The European Commission published a series of copyright reforms in its Digital Single Market (“DSM”). This included a Regulation on the cross-border portability of online content services that aims at enabling consumers to use their home online subscription that originated in their country of residence while they stay temporarily in another Member State. This is accomplished by the effective removal of the right for copyright owners to bring infringement action in the temporary state of residence.
Only subscribers from the original Member State will have access to the portable content. This will not apply to all consumers and services, e.g. if you are a resident of Bulgaria and you want to subscribe to BBC iPlayer which is not provided for the territory of Bulgaria you shall not be able to use the online portability. The portability right shall be available only if you have a subscription for a service that is provided in your state of residence.
Currently there are restrictions on the availability of audio-visual services, some music streaming services and premium sports offers when people are travelling between different Member States nevertheless they have a paid subscription to an online content provider in their country of residence.
The reform aimed by the European Commission is to enable consumers to use their online subscription while temporally being in another Member State. For example, if you have a Netflix subscription in Bulgaria you will be able to use your Netflix account while on holiday in Spain or while travelling across different Member States.
The Commission wants this type of content to be portable because of the projected growth of online content services, the increasing mobile use of content and the high interest in cross-border portability expressed by young Europeans.
The European Commission believes with the removal of the roaming charges across EU the online portability shall become even more important and useful for all EU citizens.
Some of the key points from the proposed Regulation:
Definitions of “Member State of residence”, „Portable“ and „Temporarily present“
The Regulation defines “Member State of residence” as Member State where the subscriber is habitually residing. At this stage of the Regulation negotiations this definition is attracting a vast discussion as it is not clear how it will be defined in practice by the online content providers, which is the Member State of residence. Some of the opinions expressed are that the Regulation needs to be more specific in the defining habitual residing.
The Regulation defines “portable” as subscribers effectively accessing and using the online content service in the Member State of residence without being limited to a specific location.
“Temporarily present” has been given a broad definition; „a presence of a subscriber in a Member State other than the Member State of residence“, e.g. those on holiday or business trips. As it is with the definition of Member State of residence most of the consultation about the Regulation cannot come to a one definite solution on the matter of temporally present. There are suggestions for time limitation per year, e.g. 60, 90 days, and on the contrary the suggestion for no limitation as it is in the present form of the proposed Regulation. The no time limitation seems to be more preferable for the consumers to certain extend. However, for the online content providers it appears to be more technically demanding to observe over the course of the subscription how much time the subscriber has been temporally out of the Member State of residence and to request frequent confirmation and data collection from consumers on their residency and travels.
The service providers need to inform their subscribers of the exact conditions of their portability offers. The copyright holders can also require providers to periodically authenticate the Member State of residence of subscribers in order to avoid abuses. This will be another technical matter that has to be addressed to the service providers as it is related to the implementation of the measures for data protection of the consumers. There are still unanswered questions as how the providers will determine the Member State of residence, what information will be sufficient for the determination and authentication, how often the providers need to update the authentication of a subscriber.
Rights clearance and territorial exclusivity
The Regulation deals with the issue of copyright infringement and rights clearance by stating that the relevant acts of reproduction, communication to the public and making available of works should be deemed to occur in the subscribers’ Member State of residence. This removes the rights holders’ ability to take actions in the temporary state of presence so there is no need for a separate licence to cover the temporary use of the service in other Member States.
The main issue of the right holders and content owners who have licensed their content to an online service provider, is the fact that the Regulation stipulates that the content will be available through the same service in other Member States different from the Member State that has licensed for and that there will be nothing they or the service provider can do to prevent this.
Cross-border distribution of content
Currently the proposals do not challenge the territorial exclusivity of licences and the Commission has not yet gone so far as to say that consumers in one Member State must have free access to services in other Member States.
The Commission considers legislative proposals aimed at further enhancing cross-border access to online television and radio broadcasting services. The Council Directive 93/83/EEC on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission currently only requires copyright clearance in the “country of origin”. As this Directive was devised before the advent of the Internet, the Commission may extend the country of origin principle to the online distribution of TV and radio programmes. Whilst the Commission has stated that it is not introducing pan-European licences, it may adopt proposals to encourage rights holders and distributors to reach agreement on licences that allow both cross-border access to content and cross-border requests to access content.
Service provider obligations, proportionality and costs
The obligation on service providers to enable cross-border portability is imposed only under certain conditions. The Regulation will not require rights holders and service providers to renegotiate existing contracts, as it will simply make unenforceable any provisions in the contracts which are contrary to cross-border portability.
Whilst online service providers must ensure they are providing their subscribers access to the same content on the same range and number of devices, number of users and functionalities as those offered in their Member State of residence, the Regulation does not require the providers to ensure quality of delivery of such services beyond the quality available via the local online access chosen by the subscriber in the temporary Member State. Nevertheless, providers will be bound by, if they have provided a consumer an express agreement guaranteeing certain quality of delivery to subscribers while temporarily present in other Member States.
The Regulation does capture online content services which are provided for without payment to the extent that those providers verify the Member State of residence of their subscriber. Once again it will be a technical matter how providers with free services will cope with the requirement for authentication of consumers Member State of residence so that their service may be portable within the EU.
The Commission envisages that implementing the Regulation will imply only marginal costs for service providers, which will mainly relate to adapting their technical infrastructure i.e. moving from a geo-blocking to a temporary access approach.
Further, the Commission has made it clear that it is not appropriate to require service providers that do not offer portable services in their home country to do so across borders.
The new rules will need to be discussed with and endorsed by the European Parliament and the Council of the European Union. However, the Commission wants to have the Regulation approved swiftly in 2016 so it is fully operational during the course of 2017, in the same year as the end of roaming charges in the EU. The Regulation will enter into force on the day it is published in the Official Journal of the European Union and will apply six months after it is published. The Regulation will be directly applicable – there will be no need for Member States to implement the rules into national law.
Ms. Donika Ilieva, ICT and IT specialist, took part of a consultation and discussion of the Regulation. The consultation was co-organised by the European Parliament Information Office Bulgaria and MEP Eva Paunova and was attended by representatives of the rights holders, state bodies, consumers’ agencies, music producers and practising lawyers.
Our team shall follow the development of the legislative proposal and shall upload swiftly new materials on the topic.
The article above is intended for information purposes only by drawing your attention to the newest legislative proposal by the European Commission. It should not be construed as (binding) legal advice. For a thorough understanding of the subjects covered and prior acting on any issue discussed we kindly recommend Readers consult Ilieva, Voutcheva & Co. Law Firm attorneys at law.
If you have questions regarding the topic or you are in need of a consult please contact Ms. Donika Ilieva at Donika.email@example.com.