Fieldfisher submission to the UK Government on the EU's proposed Regulation on cross-border portability
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The Fieldfisher Media and Intellectual Property teams have recently filed the following submission to the UK government on the EU's proposed Regulation on cross-border portability. This is the first legislation to be released as part of a wider European objective for a Digital Single Market and the UK government is seeking views on whether the legislation delivers the best outcome for businesses and consumers.
1. Background
Currently EU consumers are cut off from online audio-visual services and premium sports offers as soon as they leave their home country. The proposed Regulation on cross-border portability of online content (the "Regulation") therefore aims at enabling consumers to use their home online subscription while they stay temporarily in another Member State. It does this by effectively removing the right for copyright owners to bring infringement action in the temporary state of residence.
We understand that the Commission wants online content to be portable because of the projected growth of online content services, the increasing mobile use of content and the high interest in cross-border portability expressed by young Europeans. The Commission is concerned that many Europeans are tempted to resort to technological workarounds like VPNs to access content across borders.
2. Our concerns with the Definitions set out in Article 2 of the Regulation
Whilst Fieldfisher supports the general aim of the Regulation, we have identified concerns with the definitions contained in Article 2 of the Regulation.
The general obligation to enable cross-border portability of online content is set out in Article 3 of the Regulation: "The provider of an Online Content Service shall enable a Subscriber who is temporarily present in a Member State to access and use the Online Content Service" (our emphasis added). Accordingly, for the portability obligation and the associated protection from copyright infringement to arise, each of the following elements needs to be present. These terms are defined in Article 2 of the Regulation:
(a) Article 2(a): "Subscriber" means "any consumer who, on the basis of a contract for the provision of an online content service with a provider, may access and use such service in the Member State of residence" (our emphasis added).
(b) Article 2(e): "Online Content Service" means "a service …that a service provider is lawfully providing online in the Member State of residence on a portable basis and which is an audiovisual media service…, which is provided to a Subscriber on agreed terms either:
(i) against payment of money; or
(ii) without payment of money provided that the Subscriber's Member State of residence is verified by the provider" (our emphasis added).
(c) Article 2(d): "Temporarily present" means "a presence of a Subscriber in a Member State other than the Member State of residence".
3. Problems caused by the definition of Subscriber
Under the definition of "Subscriber" in Article 2(a) of the Regulation, any consumer will need a contract between them and the Online Content Service provider to benefit from the Regulation.
Many Online Content Service providers require Subscribers to agree to their terms of use before using their service. In many circumstances, website users are required to view a copy of the site’s terms and conditions and to click an ‘accept’ button to indicate that they have read and accepted the terms before being allowed to move through to the site. The act of "clicking to accept" the T&Cs is arguably the same as signing a paper document, which creates a contract between the user and the service provider.
Some UK Online Content Service providers require users to "click to accept" their T&Cs in this way:
3.1 ITV Hub
In order to use the ITV Hub, the user is required to register for an account with ITV. Upon registration, the user is required to agree to terms and conditions including the ITV Terms of Use, the Privacy Policy and the Cookie Policy.
In the Terms and Conditions, it expressly states that "if the user does not agree to the terms contained in these documents, they should not register to use the hub". Because of the express requirement to tick a box to agree to the terms and conditions in order to use the app, there is likely to be a contract between the consumer and provider to satisfy the definition in Article 2(a).
3.2 4oD
In order to use 4oD, the user is also required to register for an account. When signing up it expressly states that by "clicking register…you accept the Terms and Conditions":
Again, this suggests that a contract is likely to be formed between the Subscriber and provider to satisfy the definition in Article 2(a).
3.3 BBC iPlayer
However, when users currently download the BBC iPlayer app from the app store, there is no registration process and users do not have to accept any terms or conditions. When playing content on the BBC iPlayer, users are asked to tick to confirm that they are over the age of 16 but there is no registration process and no tick box to accept the terms and conditions. Many website owners consider that "click to accept" mechanisms impair the user-friendliness of websites and therefore avoid using them. Although there is a 'BBC ID section on the BBC iPlayer website this is not mandatory. Instead, the website states 'You don't need to have a BBC ID to use BBC online, but things get better if you do'. This feature merely lets you add favourites, write reviews and comments.
Instead of a formal registration process on the BBC iPlayer website, there is a terms of use section, which sets out obligations on the Subscriber, including that users "can use BBC iPlayer and the BBC iPlayer Download Application for personal use provided you comply with the Terms of Use for personal use and these Additional Terms".
The lack of a 'tick box' to agree to the terms of use makes it more questionable whether a contract has been created. The Consumer Contracts Regulations 2013(*1) suggest that merely placing terms and conditions on a website does not create a contract between the user and provider.
The European Commission guidance on the Consumer Rights Directive states that "In itself, access to a website or a download from a website should not be considered a "contract" for the purposes of the Directive."
Accordingly, it is not clear whether a user of the BBC iPlayer will be covered by the definition of Subscriber and be able to benefit from the terms of the Regulation.
3.4 Conclusion on definition of Subscriber
We assume that the Commission intended for the Regulation to apply to all online service providers, including the BBC iPlayer and other services that do not include "click to accept" terms and conditions. It should be clear when the obligations on service providers and protections provided to users contained within the Regulation apply. The definition of "Subscriber" should therefore be amended to avoid incorporating uncertain areas of law and to avoid being dependent on the set up of individual services.
4. Problems caused by the definition of Online Content Service
The definition of "Online Content Service" in Article 2(e) requires content to be supplied to the Subscriber on agreed terms either: (i) against payment of money; or (ii) without payment of money provided that the Subscriber's Member State of residence is verified by the provider.
Currently, users of the BBC iPlayer, 4oD or ITV Hub do not pay to use the services. Accordingly, these providers will only be considered "Online Content Services" under the Regulation if the provider verifies the Subscriber's member state of residence (UK). Currently this is not done and users do not need a TV license to view the online content.
The Regulation does not define how the Subscriber's member state of residence can be verified by the provider, and in this respect, the definition of "Online Content Service" could be seen as inadequate. We understand that the BBC has stated that it could undergo a technical overhaul of the iPlayer to ensure licence fee payers can log in to watch programmes whilst temporarily abroad while non-licence fee payers remain excluded. This, however, depends on the UK government implementing legislation to modernise the licence fee to include video on demand as well as linear viewing, something the government has committed to do next year.
In any event, it is not correct that the BBC is having to take voluntary steps to bring the iPlayer within the scope of the Regulation and we do not know if other providers will follow suit.
5. Problems caused by the definition of "temporarily present"
The definition in Article 2(d) seems to mean anything short of permanent residence. There are no set time limits on the use of the portability feature and the Commission has stated that it wants flexibility in the market. Whilst some flexibility is welcomed and we understand that the Commission wishes to avoid examining the meaning of "residence", it does leave the Regulation open to abuse. Someone who remains long-term in another country will continue to be able to access material provided that they are not in the Member State of their residence, even though the same content might be unavailable to permanent residents of that same State. A cap on the duration of what is considered to be "temporarily present" would avoid this.
It is also not correct that an additional obligation is imposed on rights holders to avoid abuses of the portability principle by requiring service providers to implement effective means to authenticate the Member State of residence of Subscribers e.g. by re-verifying the Member State of residence when portability is used beyond a certain duration of time.
*1 Although the Consumer Contracts Regulations 2013 do apply for digital content not on a tangible medium, even where no payment is made, the regulations are unclear on whether a user browsing a website and merely placing terms and conditions on a website creates a contract between the user and the provider (Recital 19).
Many thanks to Alice Edwards for her help in preparing this submission.