On 8 June 2017, the Council of the European Union adopted the much-discussed Regulation on portability of digital services across the EU. This represents the clearing of the final procedural hurdle before the requirements of the Regulation apply, which is anticipated to be in the first quarter of 2018 (i.e. nine months following publication of the Regulation in the Official Journal of the European Union).
The Regulation is aimed at achieving the EU’s digital single market ambitions (in tandem with other measures such as the ending of mobile telephony roaming charges), by addressing the manner in which some online content services, such as those providing films, sports broadcasts, music, e-books and games, have not been available to their users when they are travelling outside their home country within the EU, typically by being geo-blocked to their home country. So, the key features of the Regulation will be:
- an obligation on all providers of paid-for portable online content services to subscribers in their “Member State of residence” to provide those services to those subscribers while they are “temporarily present” (e.g. on holiday, business trips or limited student stays) in another EU Member State, without additional charge (NB “Member State of residence” and “temporarily present” being concepts defined in the Regulation) – although providers are not required to apply the same quality of service in other Member States as in the Member State of residence;
- a provision which establishes that the provision of such a service is deemed to take place solely in the subscriber’s home Member State, in order to address the problem that online content service providers often do not have the relevant rights, such as intellectual property rights, to provide their content in other Member States;
- provisions designed to regulate the methods which online content service providers may use to verify a subscriber’s Member State of residence in order to apply the portability requirement above (e.g. IP address checks and subscriber payment details) – these methods must in any event be reasonable, proportionate and effective;
- an option (rather than a requirement) for providers of free portable online content services to opt into the portability requirement, i.e. they may elect to be subject to the portability requirement above in order to enjoy the benefit of the deeming provision, allowing them to provide their online content services to their users while outside their Member State of residence; and
- provisions preventing content rights holders and online content service providers from contractually circumventing the portability requirement, irrespective of the governing law of their contractual relationships, and applying the Regulation to contracts and rights agreements concluded before the Regulation comes into force.
The intention is to improve competitiveness by encouraging innovation in online services and attracting more consumers, to contribute to the creation of a truly internal market for digital content and services, in which regard the Regulation includes provision for review of its operation after three years.
The pre-publication text of the Regulation is available here.