EU seeks to restrict geo-blocking of digital content

United Kingdom
recently leaked European Council proposal dated 13 April 2016 (the “New Proposal”), provides details on the EU’s plan to restrict the practice known as geo-blocking, the intentional blocking of a user from protected content due to his geographical location. According to the Council, geo-blocking is contrary to an internal digital market in which digital content such as music, games, films and sporting events should be accessible across borders. Back on 9 December 2015, the European Commission presented a first proposal for a regulation “on ensuring the cross-border portability of online content services in the internal market” which sought to partially prohibit geo-blocking (the “Proposal”).

The Proposal states that anyone who has concluded a contract for portable online services (streaming, for example) must be allowed to access such services while temporarily present in a Member State other than his residence. The Member State in which the user mainly resides is his Member State of residence.

The Proposal is unclear on how long the “temporary” presence in the other Member State may be. Although its explanatory memorandum explicitly mentions business trips, leisure time and study visits as examples of temporary visits, the text of the proposed regulation does not include such examples. The European Commission and Council will make improvements in this respect in order to define “temporarily present” more clearly.

For the purposes of the Proposal, the online content will be considered to be provided, accessed and used solely within the Member State of residence regardless of where the user actually accesses the content. Additional licensing rights will not have to be obtained for the provision of access in other Member States. Contractual clauses between rights holders and online providers that prohibit cross-border access to the content shall be unenforceable.

The New Proposal clarifies that the regulation does not apply to online providers that offer their services free of charge and therefore do not verify their subscribers’ Member State of residence by way of the usual verification means (e.g. credit card data). The New Proposal explicitly provides that providers of free services shall have the right, but not the obligation to provide their services to users who are temporarily present in another Member State. However, a provider of free services must fully comply with the regulation if it decides to offer services to users who are temporarily present in other Member States.

The New Proposal also provides information on how the online provider may verify the user's Member State of residence, including: reviewing the user's identity card, bank or credit card data; identifying where the user pays his taxes, is connected by contract to the Internet or telephone system or has installed his set-top box. Providers may also monitor IP addresses, even if periodical checks must suffice for this.

The New Proposal will be addressed by the Working Party on Intellectual Property. As soon as it is finalised, it will be submitted to the European Parliament for approval. According to the current plan, the regulation should enter into force in June 2017, together with the abolition of roaming charges.

If you would like more information on the New Proposal, please contact Dr. Martin Gerecke.