Netflix subscribers have most likely already had the experience of not being able to watch their TV shows or movies during a stay in another EU Member State because these are unavailable over there. In the future, it will not be the case anymore.
In May 2015, the European Commission presented its strategy for the digital single market that aims for eliminating obstacles still existing online and for promoting online cross-boarder activities.
One of the proposals aims to extend the portability of the online media services and to ensure that digital content is not only available in the country where it has been bought.
The application of copyright involves limitations and despite a certain harmonisation at an European level it still has a considerable national nature. The strategy for the digital single market also gives priority to the modernisation of the European copyright legislation and its adaptation to the current functioning of the online market.
The proposal for a European regulation in order to make the online content more available and to supress the obstructions by the geo-blocking is an important step in this framework. The proposal for a regulation already dates from December 2015 but the Council has only formally adopted the regulation on 8 June 2017.
1. The geo-blocking
Due to the so-called geo-blocking the online media services providers can limit consumer access and make the content depending on the place where the consumer is located.
The geo-blocking is not only an obstacle in this sector. Some merchants restrain access to their online store to certain Member States or ensure that the conditions depend on the country where the consumer resides. The European Commission wishes to put an end to this situation and has already made a proposal to take this obstacle down.
The collection and distribution of copyrights are the basis of the restriction of the cross-boarder portability. The copyrights concerning the digital content are subjected to licensing agreements between films, TV-shows and books distributors and online media services providers. Given that these licensing agreements often include geographical restrictions (for exclusivity purposes), the providers are required to prohibit the access to their services from IP addresses outside the agreed geographical area.
It will soon belong in the past. The European Commission regards the geo-blocking as an unjustified barrier to the single market. The proposal for a regulation will bring an end to it.
2. The services under the scope of the Regulation The Regulation only deals with online content services that are offered against payment, such as Netflix or Spotify, and free online content services, provided that operators control their subscribers' home member state.
Online content services that offer their content for free, and do not control their users fall outside the scope.
Payment for these services can be both direct and indirect. The Commission gives as an example of indirect payment the situation where a subscriber pays for a service package that combines a telecommunications service with an online content service of another provider.
On the other hand, when a provider places content online, without the user having to register, the content must not be accessible in other member states.
The proposed Regulation provides that online media service providers can not be held liable for any breaches of their licensing agreements that conflicts with the obligation to provide access to content in another member state. In other words, geographic restrictions in license agreements will not be enforceable against providers.
The provision of online content to subscribers temporarily residing in a member state other than their home member state shall be deemed to have taken place in the subscriber's home member state.
3. The protection of privacy
In the motivation of its proposal, the Commission gave special consideration to the protection of privacy.
The copyright holders on the content put on the market by the providers have the right to demand that the provider uses the effective measures to determine whether the online media service is provided in accordance with the Regulation. The measures that the providers need to take into account should not affect the subscriber's privacy.
The Commission notes in this respect that it is not the intention that users should be under permanent control but that this IP address check can be performed at random. Here the Commission argues that the precise details of the subscriber may not be collected and processed for this purpose since the location is not really important for this control but rather the member state where the subscriber accesses the service. In addition, if subscriber authentication is sufficient to access the digital content, no identification of the subscriber must be required.
4. Still a little patience ...
The Regulation will enter into force nine months after publication in the Official Journal of the EU. It is assumed that the new rules will be applied from the first or second quarter of 2018.