Ofcom upheld an appeal from Playboy TV UK and Benelux Limited (collectively the "Appellant") following a decision by the Authority for Television on Demand (ATVOD) that Playboy TV and Demand Adult (collectively the "Online Sites") could each be classified as an on-demand programme service (ODPS). The transfer of editorial decisions from the UK to Canada meant the Online Sites provided were no longer subject to ATVOD’s jurisdiction.
Ofcom upheld the appeal on the basis of evidence supplied by the Appellant indicating that editorial responsibility had been sufficiently transferred to Montreal, Canada, thereby putting the services out of ATVOD’s jurisdiction.
In accordance with Part 4A of the Communications Act 2003 (the "Act"), a service is only an ODPS if it satisfies each defining criterion in section 368A of the Act:
- Section 368A(1)(c) states "a service is an ODPS if there is a person who has editorial responsibility for it."
- Section 368A(4) states "a person has editorial responsibility for a service if that person has general control –
- over what programmes are included in the range of programmes offered to users; and
- over the manner in which the programmes are organised in that range;
and the person need not have control of the content of individual programmes or of the broadcasting or distribution of the service."
- Section 368R(5) states "the person, and only the person, who is to be treated for the purposes of this Part as providing an on-demand programme service is the person who has editorial responsibility for the service."
The Appellant had previously notified the Online Sites to ATVOD to be regulated as an ODPS. In June 2012, the Appellant informed ATVOD that editorial responsibility was moving to Montreal. On 17 September 2012, ATVOD issued its determination that notwithstanding the information provided by the Appellant, the Online Sites remained an ODPS (subject to UK regulation) because:
- The contact information (as of 14 September 2012) on the Online Sites remained that of the UK Company "Playboy TV UK / Benelux Ltd."
- The Online Sites’ Terms and Conditions were governed by "English Law"
- Domain registration data suggested that the Online Sites were not registered in Canada, but in America
- The overall design and layout of the Online Sites had not changed since the purported transfer of editorial responsibility to Canada
- An email sent by the Appellant’s head of digital and new media, to the product manager, indicated that the person with "editorial responsibility" remained based in the UK
Appeal to Ofcom
The Appellant appealed ATVOD’s determination to Ofcom. ATVOD’s submitted representations included that the Appellant supplied significant evidence to Ofcom during the appeal process that had not been supplied to ATVOD. Accordingly, ATVOD considered that, in those circumstances, Ofcom should quash ATVOD’s original determination and remit this back to ATVOD for a new determination, which would be based on all the new information currently available.
Ofcom upheld the appeal as, in its view, it did appear that "a genuine reallocation of responsibility within the corporate group" had occurred. Although a limited number of individuals were still employed in the UK, Ofcom recognised a number of redundancies had occurred, and responsibilities arising from such positions appeared to have been transferred to Playboy Plus Entertainment. It was also clear that the most senior member of staff running the Online Sites, the product manager, was based in Montreal.
Ofcom was not supportive of ATVOD’s request that the matter should be remitted back to ATVOD. Ofcom considered that the Appellant had in fact cooperated to a large extent with ATVOD during the period leading up to ATVOD’s determination. Accordingly, given the facts and the extra time and costs that would be incurred in remitting the matter back to ATVOD, Ofcom considered it more appropriate to simply substitute ATVOD’s determination with its own.
Finally, whilst Ofcom upheld the appeal, it noted that a Luxembourg-based group company was mentioned in some of the information supplied by the Appellant, and it did not rule out the possibility that the Online Sites might in fact be subject to video-on-demand regulation in Luxembourg.
Client Alert 2013-275