New rules on portability of online content services

Many online content services such as Netflix and Spotify already provide the facility for subscribers to access the service from abroad. This will become a legal requirement within the EU from 20 March 2018 under new EU rules (Regulation 2017/1128).

The new regulation provides that service providers must enable subscribers to access paid-for content such as music, games, films and sports without extra charge when they are temporarily present in a Member State other than their home Member State, for example on holiday or on business. The new rules are part of the European Commission’s Digital Single Market initiative, which it has identified as one of its top ten political priorities. One of the main aims of the Digital Single Market is better access to digital goods and services across Europe.

Which subscribers are affected?

The obligation applies to paid-for services only. However, a service provider may choose to provide portability  to “free” subscribers as well. A subscriber here means a consumer – i.e. a natural person acting outside his or her trade, business, craft or profession.

What type of access has to be provided?

The subscriber is entitled to use the service in the same manner as in their home Member State, including access to the same content on the same number of devices and to the same number of users. The service provider does not have to comply with quality requirements that apply in the home country although it must not deliberately reduce the quality of delivery either, and it must inform the subscriber about the quality of delivery he or she can expect when abroad.

Verification

The service provider is obliged to verify the subscriber’s home Member State of residence using not more than two of a list of verification methods set out in the regulation. The need for verification may, however, be waived by the relevant content owners.

How long is temporary?

Temporary is not defined beyond being for “a limited period of time”.  This is an uncertainty which may cause difficulty for service providers in providing the service.

What about copyright and other rights clearances in the other Member State?

Under the Regulation the provision of the service abroad is deemed to be provided in the home Member State, so that extra clearances will not be necessary.

How are existing contracts affected?

Portability applies to existing contracts, and service providers must verify the Member State of residence of existing subscribers to paid-for services by 21 May 2018. In the case of free services, verification of existing subscribers must take place within two months of the first provision of portability under the Regulation.

Will Brexit affect it?

The obligation to provide portability will commence on 20 March 2018, before the UK leaves the EU. Under the UK Government’s current proposals for withdrawal, the Regulation would automatically be incorporated into UK law at Brexit but may be subject to amendment afterwards.  It is not clear how the question of rights clearances in the other Member States would be dealt with once the UK is outside the EU.  Service providers may wish to raise this issue with copyright and other content right holders sooner rather than later to ensure continuity of service.

Contact our experts for further advice

Tom Lingard

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