The existing TVWF regulations, which cover traditional broadcasters, set minimum standards for advertising and the protection of minors. The EC wants to extend them to, including new media broadcasting and emerging technological platforms.
This has alarmed some in the business and Internet community, and led the Confederation of British Industry (CBI) to claim last month that the directive would "stifle economic growth, inhibit job creation and hamper the development of digital content and services across the EU."
But speaking on Wednesday, Viviane Reding, EU Commissioner for Information Society and Media, pledged not to intervene in business.
"There will be no regulation of the Internet," Reding said on Wednesday. "I'm not going to intervene in business--I am technology neutral."
The commissioner, appearing at an Internet Content Rating Association event in Brussels, said there should be basic rules to protect minors online and to prohibit incitement of hatred and overly repetitive advertising.
Reding rejected the CBI's claims that the TVWF revisions were an attempt to "shoehorn digital content providers into rules designed for traditional broadcasters, undermining high-value, high-tech economic growth when it should be stimulating it."
"Self regulation works best when there is a legal framework to support it. With co-regulation, the government lays down the rules, then the implementation of the rules (is handled) by individual (companies). Government only steps in if self-regulation is not effective," Reding said.
"When consumers have control and choice, you do not need heavy rules. There are only basic tier rules. The provider has to obey basic rules, but it's for the parents to choose (how to filter content). I don't want to do that top down," she said.
Reding claimed that instead of limiting business, the legislation would enable Internet businesses and content providers to expand in Europe.
"If you have 25 conflicting regulations in 25 countries, you can't take advantage of the internal market," she said. "When the new rules are applied, (content providers) can get authorization in Britain and spread into 25 countries. I see a big chance for European content to travel."
But there's some concern the directive will effectively mean that online content would be regulated.
Professor Michael Rotert, president of the European Internet Service Providers Association, claimed the directive revisions were regulation of the Internet by stealth.
"This is regulation of the Internet through the back door. We think Commissioner Reding has not understood the concept of the Internet. It might be she thinks she's regulating content, but you can't distinguish things so easily. Regulated self-regulation will be misused immediately, when it comes into practice," Rotert said.
AOL, Microsoft, Google and Verizon Communications all also expressed concern on Wednesday about the scope of the legislation, and the problem of jurisdiction and enforcement.
"We believe existing legislation protects children and consumers. Child abuse images are already illegal," said Camille de Stempel, director of policy for AOL UK. "We believe strongly in self-regulation as the way forward."
"We don't see the need for the directive--we have a lot of tools to protect children.... If anything, we should look at the relaxation of broadcasting regulations rather than trying to shoehorn the Internet into a new regulatory framework," Stempel said.
Mike Cosse, Microsoft's lead counsel for Europe, agreed. "Let's use self-regulation on content, and help the state in a cooperative, nonconfrontational way," he said.
"We want to encourage the authorities to step in against those who obviously provide very illegal content. Apply appropriate regulations to the appropriate content," Cosse added.
Mike McKeehan, executive director of Internet and technology policy for Verizon, backed this point.
"In the U.S. the First Amendment outlines parameters and defines what's legal and what's not legal. Child porn is toxic material. But we also have violent and graphic images available to children, which is a little bit schizophrenic," McKeehan said.
"We (Verizon) are not big proponents of government regulation--we prefer to let the market work," McKeehan said. And Patricia Moll, European policy director for Google, said the search giant was "concerned with the scope of the regulations."
Tom Espiner of ZDNet UK reported from London.