IMCO Committee Digital Single Market Working Group holds meeting on geo-blocking

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On 14 November 2016, the Internal Market and Consumer Protection (IMCO) Committee of the European Parliament held the 10th meeting of its Working Group on the Digital Single Market (DSM). The subject of focus for the meeting was the issue of geo-blocking, and in particular the current proposal for a regulation on geo-blocking, which is being considered by the IMCO Committee. The chair of the DSM Working Group, Roza Thun MEP (EPP, Poland), who is also the rapporteur for the file, opened the event by highlighting key issues associated with geo-blocking and introducing a number of speakers who then gave keynote addresses on a number of important questions related to geo-blocking. The meeting thus provided MEPs with an opportunity to reflect on the issues associated with geo-blocking, and the best means of addressing them.

Interaction between geo-blocking regulation and the Rome I Regulation

One such key issue, which has been a source of concern arising from the geo-blocking proposal, has been the manner in which the new regulation on geo-blocking will interact with the Rome I Regulation on applicable consumer law. Jules Stuyck, Emeritus Professor in Consumer Law at KU Leuven, addressed the meeting on the subject of the interplay of the proposal with the Rome I Regulation. He identified the key cases that should be focused on in this context are those in which there is a cross-border sale, but no cross-border delivery.

The proposal seeks to clarify that, in such cases, the trader will not be seen as ‘targeting’ their activities to the consumer’s country of residence, and that therefore, under Rome I, the consumer law of that country will not be applicable. However, Professor Stuyck expressed concerns that the provisions in the proposal may be insufficient to secure this, highlighting in particular the fact that the Rome I Regulation only applicable in B2C cases, whereas the proposal will cover both B2C and B2B cases, as well as the issue of margin of interpretation in terms of the definition of ‘targeting.’

Ecommerce Europe views it as a priority that the regulation provide legal certainty in terms of the applicable consumer law in cases of cross-border transactions under the scope of the geo-blocking regulation. Online merchants need legal certainty about the applicable law in such transactions and in any case, their fundamental freedom to contract should not be breached by this law. In other words, online merchants. Traders should always be allowed to select the area(s) to which they want or do not want to direct their activities. Moreover, this Regulation should not be understood as providing for an obligation to deliver goods cross-border to another Member State where the trader would not otherwise offer the possibility of such delivery to its customers or is not willing to offer it.

Questions of Scope

A further issue that was a subject of focus during the meeting was that of the scope of the proposed regulation, and especially the question of whether copyrighted non-audiovisual material should be included. Professor Dr. Georgios Petropoulos, a Research Fellow at Bruegel, highlighted the significance of their exclusion. Citing two specific sectors, the e-book market and the video games market, Professor Petropoulos argued that both were cases of sectors that are relatively high growth, and in which portability is a priority. Given this, Professor Petropoulos stated that ‘we need solutions for copyrighted material now, not in two years.’ Julia Reda MEP (Greens, Germany), the shadow rapporteur for the file for the Greens, questioned whether a solution to this question might be to include copyrighted material in the scope of the proposal, and to differentiate on the basis of whether a copyright holder has a license to sell to a particular territory.

Next steps

Moving forward, the draft report for the file on geo-blocking will be considered in January 2017 by the IMCO Committee of the Parliament. Amendments to the draft report will be considered in March 2017, and it is expected that IMCO will vote on the file in April 2017. Throughout the process, Ecommerce Europe will work to advocate for legislation that addresses the issue of geo-blocking while also taking into account the interests of the e-commerce sector.

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