Insights EU Geoblocking Regulation: European Parliament adopts implementation report

Geoblocking refers to the e-commerce practice where a trader in one EU Member State blocks or limits access to their website or mobile phone app by potential customers from another EU Member State, restricting the ability of those potential customers to make cross-border transactions. Reasons for geoblocking include concerns about differing legal or tax requirements in the customer’s country, or territorial restrictions that have been imposed on the trader’s rights of distribution.

Under the 2018 EU Regulation on unjustified geoblocking, traders may not block or limit, whether by technological measures or otherwise, a customer’s access to websites or other online interfaces for reasons related to the customer’s nationality, place of residence or place of establishment. Further, a trader may not apply different conditions of access (e.g. price) for reasons relating to the customer’s nationality, place of residence or establishment, where the customer seeks to buy goods (including offline sales), electronically supplied services (other than provision of access to and use of copyright-protected works, such as e-books, music, games and software) or other services.

The Regulation specifically excludes audiovisual services from its scope. This is due to the fact that, when finalising Regulation, EU legislators recognised that territorial exclusivity is a widespread and key feature of the way in which audiovisual content is licensed by rightsholders for distribution.

The Commission is required to evaluate the Regulation periodically and in particular to assess its scope, including consideration of whether the Regulation should apply to electronically supplied services the main feature of which is the provision of access to copyright protected works. As reported by Wiggin previously, the Commission and two Committees of the European Parliament (CULT and LIBE) provided opinions on the implementation of the Regulation, including whether or not to amend the current exclusions, with differing conclusions. On 7 November 2023, the European Parliament’s IMCO Committee published a report on the implementation of the Regulation which was adopted by the Parliament in plenary on 13 December 2023.

The report welcomes the progress made in the cross-catalogue availability of music, e-book, video game and software products and services and notes that geoblocking in the book sector does not concern the vast majority of consumers. It also notes that online music streaming or on-demand services are widely available across the EU, and that most of the major music streaming services are available in all EU Member States, although the report raises a concern that obstacles still exist where different terms or payment methods are imposed on consumers making cross-border sales.

As for audiovisual content, Parliament regrets the limited improvements made in the cross-catalogue availability of audiovisual content and live sports events, pointing out the particularly negative consequences for citizens living cross-border or belonging to linguistic minorities, who may wish to watch content such as movies or TV series in their native language. Parliament calls on the European Commission to propose tangible solutions that would allow consumers legal access to such content across borders. Specifically, Parliament recommends that, owing to the audiovisual sector’s complexity, as a result of factors such as diversity of content, providers, business models, consumer’s preferences and licensing models and complex value chains, the Commission should consider a gradual approach, targeting specific types and distribution models one by one, gathering additional evidence before further steps are taken. Realistic timeframes should be established to enable providers of audiovisual services time to adapt business models to new rules and ensure the preservation of cultural diversity and quality of content. Parliament makes the point that, instead of undermining the tools used by consumers to avoid geoblocking restrictions, it might be more effective to modernise and adapt audiovisual services business models to new consumer expectations in terms of affordability, flexibility and quality of content.

The report does acknowledge that the inclusion of audiovisual services within the scope of the Regulation “would result in a significant loss of revenue, putting investment in new content at risk, while eroding contractual freedom and reducing cultural diversity in content production, distribution, promotion and exhibition” as well as emphasising that such an inclusion “would result in fewer distribution channels, ultimately driving up prices for consumers”. According to reports, this was a last-minute amendment proposed by MEP Sabine Verheyen, a member of the CULT Committee which had previously concluded that widening the scope of the Regulation would not bring substantial benefits to consumers.

The Commission is not required to formally review the Regulation until 2025 when it will have to resolve the conflicting views of the Parliamentary Committees on the scope of any revised Regulation.

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