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Constituting the first legal proposal of the Digital Single Market Strategy, the new Regulation 2017/1128 aims at broadening access to lawful online content for consumers temporarily present in another member state. In essence, when a Belgian IP lecturer subscribed to Netflix UK travels back to Belgium to visit her family and friends, she will be able to watch the same series and films available in the UK. The Regulation will be applicable in all EU member states from 1st April 2018. As the UK IPO has just launched a consultation to comment on the proposed domestic enforcement mechanisms appropriate for the enforcement of the Portability Regulation, it appears timely to reflect on the impact of this new legal instrument.[1]
Problem identified by the Commission
Although free movement of persons and services has led to EU citizens frequently travelling from one member state to another, access to digital content remained largely defined by geographical borders. For example, there is no denying that copyright and related rights operate on a territorial basis through licenses and business practices that allow online service providers to serve certain markets only. The fact that a consumer cannot access content subscribed to in his home country while being temporarily in another member state results in a barrier to the Digital Single Market which the Commission aims to address with this new regulation. Additionally, the Commission intends to preserve and promote cultural diversity throughout the Union and would, in theory, level the playing field for providers of online content services in the internal market.
As the Internet became the primary way to disseminate content, this initiative is more than welcome to meet EU consumers’ expectations. But this Regulation is equally important for its implications for copyright law and the electronic commerce.
The scope of the Regulation
Concise[2] but powerful, this Regulation imposes a new obligation on online content providers. Therefore, Article 3 provides that subscribers should have access to the services subscribed to in their home country while they travel to another EU member state (e.g. for the same content, the same number of devices, for the same number of users and with the same functionalities) without additional charges for the user (Article 3(1-2)). If there is a change in the quality of delivery of content which falls outside the control of the service provider, subscribers should receive this information from the service provider (Article 3(3-4)).
An important caveat concerns the addressees of this new obligation. Recital 18 adds that ‘the payment of a mandatory fee for public broadcasting services should not be regarded as a payment of money for an online content service’. This means that arguably, services like BBC iPlayer and ITV Hub are not subjected to this obligation. Indeed, the obligation is only mandatory for online content provided against a fee (e.g. Netflix, BT Sport) whereas the Regulation enables providers of free online content to provide access to the same content while being temporarily present in another member state provided that this provider verifies the subscriber’s Member State of residence (Article 6(1)). If the provider decides to take on this opportunity, subscribers should be informed of this decision (Article 6(2)).
The content envisaged is not limited to audio-visual works but includes ‘music, games, films, entertainment programmes or sports events’,[3] and more generally, all works protected by copyright and related rights, such as books and broadcasts.[4]
Finally, right-holders and online content providers are not allowed to enter into contractual agreements to circumvent the application of the Regulation (article 7).[5] Otherwise, these will be deemed unenforceable.
Sweet promise, bitter reality?
Sadly, this ambitious initiative falls short of its promise as a pan-European access to online content is not created. Rather, the Regulation creates a legal fiction by which the provision of online content services is located as if the subscriber had never left his home country. In other words, despite being temporarily present in another member state, the access to and the use of the service by the subscriber is deemed to occur solely in the subscriber’s Member State of residence (article 4). While this is an elegant solution that respects the territoriality principle underpinning copyright and related rights,[6] it is likely to hinder the achievement of the Regulation’s goals as well as compatibility with other EU instruments.
How should providers verify the subscriber’s member state of residence? Encapsulating a list of ways in article 5(1), providers can combine a maximum of two means. These means include: ID cards, payment details, place of installation of a decoder or similar, payment of a license to a public service broadcaster or similar, local electoral registration information publicly available, payment of local taxes information publicly available, utility bills, postal address or even a subscriber’s declaration of address and an IP address check. If this verification should only occur once during the subscription, the online content provider in doubt can repeat this verification later on.[7] However, in order to prevent abuse, the online content provider is limited to one IP address check (article 5.2).
How temporary should the subscriber’s stay in another member be for this regulation to apply? Probably one of the most controverted concepts during the legal debates for the adoption of this Portability Regulation, article 2(4) defines temporary as: ‘for a limited period of time’. This is extremely problematic. How will this be appreciated in reality? Could it lead to a situation where a uniform application of the Regulation is forestalled before its very implementation? This could be the case if the temporary character is left to providers and right-holders to decide on… Needless to say, such an outcome would be at odds with a principle of non-discrimination prevailing throughout the Union.
Furthermore, whilst the Regulation provides a new obligation, it fails to provide anything in relation to its enforcement. Here, one could envisage enforcing the Regulation by domestic authorities and providing practical assistance to consumers in case of a dispute between a subscriber and a provider (like included in the proposal for a geo-blocking Regulation, articles 7 & 8).
Conclusion
Despite its laudable intention, the Regulation could lead to EU consumers’ deception and clarification from the Court of Justice of the European Union is awaited especially on the ‘temporary’ character of the subscriber’s stay in another member state.
Professor Estelle Derclaye (University of Nottingham) & Dr Sabine Jacques have co-authored a piece following Estelle’s presentation at the international conference ‘La réforme du droit d'auteur dans la société de l'information’ organised by CERDI (France, 2016): E. DERCLAYE & S. JACQUES, ‘Un exemple d’articulation des normes : le projet de règlement sur la portabilité transfrontière des services de contenu en ligne’. In: BENSAMOUN, A., ed., La réforme du droit d'auteur dans la société de l'information (Mare et Martin, 2018) pp. 147-161 (In Press). The authors would like to thank the commentators for the feedback received and Alexandra for this great opportunity!
*image two is by Blogtrepreneur and available here. It is licensed under the Creative Commons Attribution-Share Alike 2.0 Generic
[1] It should be noted that this instrument is directly applicable in national law. However, the UK wants to ensure that other areas of national law comply with the Regulation.
[2] It only contains 36 recitals and 11 articles.
[3] Recitals 1, 4, 5 of the Regulation.
[4] Recitals 7 & 8 of the Regulation.
[5] The same applies to contracts between subscribers and providers.
[6] In other words, it ensures that online service providers will not have to renegotiate licenses with right-holders to grant access to content.
[7] It is worth noting that article 8(3) does not authorise online service providers to keep personal data such as IP addresses from its users beyond what is necessary for the verification of the subscriber’s member state of residence.