The period before Christmas gave rise to several important decisions relating to the application of EU law to the sports industry. One key development was the long-awaited ruling by the Court of Justice of the European Union (CJEU) on the European Superleague and other cases relating to the exercise of discretion by sports bodies (see our update here).
However, also notable was the vote by Members of the European Parliament on 13 December 2023 on whether to call for the extension of the scope of the Geo-blocking Regulation to include audio-visual services.
Geo-blocking is the practice of ring-fencing digital content and services to specific jurisdictions using information such as IP addresses. Since 2018, the European Commission has banned “unjustified” geo-blocking in an attempt to create a more integrated internal market and increase consumer trade between Member States. The intention of the Geo-Blocking Regulation was to create better deals for consumers, who would be free to shop around providers from all the EU Member States to find the best deal, whilst increasing access to the European market for service providers (see our summary here).
Notably, the Regulation did not extend to audio-visual content. The sports and media industries have traditionally relied on a system of granting territorial exclusivity of distribution rights within individual EU Member States – i.e. so each of their licensees is only allowed to transmit content to consumers in their designated territory. Geo-blocking technology allows broadcasters delivering content via the Internet – including both traditional broadcasters and on-demand streaming-platforms – to restrict access to their content to customers living in specific territories, which is necessary to maintain the territorial licensing regime on which the industry has long relied.
Since the Geo-Blocking Regulation came into force, there have been a number of EU publications considering the implementation of the Regulation. In particular:
- In November 2020, the EU Commission published its first short-term review of the Regulation (link here) (the “Review”) which looked at the impact of geo-blocking on the EU’s digital single market. The Review explored the potential extension of the Regulation to include certain copyright works. In particular, the Review identified a number of benefits in extending the scope of the Regulation to audio-visual but warned that these could potentially be nullified by the negative effects on the creation, financing, production and distribution of content and on cultural diversity; and
- More recently, in June 2023, the Committee on the Internal Market and Consumer Protection (IMCO) published its report on the implementation of the Regulation (link here) (the “Report”). This own-initiative report called on the EU Commission to re-assess the rules on geo-blocking, especially in the context of accelerated digital transformation. In relation to audio-visual content and live sports events, the Report stressed the importance of modernising to meet consumer’s expectations in terms of availability, affordability, flexibility and quality of content.
There was widespread opposition in the sports and media industries to the proposal that the EU Parliament’s should vote to call for the extension of scope for the Geo-Blocking Regulation. In particular, the Association of Commercial Television and Video on Demand Services in Europe published a strongly worded joint letter (available here) warning of the negative impact of extending the Regulation to audio-visual content and services. The letter had over 700 signatories including a large number of the best-known sporting and media organisations.
The letter described how “a ban on geo-blocking technology to support territorial exclusivity for film and audio-visual content and services would severely jeopardise the creative and economic sustainability of the film and audio-visual sector in Europe”. In addition, the letter set out a range of negative impacts of extending the scope of the Geo-Blocking Regulation and pointed in particular to how a ban on geo-blocking would result in a significant reduction of choice in content, distribution and access options as well as a surge in prices. It also drew attention to a 2020 study which found that a ban on geo-blocking would lead to 103 million consumers facing higher costs for accessing top tier sporting events as broadcasters would be forced to raise their prices in smaller markets to avoid undercutting their prices in larger markets.
The co-ordinated response from the industry helped to influence the views of the MEPs, who voted strongly against the expansion of the Geo-Blocking Regulation to audio-visual content. Instead, MEPs voted in favour of an amendment which stated that the inclusion of audio-visual content within the scope of the Geo-Blocking 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; [and emphasised] … that such an inclusion would result in fewer distribution channels, ultimately driving up prices for consumers.”
Whilst this is an EU Parliament vote and is therefore non-binding and does not have any legislative force, members of the audio-visual sector may take some reassurance that MEPs appear to have paid heed to their warnings against extending the scope of the Geo-Blocking Regulation.
The next review into the implementation of the Geo-Blocking Regulation is due to take place by 2025.
