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Cross-border portability of online content

Ever wished you could carry on binge-watching the latest Netflix series on holiday? Well you'll soon be able to. As part of the European Commission's digital single market strategy, online content services will be made available to subscribers while "temporarily present" in another European member state.

On 30 June 2017, the European Commission published its latest measure designed to break down digital barriers and give consumers better access to online services across the European Union (EU) – Regulation (EU) 2017/1128 on cross-border portability of online content services.

This follows the abolishment of roaming charges across the EU and marks another significant milestone in the Commission's digital single market strategy.

Background to the Regulation

Creating a digital single market across Europe is a key objective of the current European Parliament. An important part of this objective is giving consumers wider and easier access to online goods and services across Europe, thereby enabling both people and businesses to trade and innovate freely in an increasingly digitised world. This latest measure is another step towards achieving this aim. 

What will the Regulation do?

The Regulation introduces a common approach in the EU to the cross-border portability of "paid-for" online content services. This will include well-known services such as Netflix and Amazon Prime, as well as online music services, e-books and video games, for example. Interestingly, the Regulation is wide enough to also cover the portable versions of traditional set-top box services, such as Sky Go. 

This means that those who lawfully subscribe to portable online content services in their member state of residence will be able to access and use their home subscription while "temporarily present" in another member state. 

What are the issues?

The Regulation gives rise to a number of questions, including: What does "temporarily present" actually mean in practice? And for how long will content providers have to provide that content when their customers are temporarily abroad?

Ordinarily, the answers would be found within the regulation, but this unhelpfully says "temporarily present in a Member State means being present in a Member State other than the Member State of residence for a limited period of time". While this leaves the door open for interpretation, for the most part we suspect this will simply cover short business trips and holidays.

What this means for consumers

In a nutshell, this means that you will be able to seamlessly watch your "paid for" online content services anywhere in the EU while temporarily away from home. 

What this means for service providers

The regulation will take effect in all EU member states on 20 March 2018. By this date, all online content service providers must have taken steps to enable the above to happen. Businesses within scope cannot contract out of the Regulation. The Regulation does not apply to services that are provided free of charge, although providers can decide to enable the cross-border portability of free services if they wish.

Operationally, service providers will also need to verify subscribers' "Member State of residence" and continue to routinely monitor this. Service providers should therefore start thinking about any challenges this may bring, particularly from a data protection perspective. A final point to mention is that terms and conditions will also need to be updated to reflect the changes. It is never too early to get the ball rolling with this. 

Broader impact on licensing

From a legal point of view, it will be interesting to see whether the Regulation poses a long-term threat to the territorial licensing of content. There will certainly be some tension between the traditional approach to licensing and distributing content on a territory-by-territory basis and the drive to have a single market for content. 

Logically, the effect of the Regulation suggests an end to territorial exclusivity in licensing content within member states. This has prompted industry commentators to question whether the changes will have an adverse impact on consumers and the audiovisual industry as a whole in the long run.

However, leaving those concerns to one side, this could be an important step towards having multi-territory, pan-European licensing platforms in the EU and achieving the aims of the single digital market.

Looking forward

This article wouldn't be complete without mentioning Brexit. The Regulation will come into force while the UK remains an EU member state and so UK consumers will at least see some benefits before Brexit occurs at the end of March 2019. However, Brexit could certainly throw a spanner in the works, depending on the terms of the UK's exit from the EU and the arrangements put in place – so watch this space.

What is there to take away from this?

For consumers, this will be a welcome addition to the statute books. The film, TV and music industries will be less enthused. Either way, the Regulation represents a great stride towards creating a common digital market. We will of course be monitoring how it operates in practice and keep you briefed of any significant developments. 

If you would like further information on the above, please speak to Dan Read on +44 (0)333 006 1795 or email Dan.Read@TLTsolicitors.com.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at August 2017. For more information see our terms & conditions.

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