New rules are being introduced which are intended to support the Digital Single Market in the European Union (EU).

Digital Single Market

One of the European Commission's top priorities is to seek to create a Digital Single Market, with the aim of encouraging greater opportunities for innovation, growth and jobs whilst providing greater protection for consumers and their personal data.

In 2015 the European Commission agreed that the three main action points for their Digital Single Market strategy were:

  • better access for consumers and businesses to digital goods and services;
  • shaping the environment for digital networks and services to flourish; and
  • creating a European Digital Economy and Society with long-term growth potential.

Portability of online content

As part of the Digital Single Market strategy, on 8 June 2017 the Council of the European Union formally adopted a new Regulation which allows consumers in the EU who have paid for online content services in their home country to access those services when visiting other EU member states and to do so without paying any additional fees.

To ensure that access to such online content is restricted to those consumers who have paid for it in those specific markets, online content service providers will have the ability to run checks to verify the consumer's member state of residence. Any such checks made must be reasonable, proportionate, effective and in line with EU data protection legislation.

Providers can require proof of residency through no more than two of the following:

(a) An identity card;

(b) Payment details, such as a bank account or credit card number;

(c) The address where the device for the supply of services (such as a set top box) is installed;

(d) Payment of a licence fee for other services in the member state (such as public service broadcasting);

(e) An internet or telephone service supply contract to an address in the member state;

(f) Registration on the local electoral rolls (if such information is publically available);

(g) Payment of local taxes (if such information is publically available);

(h) A utility bill confirming a link to the member state;

(i) An official billing or postal address;

(j) A declaration by the consumer confirming their address is in the relevant member state; or

(k) An internet protocol (IP) address check.

If a consumer can no longer prove their member state of residence, the content provider will be authorised to cease their access to the service.

These new rules will apply to all fee-based online content, although providers of free services will also have the option to make their content portable in the same way, providing that the consumer's member state is verified. If providers of free content do intend to make such content portable, then before doing so they first need to inform the consumers and the holders of the relevant copyright and associated rights in the online content, of their decision to do so.

Implementation

The next step is that the Regulation will be published in the EU's Official Journal and then the legislation will automatically apply in all member states nine months following this (expected in the first quarter of 2018).

Given the UK's impending exit from the EU (due in March 2019) and that the future form of the relationship between the two has yet to be negotiated, whilst the Regulation will for now have direct effect in the UK, the extent of applicability of this legislation following Brexit cannot yet be determined.

Nonetheless, whilst this legislation is in effect, online content service providers that charge a fee will need to ensure that they put measures in place to grant consumers access to these services from other member states and implement suitable verification measures. Those providers of free content should consider whether they want to implement similar measures.

Furthermore, businesses should be aware that any contractual provisions, such as agreements between providers and copyright holders, which attempt to prohibit the cross-border portability provisions in the Regulation will be unenforceable.

Further developments

On 10 May 2017 the European Commission published a mid-term review of their progress with the Digital Single Market strategy and identified three main areas in which they will be taking further action during 2017 and 2018:

  • development of the European Data Economy to its full potential;
  • protection of Europe's assets by tackling cybersecurity challenges; and
  • promotion of online platforms as responsible players of a fair internet ecosystem.

Therefore we are likely to see further developments in other areas in the coming months.