Digital Single Market update: Part 1, Portability

The Digital Single Market has been a topic of conversation for some time now, but there has been significant progress in 2018 to-date. Part 1 of this article summarises the UK enforcement of cross-border portability of online content services, which came into force as of 1 April 2018. Look out for part 2, which will provide an update on geo-blocking.


Content portability – UK enforcement

The Portability of Online Content Services Regulations 2018 (SI 2018/249) (UK Regulation) was laid before UK Parliament on 28 February 2018, and came into force on 1 April 2018. Whilst the Regulation (EU) on cross-border portability of online content services (EU Regulation) is directly applicable in the UK, the UK Regulation serves to ensure enforcement of those terms.

Consultation on the UK Regulation

The Intellectual Property Office ran a consultation on the UK Regulation from 3 January to 31 January 2018, which focused on six means of enforcing the EU Regulation and how these enforcement means will apply to each section of the EU Regulation. These included: (1) private civil litigation for breach of the Regulation; (2) private contractual enforcement; (3) Data Protection Act 1998; (4) Copyright, Designs and Patents Act (CDPA) 1988; (5) Consumer Protection from Unfair Trading Regulations (CPUTR) 2008; and (6) Enterprise Act 2002, i.e. state civil enforcement via Ofcom, for example. For a detailed assessment of how these different enforcement means would apply, see annex B of the consultation.

The consultation asked businesses if: (i) the government had identified the most appropriate means of legal enforcement and enforcement bodies; and (ii) if a review mechanism every five years is sufficient to effectively assess the enforcement means.

Response to consultation

The Intellectual Property Office published the response to the consultation on 15 March 2018. The key points are:

  • The government agreed with the feedback that enforcement mechanisms should be proportionate and not place an unnecessary burden on service providers. As such, they have amended the UK Regulation so that the requirement to verify the home country of subscribers is an actionable breach by the subscribers themselves, rather than enforceable by state civil enforcement (i.e. Ofcom) under the Enterprise Act 2002.
  • One respondent suggested that the Copyright, Designs and Patents Act 1988 could have wider application than originally identified – for example, currently there is no specific obligation for service providers to inform rights holders of portability of content, which is something that could be addressed by copyright law.
  • The government has kept the review mechanism to five years, despite varying feedback, on the basis that the rules will need to be in place for a sufficient period of time to maximise data gathering opportunities.
  • In response to concerns regarding how content portability will work following Brexit, the government said that it “will ensure that UK law is amended as appropriate to reflect the UK’s future relationship with the EU“.

Reminder: what does the EU Regulation say?

The EU Regulation is designed to make it easier for consumers who live in the EU to access online content services they subscribe to when they are temporarily present in another Member State, e.g. on holiday or travelling for business. See our previous summary here.

  • Which services are relevant? The EU Regulation is compulsory for paid-for subscription services for online content, such as Netflix, but optional for free services, such as ITV Hub and BBC iPlayer (note that revenue generated from advertising or mandatory fees for public broadcasting does not count as “paid-for”).
  • Consumer’s access rights: The access must be at no additional cost to the consumer, and in the same manner (e.g. the same content on the same devices for the same number of users and with the same functionalities). If quality is expected to vary for reasons outside the service provider’s control, such as poor internet coverage, this should be brought to the consumer’s attention.
  • Service provider verification: By 21 May 2018, service providers must have verified the home country of their existing subscribers. Verification should be completed for each new contract, and upon renewal of an existing contract, with a subscriber. This verification can be done by using up to two methods from an agreed list of verification means set out in Article 5 and Annex A of the EU Regulation, including, for example, a utility bill or the location of an installed set-top box.
  • Agreements with rights holders: In an attempt to help avoid the need to renegotiate contracts between rights holders and service providers, the Regulations creates a “legal fiction” by which a service is deemed to have been accessed in the subscriber’s home country, rather than in their temporary location. Rights holders may authorise a service provider to provide portable services without verification of a subscriber’s residence – in which case, the contract between the service provider and subscriber is sufficient for verification purposes. Rights holders can withdraw this authorisation at any time by giving reasonable notice to the service provider.
  • Contract out? No, any contract provision which disapplies or contradicts the EU Regulation is unenforceable.

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