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Global Media and Communications Watch The International Legal Blog for the Tech, Media and Telecoms Industry
Posted in Copyright, Digital Single Market (EU) Nils Rauer

Geoblocking – EU Parliament approves new regulation

The regulation on measures against unjustified geo-blocking is close to become binding law. After the European institutions had reached a compromise on some last open issues in last November, the European Parliament approved the revised draft regulation in its plenary session on Tuesday. The billed sailed through with 557 to 89 votes and 33 abstentions (press release). This marks a milestone in the endeavour to bring to an end willful obstacles within the Digital Single Market.

The legislative initiative goes back to a draft the European Commission, officially presented on 25 May 2016 (COM (2016) 289). It centres on the reasoned perception that the Single Market aimed at by the European Union for so long, and which is set out as one of the Union’s core goals in Article 26 TFEU, actually does not exist on the Internet (which as such stands for a borderless and global concept). This enables “geoblocking“, i.e. the differentiation by way of origin of the Internet user, to be commonplace. As a result, users are arbitrarily denied access to certain websites because of their IP address, or simply confronted with different terms and conditions than EU citizens from other Member States. For example, a car hire in Heathrow can be more expensive when booking the vehicle out of France or Germany than when accessing the site with an Italian, Spanish or English IP address. We will put this type of scenario behind us soon when the new regulation is enacted.

Banning “unjustified” geo-blocking

Specifically, the new law is intended to counteract online discrimination based on nationality, place of residence or temporary residence. In future, customers from all parts of the EU must be given equal access to digital services and marketplaces. Ordering a product or booking a service shall be possible on the same terms throughout the entire Digital Single Market. Restricting or blocking access to websites based on the criteria mentioned above will be prohibited. The same will be true for arbitrary offering of payment methods. Any type of customer redirection to a domestic website will only be permissible with the customer’s explicit consent.

The new regulation will cover, for instance, all types of cloud services or data warehousing. But also services provided in the “real” world such as catering, restaurants, hotels and transport, which are increasingly booked on the net, fall within the scope of the new law. Geoblocking is thus banned also in its factual consequences outside the Internet. In other words, the Digital Single Market reaches beyond the means of electronic communication.

Justified geoblocking remains legal

A noteworthy point is that the pure technical phenomenon of geo-blocking has not come to an end. This would take things too far. One has to differentiate here. In particular, when copyright or other intellectual property rights come into play, the blocking of sites and the restriction of access can very well be feasible. This is why e-books, music works and online computer games are, for the time being, exempted from the regulation. The extent to which these exceptions will remain on perpetual basis is yet to be decided. The regulation will be reviewed within two years from entering into force. So, territorial licenses may still be secured by technical measures of geo-blocking. In other words, anyone who licenses a work e.g. for Spain and places it on a Spanish website may use technical means to prevent the site from being accessed via, for example,  a German IP address.

Next Steps

The regulation still requires the formal approval of the Council. However, considering the compromise already reached in November 2017, we may take for granted that the Council will approve the agreed text. The regulation will then be officially published in the Official Gazette of the European Union. Nine months later, it will enter into force.