Widespread VPN use for accessing better entertainment content could change licensing practices

Due to the pandemic a growing number of businesses have begun adopting Virtual Private Networks (VPNs) for security purposes while working remotely. In addition to business VPNs, many persons use VPN for personal purposes.

This article focuses on private VPNs , which can be used for multiple reasons and provides information a VPN private user may want to know about the legal implications of using it.

What is a VPN?

A VPN is a service that provides Internet users with both anonymity and privacy while browsing the Internet. It does this by hiding a user's IP address, which identifies both the device and location.

What are VPNs used for?

There are legitimate reasons to use private VPNs such as to prevent hackers from accessing a user’s data, stopping ad companies from tracking one’s Internet activity, or to enable teleworking. Available studies, however, show that up to half of all VPN users do so aiming to access better entertainment content. In other words, users rely on VPNs to make themselves appear to be in another country, which effectively enables them to bypass geo-blocking to access content that would otherwise be unavailable in their country.

Why is bypassing geo-blocking an issue from a copyright law perspective?

In order to bring content to users, content distributors must obtain copyright licences from the underlying copyright owners to stream movies and TV shows. The copyright owners have the right to decide in which countries, how, when, and at what price to make this content available to the public.

When users use VPNs to access content not available in their country, they technically do not have a licence to stream that content, even though they may be paying a monthly subscription. If no licence exists for a specific country, users should not be able to watch the content in that country.

Basically, this kind of VPN use defeats content restrictions. It is safe to say that geo-blocking has boosted the development of the VPN industry.

Is the use of a VPN itself legal?

The short answer is yes, as long as the VPN is not used in a country where VPNs are banned by law (e.g. China), or the VPN is not used for illegal activities (e.g. downloading pirated material, hacking, selling materials on the dark web).

But does circumventing geo-blocking qualify as copyright infringement?

The real question, when put in legal terms, is whether accessing content with lack of a proper licence equates to copyright infringement. In short, so long as there is no legislation that specifically and clearly outlaws the bypassing of geographical content restrictions through VPN use for the purpose of accessing copyright-protected materials, such use remains legal. However, even if it does not reach the level of illegality, such use of a VPN can be a violation of the content distributor’s general terms and conditions (which is the case for Netflix for example). As such, circumventing the content blockers might qualify as a contractual breach rather than potential breach of law.

In order to assess if there might be a breach of law as well, two questions arise: firstly, is the VPN user engaged in any means of use vested in copyright owners and, secondly, is geo-blocking considered a ‘technological protection measure’ (TPN), a provision regulated in most of copyright laws? These questions should be determined by local laws. If any of the answers are affirmative, then the act may also qualify as copyright infringement. However, many local laws are not sophisticated when it comes to VPN and licensing issues, and a lack of court precedents or clear positions creates legal ambiguity.

What the future will bring?

Content distributors took the first steps to fight geographical circumvention by introducing VPN-limiting terms and conditions and VPN detection tools. Needless to say, in the digital era nearly all detection tools are quickly overcome by capable tech teams. Therefore, a different business approach seems to be necessary. In addition, the wide popularity of the use of VPNs to access better and more extensive entertainment content reveals that users are perfectly happy to pay for their content. Also, there is openness from EU legislators to minimise geo-blocking (see the Geo-blocking Regulation). In light of these factors, rather than outlawing VPNs or trying to fight them with technological measures, a clear solution could be for content owners and distributors to discontinue the practice of territorial copyright licensing (and thus geo-blocking) and adopt global licences. This would be an important change to the traditional distribution model but could minimises territorial market fragmentation.

It is likely copyright owners and content distributors will proactively implement measures to resolve this issue in advance of any change in copyright laws, a trend that can already be seen given that many content owners have already started their journey towards prioritising global licences.

Beyond accessing restricted entertainment content, the other main motivator for using a VPN is to increase security. CMS will continue its discussion of this topic by focusing on the privacy angle of VPN use. Stay tuned.

For more information on the legal implications of using VPNs, contact your CMS client partner or local CMS experts.