The European Commission has announced the next phase of its digital single market strategy.
Following recent consultations on the AudioVisual media services and cable and satellite directives, the Commission’s focus has for the time being shifted back to copyright reform.
Alongside its announcements on the need to tackle legal fragmentation in consumer contract law and low consumer trust when buying online from other countries, the Commission has published a draft regulation on cross border portability.
In brief, the draft regulation would mean that providers of portable online content services are obliged to enable subscribers who are temporarily present in a member state to access and use the service.
For providers of online content services, and for licensors of online content, the key issue is clearly: which services fall within the ambit of the regulation, and what is the effect?
The draft applies to online content services – however, it is restricted to certain services. The consumer must be able to access the service on a portable basis, without being limited to a specific location. They must also have a contract for availability in the given area, or must make a payment for the service, unless the consumer’s member state of habitual residence is verified.
What amounts to the necessary contract for the provision of the service? Would a one off payment for purchase of a connected television with built in online music or content service satisfy the requirement?
Not only are contractual provisions contrary to the regulatory position seemingly unenforceable, but it also appears that a portable online content service cannot choose to remain, for example, a Germany only service, but must alter its systems and processes to allow for cross border portability.
The concept of temporarily present is obviously critical. The regulation goes no further than describing this as being present in a member state other than that in which the subscriber is habitually resident. Therefore, there are no express limits, timing or otherwise which could be a material concern for certain rights holders.
Once adopted, the regulation will apply to providers of relevant online content services on a go forward basis. However, it will also have material retrospective effect in that it will bite on contracts concluded and rights acquired before that date if they impact on the provision, access or use of such services.
By Sam Churney, DLA Piper.
You can read the full version of this article on DLA Piper’s Sports, Media and Entertainment Group website.