Ofcom has warned that the EU’s proposed Audiovisual Media Services (AVMS) directive could force new media companies to relocate outside Europe.

The UK media regulator said research it had commissioned from RAND Europe showed the proposals could “significantly increase regulatory costs and uncertainty” for multimedia firms.

The study concluded that smaller businesses in the new media industry would be vulnerable to the effect of the regulations and could move to other locations.

The AVMS directive, due to be implemented next year, would expand current EU broadcasting regulations to all audio-visual services, including content delivered to internet and mobile phone users.

Currently being debated by the European Council and Parliament, it would aim to ensure the protection of minors and prevent other abuses.

However, concerns have been aired that the move would extend regulations to user-generated content such as video blogs. Britain has campaigned against the move, saying new media services should not be included.

Ofcom said it had “expressed serious doubts about the practicability and appropriateness of extending broadcasting regulation to a whole range of new media services which are very different from traditional TV, both in nature and in the manner in which they are consumed.

The organisation said it favoured ‘light touch’ and self-regulation which would cut costs and uncertainty for firms, and that legislators should clarify which services will come under the new rules.

It also said there was “a compelling case for the complete exclusion from the proposals of the online games industry”.

Earlier this month, The Association of Online Publishers (AOP) clarified its position on the directive.

It said: “Under the draft proposal the regulatory principles relating to broadcast content would be extended to cover audio-visual (AV) content made available in any form. AV content as defined in the draft covers moving pictures, whether or not accompanied by sound. Thus, moving materials on websites, including advertisements would be covered.

Of further concern to publishers is that the Directive in its current form would legalise product placement in TV, as it breaks the principle of separation between editorial and commercial content for broadcast media.