As part of the digital single market strategy, on 9 December 2015 the Commission presented a legislative proposal on the cross- border portability of online content services aimed at allowing Europeans to travel with their online content. The regulation was tabled to address the restrictions to the access to online services purchased or subscribed to at home when EU residents are temporarily travelling in another Member State.

The European Parliament appointed Jean-Marie Cavada (ADLE, France) as a rapporteur on the proposal for a regulation of the European Parliament and of the Council on ensuring the cross-border portability of online content services in the internal market. The Committee on the Internal Market and Consumer Protection (IMCO) was an associated committee. The Committee on Legal Affairs (JURI) adopted the Cavada report on 29 November 2016 after the Committee on the Internal Market and Consumer Protection as well as the Committee on Culture and Education gave their opinions. The JURI committee recommended that the European Parliament’ amends the draft text including the following issues:

• The providers of free online content services should be excluded from the scope of the regulation unless they take all necessary measures to permit verification of the Member State of residence of their users.
• The criteria for verification of the Member State of residence of the subscriber should be indicated in a semi-open list and online content service providers are left free to use one or a combination means of verification.
• The holders of copyright and related rights or those holding any other rights in the content of an online content service must be informed of the verification process used by a service provider to verify its subscribers’ Member State of residence.
• Providers of online content services and holders of rights relevant for the provision of those services should not be allowed to circumvent the application of this Regulation by choosing the law of a third country as the law governing their contractual relationships.

The Council agreed on a general approach on a draft regulation aimed at ensuring the cross-border portability of online content services in the internal market on 26 May 2016.

On 7 February 2017, an agreement was reached by the European Parliament, the Commission and the Council (trilogue) on a first reading compromise on the proposal for a regulation on cross border portability of online content services in the internal market.

The new regulation on the portability of digital services across the EU was adopted respectively by the European Parliament and by the Council of the European Union in May and June 2017. The main points of the compromise text are:

• Scope of the regulation. As a matter of principle, the providers of online content services provided against payment of money (such as Netflix, Sky’s Now TV, or Spotify), must ensure the cross-border portability of their services. Providers of free-of-charge online content services (such as public service broadcasters) can, nevertheless, decide to offer portable services to their subscribers provided they comply with the requirements regarding verification of the Member State of residence and inform their subscribers and the relevant rights-holders.
• The notion of temporary presence in other Member States means ‘for a limited period of time’ and covers situations such as leisure, travel for business reasons, or learning mobility. The compromise intends to set some guidance for a ‘fair use’ of the content portability right without affecting existing licensing models (especially the territorial licensing of copyright) and existing financing mechanisms (in particular in the cinema and audiovisual sectors).
• The concept of Member State of residence implies that the subscriber has ‘his or her actual and stable residence’ in this Member State.
• Verification of the Member State of residence. Providers of online content must verify the subscriber’s Member State of residence by using no more than two – reasonable, proportionate and effective – means of verification in a list (including, inter alia, identity card, payment details, location of a decoder, internet or telephone service supply contract, internet protocol (IP) address). Some safeguards were, however, added by the EP to ensure data protection and privacy are respected (e.g. for IP address checks).
• A waiver clause for verification was added at the request of the EP. The verification obligation does not apply when all the holders of copyright, related rights, or other rights in the content used by the provider decide to permit access to and use of their content without verification of the Member State of residence. The holder of the rights can however withdraw the authorisation and – to mitigate a potential imbalance in negotiating relationships between rights-holders and service providers – this possibility cannot be restricted by contract. 

The regulation on portability of digital content has been published in the Official Journal of the European Union on 30 June 2017. The new rules are applicable in all EU Member States since April 2018.

References:

• EP Legislative Observatory, Procedure file on a Regulation on Cross-border portability of online content services in the internal market, 2015/0284(COD)
• European Commission, Proposal for a Regulation on ensuring the cross-border portability of online content services in the internal market, COM(2015) 627

Further reading: 

• European Parliament, EPRS, Cross-border portability of online content services, Legislative Briefing, April 2017 (updated)
• European Parliament, EPRS, Cross-border portability of online content services in the internal market, Briefing Initial Appraisal of a European Commission Impact Assessment, March 2016
• European Parliament, EPRS, EU copyright reform: revisiting the principle of territoriality, Briefing, September 2015
• European Commission, Commission Impact Assessment, SWD(2015) 270
• European Parliament, EPRS, Geo-blocking and discrimination among customers in the EU, Briefing EU Legislation in Progress, July 2016

Author: Tambiama Madiega, Members' Research Service, legislative-train@europarl.europa.eu