Digital Single Market: Copyright reform and proposed new regulation on the cross-border portability of online content

The European Commission today set out its plans for the reform of copyright as part of its Digital Single Market initiative, and published a proposed new regulation on the cross-border portability of online content.

The new regulation would require providers of online content services, including online television, videogames and music services, to allow their subscribers to access their service whilst temporarily in another EU Member State. Andrus Ansip, Vice President for the Digital Single Market, announced the proposal, saying: “We want to ensure the portability of content across borders. People who legally buy content – films, books, football matches, TV series – must be able to carry it with them anywhere they go in Europe.”.

What the draft regulations says

The main provisions of the draft regulation are:

• Obligation to provide access: Providers of online content services will be required to give their subscribers access to their services when they are temporarily present in other Member States. Being temporarily present is defined as a presence in a Member State other than the Member State in which the subscriber is habitually resident, so it would appear to catch long and/or regular periods of presence in other Member States.
• Service deemed to occur where subscriber usually resident: The provision of a service to subscribers temporarily present in other Member States will be deemed to occur solely in the Member State of the subscriber’s residence. This is intended to avoid copyright and regulatory concerns.
• Override of contractual provisions: Any contractual provisions that are contrary to the operation of the regulation will be unenforceable, including contractual provisions between copyright holders and service providers. The current proposal is that this would apply to all contracts, even those entered into before the regulation comes into force.

Concerns of rights holders

The new regulation is only a proposal at this stage and it will need to be agreed by the Council and the European Parliament. It will be controversial with some rights holders, who may be concerned that it will make it harder to prevent content that is only licensed for consumers in one Member State from being accessed by consumers in other Member States.

Action for online content service providers

If the regulation does come into force, online content service providers will need to ensure they have adequate systems in place to confirm where their subscribers are habitually resident, so that they can determine whether or not subscribers are only temporarily present in a Member State.

If they are temporarily resident, then online content service providers will be required to provide their service to them, but if they are not, and providers do provide their service, then such providers risk infringing copyright if they do not have a pan-EU licence. The draft regulation does allow copyright holders to require service providers to use specified means to verify the habitual residence of their subscribers, but only if these are reasonable.

Other proposals on copyright and intellectual property expected from the Commission

The Commission’s action plan for the reform of copyright, titled “Towards a modern, more European copyright framework”, sets out a number of other legislative proposals that the Commission intends to bring forward, or will consider bringing forward, in the next few years. These include proposals to:

• Enhance the cross-border distribution of television and radio programmes online following the Commission’s review of the Satellite and Cable Directive. The Satellite and Cable Directive provides that the communication to the public of traditional satellite broadcasts occurs solely in the Member State where the signals are introduced – the so called ‘home territory principle’. The Commission is considering an extension of this principle to the online distribution of audio-visual content.
• Support right holders and distributors to reach agreement on licences that allow for cross-border access of content.
• Amend and harmonise the current copyright exceptions allowed under EU law.
• Alter the definition of the ‘communication to the public’ and the ‘making available’ rights, to address concerns that the rise of certain online platform and aggregation services means that the value generated by some forms of content is not being shared fairly.
• Toughen the legal framework for the enforcement of intellectual property rights, which could include positive obligations on online platforms.

The draft regulation (formally titled “Regulation of the European Council and Parliament on ensuring the cross-border portability of online content services in the internal market”) is part of the Commission’s Digital Single Market initiative, on which we have a dedicated hub here.