On 29 November 2016, the Legal Committee of the European Parliament approved the regulation on “ensuring the cross-border portability of online content services” (the “Portability Regulation”). So far, the Portability Regulation is the only remaining provision of what was a much larger proposal to create a digital single market in Europe, which initially even provided for the complete elimination of territorial licences and thus of the traditional principle of territoriality.

The Legal Committee’s amendments do not significantly change the basic principles of the regulation. Notable amendments include:

Content service provider must ensure quality standards

The previous proposal established that the content service provider does not owe a certain quality of services to the subscriber; at least not the same quality as in the customer's home country.

The amendments to the proposal now provide that the quality of the services may not be worse than the usual quality standard that the online service provider offers in the country in which the user is currently staying. The online service provider will only be liable for quality that is worse than that of the customer’s home country if it has assumed a corresponding guarantee for this. The service provider must inform its users about the quality of content demanded abroad.

User’s principal place of residence may be verified

In order to determine the user’s principal place of residence, the online service provider may demand certain information for verification (ID, bank details, place where decoders are installed, etc.). If the user does not provide this information, the portability need not be guaranteed. If doubts remain in spite of the verification, the online service provider is permitted to ask for means of verification again (once a year at most).

The provider is supposed to retain the data collected until complete verification. Data should be used for the purpose of verification only and may not be transmitted to the holders of the rights or to third parties.

Meaning of “temporary” remains too vague

A prerequisite for the cross-border use of the portable content is that the user is present in another Member State only “temporarily”. How long the temporary presence may last is still unclear.

It still has not been fully clarified to what extent, for instance, au pair or Erasmus stays in other Member States are covered by the regulation. What is certain is that the concept of temporary presence may not mean only a few days. Considering a stay of more than six months to be “temporary”, however, may be stretching the meaning of the word.

The purpose of the stay is also of some importance. The draft speaks of leisure, studies or work purposes, which is quite a broad scope. Particularly the reference to the purpose of studies suggests the intention not to limit the stay to only a few weeks.  The final wording of the Portability Regulation is now being negotiated between the members of the EU parliament and the governments of the Member States. According to current plans, it is to come into effect in June 2017.