Comment: Content portability gets European thumbs up

Just a few weeks before the UK’s historic ‘Brexit’ referendum, the Council of the European Union revealed that it had agreed the approach on a draft regulation to enable portable digital content to be accessed across the single market.  As an important pillar of Europe’s commitment to the Digital Single Market, the regulation will have far-reaching implications for content creators, platforms, marketers and eCommerce operators.

In May 2015, the Commission set out its strategy to facilitate the opening of a Digital Single Market across Europe. The disruption of technology and the Internet of Things (IoT) to various sectors has required a rapid response and reform from lawmakers to ensure that businesses and consumers are not only able to benefit from the resulting opportunities but are protected from the risks. According to the Commission’s communication in May 2015, barriers online – caused by out-of-date legislation and a fragmented approach across jurisdictions – mean people are missing out, entrepreneurs cannot grasp emerging opportunities, and businesses and governments aren’t benefiting from available digital tools.

For many consumers at the sharp end of increased connectivity, mobility and the creaking legislative framework, one of the key issues has been access to content when travelling abroad. The growth of online content providers, ranging from Netflix, to BBC iPlayer and Sky Go, and the rapid expansion of the use of tablets and smartphones to access content has exacerbated this.

Importantly, such content reaches beyond ‘traditional’ broadcast materials and into e-books, music, games and other audio-visual works which are evolving to further incorporate eCommerce elements in the customer engagement and relationship process. For example, the recent collaboration between Spotify and Merchbar.

It was not surprising, therefore, that the first proposals to follow the Commission’s May 2015 communication, intended to harmonise how rights and services operate and break down the digital barriers included, centrally, the portability of digital content.

Critically, this move was taken via regulation rather than directive, meaning that the rules – in their final approved form – will be applied identically on a pan-European basis, rather than left to national governments to implement via their own legislation.

The draft regulation, first published in December 2015, rests on four key premises:

Following a period of intensive work on these elements, the Council reached agreement on the general approach of the draft regulation in May 2016 – leaving two outstanding issues which will need to be ironed out before any final version is formally approved and implemented.

It is now up to the EU Parliament to agree an approach on the proposed regulation.  Once, such an approach is agreed, the Parliament and Council will enter into negotiations to agree a final text.  It is hoped that the regulation will finalised and implemented in 2017.

There is some slack granted to content providers who may be concerned at the cost and resource required to keep up with the new regulation in that there will be no formal requirement on them to provide the same quality of service to consumers on the move. Provided no explicit guarantees are given, there won’t be the need to provide content that matches the quality of that available locally. 

The elephant in this room for UK businesses and consumers is, of course, Brexit.   

It looks unlikely that an exit strategy will be agreed and begun before the regulation takes effect next year, meaning that the new rules will need to be followed by UK content providers in any case.

However, once the UK exits the EU bloc, it will be up to the UK government to decide if UK providers should continue to be legally bound to supply content to subscribers who are temporarily in Europe, and vice versa. Given the potential costs involved in sustaining trans-continental content provision, it is easy to envisage that some UK providers will put pressure on the UK government to scrap such legal obligation.

That said, even if UK providers are no longer required by law to offer such a pan European service, given the power of the consumer, UK providers will have to think carefully as to whether the potential savings will outweigh consumer disgruntlement at not having those services available when travelling in Europe.  In our view, once consumers have had a taste of this type of service, it is unlikely they will be willing to give it up.

 Bryony Long is a senior associate at law firm, Lewis Silkin.