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Geo-blocking

FEP closely follows the discussions around geo-blocking, as it directly impacts the commercial sustainability of European publishers. Geo-blocking primarily designates the practice of limiting access to content or to a service on the basis of the geographical location of a user. It is a commercial practice that is justified by the need to respect both the territoriality of rights and the numerous different rules that the book sector must follow in the different Member States (VAT, consumer protection, fixed price, etc.). Despite this practice, consumers currently have little difficulty in finding the books they want in the digital single market.

Putting an end to unjustified geo-blocking has been identified over the past few years as a political priority to achieve the European Digital Single Market. FEP, along with the rest of the creative sector, has always advocated that geo blocking practices in the book sector are justified by objective legal and practical constraints that would make an imposition of unrestricted digital book sales across borders in the entire EU unsustainable for many publishers and booksellers. This would also be unnecessary for consumers, given the high level of accessibility of digital books.

The European Commission acknowledged this in its first short-term review of the Geo blocking Regulation, published in November 2020. The exercise was carried out to evaluate the implementation of the Regulation thus far and to assess the opportunity of extending its scope to digital copyrighted content. The report does not propose an extension of the scope of the Regulation, concluding that it would not necessarily bring substantial benefits to consumers and could be detrimental to some operators.

Moreover, it is considered premature to talk about a review in scope after two years form the entry into force of the Regulation. In May 2016, the European Commission proposed a Regulation on geo-blocking within the internal market in order to prevent discrimination based on the nationality, place of residence or place of establishment of customers.

After long and difficult negotiations, the Regulation finally entered into force in March 2018 and took effect on 3 December 2018. The text forbids traders from blocking or limiting customers’ access to their online service and from redirecting them to a version of their service that is different from the one the customer originally sought to access, unless explicit consent was given. Traders shall not apply different general conditions of access to their goods or services when the trader sells goods and those goods are not delivered cross border, and when the trader provides electronically supplied services, except those providing access to and use of copyright-protected works.

The prohibition regarding electronically supplied services shall not apply to traders exempted from VAT registration according to the threshold system. Prohibitions shall also not apply when other provisions in EU or Member State law prevent the trader from selling the goods, or providing the services, to certain customers or to customers in certain territories; and with respect to sales of 36 books, when traders are required to apply different prices to customers in certain territories under the laws of Member States in accordance with EU law.

After difficult negotiations with the European Parliament, copyrighted digital content services (including e-books) sold online were kept out of the scope of the Regulation, but this exclusion was subject to a two-year review clause accompanied by an assessment of whether to include them in the scope or not. The Commission tasked a consortium of consultants to carry out a study on the scope of the Regulation to be delivered around December 2019. The review clause was to be applied by 23rd March 2020, based on an Impact Assessment from the Commission, as well as the new study and a consultation open to all stakeholders. The study was meant to factually analyse the situation in terms of geo-blocking, including concerning the exclusion of copyright protected digital content from the scope of the Regulation, with a sector-by-sector approach.

The publication of the study was delayed due to the COVID-19 crisis, which mobilised all the Commission’s energy and focus; it finally took place on 30 November 2020. The report does not propose to extend the scope of the Regulation to copyright-protected content and plans for a new review in two more years, stating that further assessment and considerations are needed and there is insufficient evidence that copyright protected content would not suffer from inclusion. In the meantime, the Commission will look especially at the audiovisual sector, and launch an industry dialogue to explore the potential for improvement of the availability of content across borders.

With regard to the e-book sector, the report confirms several points made by FEP: it acknowledges that the demand is low and that imposing a ban of geo blocking would have a limited effect on consumers, and a detrimental impact on smaller booksellers. A group of MEPs in the Internal Market committee of the European Parliament remain convinced of the need to abolish geo-blocking in the content sector at all costs.

FEP will keep engaging with policymakers to explain the importance of addressing the issues that make it too complex or costly for publishers and booksellers to sell digital books across borders outside of homogeneous linguistic areas.