolster the region’s sluggish economy. |
| For Netflix and other streaming services, the proposals could complicate international expansion plans. Netflix, in particular, has outlined ambitious growth plans for Europe and beyond, as the American market becomes saturated. It has warned of slowing growth in the United States, and it said last year it aimed to operate in 200 countries by the end of 2016, though it has faced challenges in signing up users in some international markets. | |
| Netflix’s objections to the European plan are as much about profit as principle. The company already produces content in Europe, such as “Marseille,” a “House of Cards”-style show about French politics, and the series “Suburra,” about organized crime in Italy. The company sees such shows, filmed in the local language, as a way to attract international viewers. | |
| But Netflix and others do not want Europe to set quotas, arguing that doing so would harm consumer choice. | But Netflix and others do not want Europe to set quotas, arguing that doing so would harm consumer choice. |
| Despite assurances from the European Commission, the executive arm of the European Union, that the proposals would apply to all companies — not just American ones — Silicon Valley giants like Apple, Facebook and Netflix still dominate much of the online world that Europeans have come to rely on. These companies, at least in the short term, would probably be most affected by European efforts to regulate online services. | Despite assurances from the European Commission, the executive arm of the European Union, that the proposals would apply to all companies — not just American ones — Silicon Valley giants like Apple, Facebook and Netflix still dominate much of the online world that Europeans have come to rely on. These companies, at least in the short term, would probably be most affected by European efforts to regulate online services. |
| The commission’s digital plans are subject to the approval of the European Parliament and individual member states, a lengthy process that could lead to significant changes to the proposals. | The commission’s digital plans are subject to the approval of the European Parliament and individual member states, a lengthy process that could lead to significant changes to the proposals. |
| As part of Wednesday’s announcement, European officials said they would give individual countries the power, if they so choose, to force video streaming services like Netflix, which produces “Unbreakable Kimmy Schmidt,” to help pay for the production of local content, including movies and television programs. The rules would apply to companies from both inside and outside national markets that offer services to domestic consumers in the bloc. The authorities did not specify how much the national fees might be. | |
| Netflix has been able to sidestep existing funding rules, most notably in France, because the company’s European headquarters are in the Netherlands. | Netflix has been able to sidestep existing funding rules, most notably in France, because the company’s European headquarters are in the Netherlands. |
| Such rules already exist for traditional broadcasters, which pay the equivalent of millions of dollars each year, or roughly 20 percent of their annual revenues, to support local content. European policy makers said that, by contrast, online streaming rivals invest only around 1 percent of their annual revenue. | Such rules already exist for traditional broadcasters, which pay the equivalent of millions of dollars each year, or roughly 20 percent of their annual revenues, to support local content. European policy makers said that, by contrast, online streaming rivals invest only around 1 percent of their annual revenue. |
| Streaming services will also be required to ensure that at least 20 percent of their online content is from Europe, and that these movies and television programs are given prominence in their digital catalogs. A report funded by the European Commission recently found that both Netflix and Apple already met this requirement. | Streaming services will also be required to ensure that at least 20 percent of their online content is from Europe, and that these movies and television programs are given prominence in their digital catalogs. A report funded by the European Commission recently found that both Netflix and Apple already met this requirement. |
| The proposals are part of Europe’s continuing attempts to manage the online world. The region’s authorities want to create a single digital market across the European Union to give people easy access to electronic offerings like movie streaming, online shopping and cloud computing, no matter where they live. | The proposals are part of Europe’s continuing attempts to manage the online world. The region’s authorities want to create a single digital market across the European Union to give people easy access to electronic offerings like movie streaming, online shopping and cloud computing, no matter where they live. |
| Netflix, among others, had previously benefited from a European move to change copyright rules to allow customers to temporarily view movies and television shows that they have bought on a digital service, no matter where they are in the 28-nation European Union. | Netflix, among others, had previously benefited from a European move to change copyright rules to allow customers to temporarily view movies and television shows that they have bought on a digital service, no matter where they are in the 28-nation European Union. |
| “The way we watch TV or videos may have changed, but our values don’t,” Günther H. Oettinger, the European commissioner in charge of the digital economy, said in a statement on Wednesday. “With these new rules, we will uphold media pluralism.” | “The way we watch TV or videos may have changed, but our values don’t,” Günther H. Oettinger, the European commissioner in charge of the digital economy, said in a statement on Wednesday. “With these new rules, we will uphold media pluralism.” |
