Copyright in the Digital Single Market. Analysis and Implementation of the New Directive. The Portability Regulation
14/02/2020

Introduction

The Portability Regulation is one of the first legal instruments adopted to implement the digital single market strategy, more particularly as to its first pillar (“a better access to online goods and services for consumers and businesses across Europe”), together with the regulation prohibiting unjustified geo-blocking (1) (the “Geo-blocking Regulation”) and the abolishment of roaming charges on 15 June 2017 (2).


Objective

The Portability Regulation aims to ensure that subscribers to portable online content services which are lawfully provided in their Member State of residence can access and use those services when being temporarily present in another Member State (3).


Scope

The Portability Regulation defines its scope of application through the definitions of its key concepts on the one hand (“subscriber”, “Member State of residence”, “temporarily present in another Member State”, “online content service” and “portable”) (4), and through the obligation enshrined in article 3 for the provider of an online content service provided against payment of money (the « Relevant Provider ») to ensure cross-border portability on the other hand.

Accordingly, the Portability Regulation does not apply to providers of an online content service provided without payment of money (unless they choose to be subject to the whole Portability Regulation) (5). While online content service providers such as Netflix or HBO must enable their subscribers to enjoy their subscription anywhere in the EU, providers of free online content services, such as public broadcasting channels, do not have such obligation. This is why for instance Belgian viewers who try to access RTL Play from another Member State may fail, while their paid for Netflix selection remains fully available (6).


Core principles

Pursuant to article 3 of the Portability Regulation, the Relevant Provider must enable a subscriber who is temporarily present in a Member State to access and use the online content service under the same terms as in their Member State of residence and without imposing any additional fees (7). However, the Relevant Provider has no obligation to guarantee the same service quality as in the Member State of residence: it must merely refrain from taking any action affecting such quality (8).

Two other provisions are crucial to implementing the purpose of the Portability Regulation.

First, article 4 establishes a legal fiction by considering that the acts of reproduction, communication to the public and making available of works and other subject-matters protected by copyright or neighbouring rights, as well as the acts of extraction or re-utilization in relation to databases protected by sui generis rights, are deemed to occur solely in the subscriber’s Member State of residence (9).

Second, article 7 provides for the unenforceability of any contractual provisions between the Relevant Provider on the one hand and the holder of copyright or the subscriber on the other hand which are contrary to the Portability Regulation. In other words, parties to an agreement on online content services may not deviate from the Portability Regulation.

Finally, when entering into or renewing a contract for the provision of online content services with the subscriber, the Relevant Provider must verify the subscriber’s Member State of residence by using not more than two of the means of verification listed in article 5 of the Portability Regulation. Tied into this verification obligation and with a view to guaranteeing proportionality, article 8 makes the link between the Portability Regulation and data protection rules by imposing a strict limitation on the processing and the storage of personal data collected pursuant to article 5.


Application, transitional provisions and review

The Portability Regulation is the first legal instrument in the field of copyright and neighbouring rights which is binding in its entirety (10). It has been applicable since 1 April 2018 (11).
Transitional arrangements are however provided.

The European Commission will perform an assessment of the application of the Portability Regulation by 21 March 2021.


Potential application challenges

Although a detailed analysis of the Portability Regulation goes beyond the scope of this short newsflash, a number of potential challenges can be highlighted.

First, from an enforcement perspective, the Portability Regulation blatantly lacks any sanctions that can be triggered in case a Relevant Provider fails to comply with its obligations as well as any remedies for subscribers.

From a more practical standpoint, several other issues were raised by the director of DG Connect Roberto Viola in an open letter to the Member States (12).

Mr. Viola points out four practices by Relevant Providers observed by the Commission which are liable to hinder consumers from enjoying portability:

-    limiting portability to a specific period of time, while the Portability Regulation does not allow such limitation;

-    requesting more information than that required to verify the Member State of residence;

-    using checks of IP addresses to monitor consumers' whereabouts on a regular basis;

-    limiting the range of devices on which portability is available.

The annex to Mr. Viola’s open letter provides more details as to why the Commission considers that these practices do not comply with the Portability Regulation.


Flash Eurobarometer 477a Report and feedback from the European Audiovisual Observatory

Last but not least, the Flash Eurobarometer 477a Report (the « Eurobarometer») (13), commissioned by DG Connect, and a report produced by the European Audiovisual Observatory (the « EAO Report ») (14) upon request from the European Commission as well provide relevant initial data on the Portability Regulation.

