The German Federal States are likely to adopt a new law in 2020, known as the Interstate Media Treaty (Medienstaatsvertrag – “MStV”). The MStV will impose new regulations on firms or technologies that serve as intermediaries to online media services. It will also introduce new rules in other areas, e.g., for online content providers and advertising, but the rules for intermediaries are likely to generate the most interest.

After intense debate and two public consultations, which prompted over 1,200 comments, the prime ministers of the German Federal States agreed on a draft of the new law on December 5, 2019. Because the law also implements certain provisions of the latest revision of the EU Audiovisual Media Directive, which Member States must implement by September 2020, it is expected that the Federal State parliaments will adopt the MStV in the first half of this year. Germany notified the MStV to the EU under Directive 2015/1535 in January, and the European Commission is currently reviewing it.

Types of intermediaries targeted by the MStV

The MStV regulates three distinct categories of intermediaries:

1. “media platforms”, i.e., online services that offer users a pre-selected combination of

• broadcast media and/or
• online media similar to broadcast media and/or
• online media that include “journalistically edited” news or political information,

1. “user interfaces”, i.e., features that enable users to access the aforementioned types of media services via one or several media platforms, either directly or through software-based applications, using text, graphics, or acoustic signals; examples include the graphic user interface of a smart TV or a voice assistant,
2. “media intermediaries”, any online service that aggregates, selects and presents to the public journalistically-edited offerings by third parties without combining them to form one offering; examples include social networks that also provide news and political information, search engines, video sharing platforms, user generated content portals, and news aggregation sites.

The MStV will apply to all intermediaries that are used in Germany, regardless of whether the provider has an establishment there (sec. 1(8) MStV). It will not apply to “media intermediaries” specializing in the aggregation, selection, or presentation of content that relates to goods or services.

The MStV places more onerous obligations on large intermediaries. Broadly, media platforms and user interfaces are considered to be large if they have more than 20,000 daily users on average during one month, while media intermediaries are considered large if they have more than one million monthly users over a six-month period.

Requirements to have a local establishment or representative

All providers of “media platforms” and “user interfaces” must

• have an establishment, or appoint a representative, in Germany or another Member State of the European Economic Area (EEA) and be able “to be sued in court” in the EEA, either directly or through their representative (sec. 79 and 53 MStV),
• notify the competent German state media authority (Landesmedienanstalt) one month prior to starting to provide covered services to users in Germany or, if they already operate when the MStV comes into force, within six months (sec. 79(2) MStV),

Large “media intermediaries” must appoint a representative in Germany who can serve as a point of contact for the state media authorities in administrative proceedings for violations of the obligations set out in the MStV (Ordnungswidrigkeitenverfahren), cf. sec. 91(2), 92, 117 MStV.

Examples of Other Obligations for Intermediaries

All types of regulated intermediaries also must carry out enforcement measures against content providers, as ordered by the state media authorities, if measures directed against the content providers themselves are “impossible or unlikely to be successful” (sec. 79(4) and 111(3) MStV). This wording echoes existing case law (based on Art. 12(3) of the eCommerce Directive) in copyright cases, which provides that a rightholder can force an internet access provider to block infringing content if the provider hosting that content cannot be identified, or if the infringer changes the host provider every time the rightholder takes legal action against a host provider.

The rules for online media services include the following:

• If content or posts created automatically by means of software are distributed via a user account that appears to belong to a natural person (“social bots”), the content or posts must be accompanied or preceded by a “clearly legible” notice clarifying that the content was in fact created and sent automatically.
• Persons or companies providing commercial or promotional content (including political promotional content) through intermediaries will be required to clearly indicate their identity.
• “Journalistically-edited” content must conform to generally accepted journalistic principles, in particular, news must be checked for accuracy using proper care.
• When reproducing opinion polls conducted by online media providers, it must be expressly stated if the poll is “representative” of the relevant population.

In addition, all types of regulated intermediaries that are large must provide information on

• the business terms they use with the providers of broadcast media, online media similar to broadcast media, and online media that include “journalistically edited” news or political information,
• the technical interfaces that providers of the aforementioned services can or must use, and
• the fees that the intermediary charges these media services.

The terms must be fair and non-discriminatory.

Large “media platforms” can be required to prioritize certain media services in their rankings, although the users should also be able to customize these ranking according to their preferences. Media services can apply to the media authorities in order to be included on the list of prioritized services.

Large “media intermediaries” must disclose the criteria they use to determine whether specific content is made accessible on the service, the prominence with which such content is displayed, and the grounds on which content is removed (or not). Information on the algorithms used for these purposes must be provided “in understandable language”.

Background

The MStV is an overhaul of the existing German Interstate Broadcasting Treaty. The renaming of the treaty, and the new rules it imposes, reflect the lawmakers’ awareness that traditional broadcast media – which used to be highly influential in forming public opinion – are now to a considerable degree being replaced by or interlinked with online media services.

The German legislator’s concern is that the ranking (or other form of display) of different broadcast and online media services by an intermediary might influence the user’s choice, and that such ranking and prioritizing could influence the users’ political opinions over time. To provide an example, a user will often be inclined to click on one of the icons displayed on the home screen of the graphic user interface of a smart TV instead of searching for additional options.

Germany’s notification to the EU states that by adopting the MStV, “the German media legislator is reacting to fundamental changes in the media landscape, in particular to the increasing importance of certain services (gatekeepers) for finding and accessing media offerings. The aim of the [MStV] is the media-specific further development of a legal framework that preserves pluralism and promotes diversity”.

Not least due to Germany’s experience with the single-channel “Volksempfänger” radio (people’s receiver), an important propaganda tool in the Nazi era, broadcasters have been relatively tightly regulated in Germany since the Second World War. Publicly funded channels are organized in a way that aims to ensure that news and entertainment programs are politically neutral (or at least moderate) and reflect the diversity of society; private-sector broadcasters need a license and are supervised by the media authorities of the Federal States.

While most commentators accept that the lawmakers’ intentions are good, the law has been criticized for enabling censorship, for containing too many vague terms, for exceeding the Federal States’ legislative competences, and for being inconsistent with European law, in particular, the e-Commerce Directive.

The German Data Ethics Commission has called for more regulation for media intermediaries (Opinion, p. 207 et seq.), effectively endorsing the proposed new rules. The Data Ethics Commission is an expert committee that provides recommendations regarding the regulation of data processing and algorithmic decision-making to the German government, including which kind of regulation Germany should advocate on the EU level.