Media Streaming Regulation in Egypt
Amr K. El Sabahi
Founding Partner and Head of TMT Department
October 30, 2018
I - Introduction
Until a very recent time, precisely September 27, 2018, the business of media streaming and online channels was a deregulated domain in Egypt.
You could have availed different types of media and opened a countless number of online channels without being subject to a specific set of regulations or the supervisory powers of a regulatory body.
On September 27, 2018, Law No. 180 of 2018 on the Regulation of Press and Media & The Supreme Council of Media (the “Law”) was officially enacted.
Though we are yet to see the executive regulations of the Law, which are due to be ratified and published within 3 months from the date on which the Law was published, i.e. by December 27, 2018 at the most, such a grace period is seldom observed by the Egyptian competent bodies in recent years.
In fact, some of the laws published almost two years ago are yet to have their complementary executive regulations at the time they were supposed to be issued within the same grace period of 3 months.
Moreover, the Law provided for a grace period of 6 months from the date on which the executive regulations are published for all entities involved in the businesses of press and media in Egypt to adjust their states of affairs and abide by the provisions of the Law and its executive regulations and therefore and until the date of publishing this Article, the business of media streaming and online channels remains fairly deregulated until a further notice.
II - Licensing, Incorporation & Management
1 - Licensing
The Law penalized the conduct of any business relating to media streaming and online channels Egypt without having a license issued by and according to the criteria provided by the Supreme Council of Media (“SCM”).
This applies to the activities of audiovisual streaming, online advertising and special video on demand services (“SVOD”).
Licenses are issued by the SCM within 90 days from the date of application.
The licensing fees for any of such activities are EGP 50,000 and a license is issued with a term of 5 years.
If the licensee is not fully operative within a year from the date of being granted the license, the SCM will revoke the license.
The Law penalizes the assignment of license without the prior approval of the SCM. Further, the Law forbids the change of control of the licensee without the prior written approval of the SCM.
2 - Incorporation
Further, investors wishing to apply for the aforementioned license, must undertake the following:
a. Incorporate a commercial company, whether of sole proprietor (as per the latest amendments to Law No. 159 of 1981 on Commercial Companies), limited liability or joint stock.
b. The applying company’s capital must be of no less than 51% Egyptian shareholding.
c. The applying company’s capital must be no less than EGP 2,500,000.00.
d. 35% of the applying company’s capital should be paid up upon incorporation.
3 - Management
After the applying company is fully incorporated and is licensed to conduct business relating to media streaming and online channels, it must abide by the following regulatory requirements in undertaking its day-to-day operations:
a. Licensee must hire an Egyptian national to act as its content manager. He/she should be of clear criminal record and will represent the licensee before the SCM.
b. Licensee must be located in one of a media or broadcasting zones to be designated by the SCM.
c. Licensee must keep a minimum of 12 months record of the content it avails and must submit a copy of such record to the SCM.
d. Licensee must abide by the censorship instructions to be issued by the SCM.
e. If licensee is to avail its content via smart phones and tablets, a special license for same must be obtained from the SCM in advance. (We believe that this part should be further clarified upon the issuance of the executive regulations of the Law).
f. In all cases, and especially in the case of online advertising, licensee should align the competent taxations authorities for the imposition of relevant taxes on marketing and advertising activities arising out of Egypt or in relation to Egyptian products.
III - Regulation
As clear from the title of the Law, the SCM is the regulatory body in charge of regulating conventional and electronic press, conventional and electronic media and any other sort of media related business whether owned and operated by the private or the public sector.
The Law grants the SCM a wide variety of powers, interim measures and disciplinary measures & penalties, including revocation of license, for regulating such a vital domain.
IV – Conclusive Points
It may be relatively early to assess the Law at this stage as there are some complementary items that are yet to be seen and evaluated upon publishing and enforcing the awaited executive regulations of the Law.
Nonetheless, we would like to share our preliminary views of the Law, in the hope of starting a productive discussion on implementing the Law in manners that guarantee:
• sound and supportive regulation;
• continuation of foreign direct investments in the fields of content production and streaming;
• protection of Egyptian intellectual property;
• observation of public order and morals; and
• abiding by current and future national security requirements.
Indeed, it is hard to strike balance between the preceding items, as they could be seen conflicting from different vantage points, and we believe that such was the dilemma that the legislators faced upon envisaging, discussing and enacting the Law.
Nonetheless, as members of the Egyptian legal community, we should avail all support, legal and technical information and best global practices as may be required by the SCM to assume its wide range of responsibilities and act as a encouraging regulator, especially in the fields of electronic content and media streaming, than rather a restrictor of what could become a promising business domain, in which Egypt could excel as a power player and exporter.
The recently enacted Egyptian laws have shed light on some overlooked business fields that were left deregulated for a long time and in some cases, when vital ad reformative regulation was much needed.
In such a regard, we praise the enactment of the new law on Internet Crimes and the heightened levels of personal data protection provisions that it introduced for the first time in Egypt.
We also believe that having a law for regulating Transportation Services provide via Information Technology was a much-needed step for the protection of the Egyptian consumers date and interests.
Simultaneously, we look forward to enacting the much-anticipated E-Commerce Law, in the hope that it would further encourage foreign direct investment in the said field and secure the creation of more business and employment opportunities in Egypt.
While we believe in:
• sound regulation of vital businesses and services;
• effective consumer protection, solid data protection; and
• most importantly, the realization and protection of national security,
we believe that all of such could be provided in line with:
• encouraging creativity;
• creating business and employment opportunities; and
• most importantly, securing more foreign direct investment opportunities at the time that all of such are much-needed by Egypt.
Amr K. El Sabahi
Founding Partner and Head of TMT Department
October 30, 2018
