After publication in the Official Journal of the European Union, Regulation (EU) 2017/1128 of the European Parliament and of the Council of 14 June 2017 on cross-border portability of online content services in the internal market (‘Regulation’) enters into force 20 July 2017, and will become enforceable 20 March 2018.

The Regulation focusses on seamless access to online content services across Member States. Consumers shall have access to the online content services which they have subscribed to, regardless whether they are temporarily present in a Member State other than the Member State of residence for a limited period of time. The Regulation stresses that a number of barriers hinder the provision of online content services, such as music, games, films or entertainment programmes, to consumers temporarily present in a Member State other than their Member State of residence. The barriers stem from the fact that the rights for the transmission of content protected by copyright or related rights, such as audiovisual works, are often licensed on a territorial basis, as well as from the fact that providers of online content services might choose to serve specific markets only.

Notably, the Regulation applies also to contracts concluded before the date of the Regulation’s application.

The Regulation applies to providers whose services are provided against payment of money. Providers whose services are provided without payment of money do not fall within the scope of the Regulation. They may, however, decide to enable cross-border portability of their services in accordance with the Regulation.

Provision of unrestricted cross-border access to online content services

As of 20 March 2018, providers of online content services, i.e., audiovisual media services and services the main feature of which is the provision of access to and the use of works, other protected subject matter, or transmissions of broadcasting organisations – whether in a linear or an on-demand manner – shall enable their subscribers who are temporarily present in a Member State to access and use the online content service in the same manner as in the Member State of residence.

This shall include access to the same content, on the same range and number of devices, for the same number of users and with the same range of functionalities. The provider shall not impose any additional charges on the subscriber.

Unfortunately, the Regulation does not provide for sufficient guidance on the question of when a subscriber is only ‘temporarily present in a Member State’; the Regulation states that this shall be given in case of a ‘limited period of time’.

Verification of the subscriber’s Member State of residence

At the conclusion and upon the renewal of a contract for the provision of an online content service, the provider shall verify the Member State of residence of the subscriber by using not more than two of the means of verification, as identified in the Regulation, such as the subscriber’s identity card, payment details, place of installation of a set top box, billing address, postal address, or IP address.

Providers shall comply with the obligation to verify the Member State of residence of subscribers of existing contracts by 21 May 2018.

Protection of personal data

Since the verification procedure includes the collection and use of personal data, the means of verification shall be reasonable, proportionate and effective. Data collected for the purpose of verification shall be used solely for this purpose. In particular, these data shall not be communicated, transferred, shared, licensed, or otherwise transmitted or disclosed to right holders or any other third parties. Upon completion of each verification, the data shall be immediately and irreversibly destroyed.

Right holders cannot prevent cross-border provision under the Regulation

The provision of cross-border access to online content may be in conflict with the provider’s licence restrictions.

In order to avoid that right holders may seek to prevent provision of online content services in other Member States, based on the limited geographic scope of the provider’s licence to use and make available the content, the Regulation sets forth that the provision of an online content service to a subscriber who is temporarily present in a Member State other than the Member State of residence shall be deemed to occur solely in the subscriber’s Member State of residence.

Further, the Regulation makes clear that any contractual provisions, including those between providers of online content services and right holders, which are contrary to the Regulation, shall be unenforceable.

This leads to the result that right holders will need to tolerate distribution of their content even in jurisdictions where they have not granted any licence.

Conclusion

Companies providing online content services should have in mind the Regulation’s due dates, and are called on to start preparations to ensure that subscribers will have cross-border access.

While consumers will enjoy unrestricted access to the contents they have subscribed to, right holders will not be able to prevent cross-border provision of online content services.