| In written statements to the European Commission, Netflix said that it had promoted European content, including funding its own series in several languages, but that it believed strict quotas were counterproductive. | In written statements to the European Commission, Netflix said that it had promoted European content, including funding its own series in several languages, but that it believed strict quotas were counterproductive. |
| “We appreciate the commission’s objective to have European production flourish, however, the proposed measures won’t actually achieve that,” Joris Evers, a Netflix spokesman in Amsterdam, said in a statement. | “We appreciate the commission’s objective to have European production flourish, however, the proposed measures won’t actually achieve that,” Joris Evers, a Netflix spokesman in Amsterdam, said in a statement. |
| Digital Europe, a trade group whose members include Google and Microsoft, also balked at the proposed European content quotas, adding that any new rules for online platforms should be based on evidence that consumers had been harmed. | |
| Europe’s proposals on digital services are only the beginning. | |
| On Wednesday, the European Commission said that it would propose new copyright rules in the fall that could force companies like Google to pay online publishers when using their content, for instance on the news aggregation service Google News. | On Wednesday, the European Commission said that it would propose new copyright rules in the fall that could force companies like Google to pay online publishers when using their content, for instance on the news aggregation service Google News. |
| While those proposals are not finalized, analysts said there was a continuing fight between many European publishers, which do not like the power that American technology companies have over access to online content, and Silicon Valley supporters, who say companies like Google helped people view the digital material. | While those proposals are not finalized, analysts said there was a continuing fight between many European publishers, which do not like the power that American technology companies have over access to online content, and Silicon Valley supporters, who say companies like Google helped people view the digital material. |
| Previous attempts to force Google to pay for digital content in Germany and Spain did not prove successful, and the Internet giant either shut down its news aggregation service or removed local publishers from Google News in protest. | Previous attempts to force Google to pay for digital content in Germany and Spain did not prove successful, and the Internet giant either shut down its news aggregation service or removed local publishers from Google News in protest. |
| A representative for Google was not immediately available to comment. | A representative for Google was not immediately available to comment. |
| European officials also said on Wednesday that they were still reviewing possible new rules to police how so-called online platforms like Facebook and Amazon operate. | European officials also said on Wednesday that they were still reviewing possible new rules to police how so-called online platforms like Facebook and Amazon operate. |
| Many legacy European industries, particularly in the telecommunications sector, have complained that start-up rivals like WhatsApp must comply with fewer laws than existing players. Others have complained that tech giants have too much control over people’s online data, which gives them an unfair advantage when offering services to potential customers. | Many legacy European industries, particularly in the telecommunications sector, have complained that start-up rivals like WhatsApp must comply with fewer laws than existing players. Others have complained that tech giants have too much control over people’s online data, which gives them an unfair advantage when offering services to potential customers. |
| A Facebook spokeswoman declined to comment. | |
| The European Commission said it would decide by the end of the year whether Internet messaging services like Facebook Messenger may have to comply with existing — and more onerous — telecom rules that apply to traditional text messages offered by carriers. | The European Commission said it would decide by the end of the year whether Internet messaging services like Facebook Messenger may have to comply with existing — and more onerous — telecom rules that apply to traditional text messages offered by carriers. |
| European officials also said they were looking into making it easier for people to move their digital information between online platforms by the end of the year, giving them greater control over data that companies collected on their daily digital lives. | European officials also said they were looking into making it easier for people to move their digital information between online platforms by the end of the year, giving them greater control over data that companies collected on their daily digital lives. |
| “I want online platforms and the audiovisual and creative sectors to be powerhouses in the digital economy,” said Andrus Ansip, the European Commission vice president in charge of the region’s digital single market proposals. “They need the certainty of a modern and fair legal environment: That is what we are providing today.” | “I want online platforms and the audiovisual and creative sectors to be powerhouses in the digital economy,” said Andrus Ansip, the European Commission vice president in charge of the region’s digital single market proposals. “They need the certainty of a modern and fair legal environment: That is what we are providing today.” |