Without delving into the statistical elements of the above studies, some of the trends identified and conclusions made are worth mentioning.

The Eurobarometer shows amongst others that :

-    most interviewees are aware that they can access their online content subscription in another Member State;

-    close to half of the interviewees who have travelled since 2018 have tried using their online content services subscription while travelling to another Member State (15);

-    close to under 60 % of users who have tried using their subscription from another Member State stated that they were able to do so, and 15 % of these users experienced a more limited selection of content than the one available in their Member State of residence.

The EAO Report only looks at the opt-in provided in article 6 of the Portability Regulation : the European Audiovisual Observatory surveyed by questionnaire more than 50 providers of free online video services, including both specialised service providers and public and private broadcasters, out of which only 25 providers answered the questionnaire.

Although it is too early to provide an indicative overview of whether and how free online services providers have implemented the Portability Regulation, it is worth mentioning that four of the providers which answered the questionnaire (including « rtbf.be » and « VRT NU ») have opted in (two of them are preparing for it, seven of them are considering it, and twelve of them have ruled it out). Reasons for opting in include consumers’ demand satisfaction and providing improved public service. Reasons for not opting in include technical challenges related to the verification requirement, mismatch with the pursued business model and the lack of priority given to the question. 


(1) Regulation (EU) 2018/302 of the European Parliament and of the Council of 28 February 2018 on addressing unjustified geo-blocking and other forms of discrimination based on customers' nationality, place of residence or place of establishment within the internal market and amending Regulations (EC) No 2006/2004 and (EU) 2017/2394 and Directive 2009/22/EC, OJ  L 601, 2 March 2018.
(2) Commission Implementing Regulation (EU) 2016/2286 of 15 December 2016 laying down detailed rules on the application of fair use policy and on the methodology for assessing the sustainability of the abolition of retail roaming surcharges and on the application to be submitted by a roaming provider for the purposes of that assessment, OJ. L344, 17 December 2016.
(3) Article 1 of the Portability Regulation.
(4) Article 2 of the Portability Regulation.
(5) Such opt-in is provided in Article 6 of the Portability Regulation.
(6) This is also not to be confused with the abovementioned Geo-blocking Regulation, whose main purpose is to prohibit e-commerce players from discriminating against customers on the basis of nationality or country of residence. The Geo-blocking Regulation thus enables, for instance, a German consumer to purchase clothes on an Italian website under the same access conditions as Italian consumers (although the Geo-blocking Regulation contains exceptions to the general prohibition).
(7) That is by providing access to the same content, on the same range and number of devices, for the same number of users and with the same range of functionalities.
(8) Article 3.3 of the Portability Regulation.
(9) Recital (24) in conjunction with article 4 of the Portability Regulation.
(10) F. GOTZEN, « De komende Europese wetgeving in een notendop”, A&M, 2016/5-6, p. 474.
(11) The Portability Regulation has been applicable in most EFTA Member States (Iceland, Liechtenstein, Norway) since 1st August 2019.
(12) Letter to the attention of the competent national authorities on the application of Regulation (EU) 2017/1128, 1 June 2018, available at https://ec.europa.eu/digital-single-market/en/news/portability-regulation-letter-sent-competent-national-authorities (Last visited 15 March 2019).
(13) Flash Eurobarometer 477a, “Accessing content online and cross-border portability of online content services”, April 2019, https://ec.europa.eu/commfrontoffice/publicopinion/index.cfm/Survey/getSurveyDetail/instruments-/FLASH/surveyKy/2221 (Last visited 24 July 2019). To generate such report, Kantar Public Brussels surveyed by telephone 26.583 interviewees throughout the EU from 27 February 2019 to 5 March 2019.
(14) European Audiovisual Observatory, “First feedback from the implementation of the Portability Regulation by free online video services”, July 2019, https://rm.coe.int/first-feedback-from-the-implementation-of-portability-regulation-by-fr/168095f331 (Last visited 24 July 22019).
(15) Regardless of whether such subscription is free or paid for.

Related : Hoyng Rokh Monegier ( Mr. Matteo Mariano )

Mr. Matteo Mariano Mr. Matteo Mariano
Associate
matteo.mariano@hoyngrokh.com

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