Chillin'Competition

Last time Alfonso wrote on the Cross-Border Pay TV case (and the commitments offered by Paramount), he mentioned that the geo-blocking of copyright-protected content is not really a competition law issue. It is an intellectual property matter that should be addressed as such.

As the law stands, online providers can lawfully offer copyright-protected content only in the Member States for which they hold a licence. If they reach Internet users based in other Member States, they will infringe copyright. This reality will not change simply by declaring geo-blocking clauses to be restrictive of competition. The copyright infringement will not be less of a copyright infringement simply because some licensing agreements are amended.

Geo-blocking will only become a thing of the past if the Commission is able to persuade Member States to amend copyright legislation so that the ‘country of origin’ principle applies to online content. Where the ‘country of origin’ principle applies, a broadcaster that holds a licence to offer content in one Member State can reach users in the whole of the EU. This principle applies to satellite broadcasting. It is in light of this principle that the ECJ judgment in Murphy can be understood.

As part of the Digital Single Market Strategy, the Commission consulted last August on the possibility of extending the ‘country of origin’ principle to online transmissions. The results of the consultation have now been published, and can be checked here. In light of the responses, it looks like geo-blocking is here to stay. I do not have the impression that the idea gathers the necessary consensus, in particular considering the impact it would have on right holders and licensees.

The pro-status quo (or pro-blocking, if you prefer) side includes: right holders (no surprise), commercial broadcasters (read: Sky, Mediaset and all the others who devote substantial resources to buy content) and collective management organisations. More importantly, Member States appear to be, at best, lukewarm about the initiatives (the Commission report says that ‘there is a strong call for caution’ on their part). Certain Member States (can you guess which?) appear to oppose the initiative outright.

The pro-change (or anti-blocking) side includes: users (no surprise), public service broadcasters, commercial radios and ISPs.

If there is no enthusiasm for copyright reform, the open question is of course whether the case against the major studios and Sky has a point. Interestingly, many of the participants in the consultation (and in particular Member States) insisted on the need to respect ‘contractual freedom’. A bon entendeur…