The challenge of unblocking the Internet

European consumers expect the Internet to be borderless, a consumer organisation claims. But to build up a single European digital market, the EU Commission still has a long way to go. Vice-president Andrus Ansip wants to remove obstacles by abolishing geoblocking, whereas Commissioner Oettinger seems to be less decided. But anyhow, the EU member states and industry are divided on the matter.

Many Internet users are familiar with this message: “This content is not available in your country.” According to Andrus Ansip, the vice president of the European Commission in charge of the digital single market, users should no longer be confronted with it while watching a movie or listening to music online. Ansip wants to lift transnational borders in the Internet.

Using audiovisual services would then be possible from everywhere in the EU, no matter where they were purchased.

The Estonian commissioner condemned so-called “geoblocking” practiced by many online services.

“Fences and walls that block us online” should be torn down, Ansip said when he presented his guidelines for the digital single market on March 25. “Deep in my heart, I hate geoblocking. It is old-fashioned and it is not fair,” he said.

The EU Competition Commissioner Margrethe Vestager also complained recently about the fact that it is possible to buy a film or a DVD back home and watch it abroad, while it is still impossible “to do the same online.”

European consumers are frustrated

According to the Commission, a third of European Internet users are interested in watching or listening to content from their home country when they travel abroad. One in five is interested in watching or listening to content from other EU countries.

European consumers want the Internet to be borderless, but are still facing a lot of obstacles, said Ursula Pachl, deputy director general at the European Consumer Organisation (BEUC).

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“Increasingly, I think consumers realise that this doesn’t fit with the idea of the single market. And we know from surveys of our own member organisations that consumers would wish to have access and have more choice and better prices and benefit from that, and they increasingly are aware that they cannot. So they are frustrated,” she said.

Fifteen percent of EU consumers bought products online from another EU member state in 2014. The European Commission predicts “double digit growth rates” for this market, if obstacles are removed.

BEUC insists on the fact that some companies take advantage of the fragmented market by applying different prices.

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“We can say there are still unfair commercial practices which are used to fragment the markets. That is very clear, and obviously this is a situation that should not last,” said Pachl. “We need much more focus on competition and enforcement of competition law, also in these areas in particular in the digital single market, and we very much welcome that recently the European Commission has announced that they will do an investigation into e-commerce transactions from the competition policy point of view.”

National copyright laws hinder borderless internet

But lifting national limits for online customers would also mean unlocking territorial copyright protections for audiovisual products. Copyright licenses often are limited to national territories and thereby not valid for the whole European Union.

Günther Oettinger, the EU commissioner in charge of the digital economy and society, announced his intention to revise existing rules and present a plan for copyright reform by autumn.

However, authors have expressed a fear that their work will not be appropriately remunerated if geographic copyright protections are lifted.

Territoriality is not an “impediment of the circulation” of audiovisual products, but to the contrary, “it ensures their active circulation and the sustainable financing of diverse European production,” the Society of Audiovisual Authors wrote in a statement.

Industry, EU member states divided on geoblocking

Some EU member states are also opposed to pulling down national boundaries in the Internet.

A reform on the copyright laws should focus on portability of rights, French authorities stated in February, and not maintaining the principle of territoriality would lead to an “impoverishment of European culture.”

France and Germany recently agreed on a common position on copyright. Both countries are in favour of European rules that “guarantee authors an appropriate share of the revenues on their works,” it said in a joint declaration signed March 30.

At the same time, the best possible access to these works should be granted.

Whereas a political agreement on banning geoblocking does not seem to be on the cards in the near future, big players like Apple, Google or Netflix could take advantage of their dominant market position.

So far, geoblocking has not prevented them from making individual deals with national authorities.

“Geoblocking is one of the main obstacles for start-ups to stay in Europe,” Ansip said when presenting his ideas on the digital single market. In fact, small companies often do not have the resources to look into different national laws when facing European market realities.

Associations representing big digital companies like DigitalEurope have so far not issued a common position on geoblocking.

In parallel to consumer-focused efforts, “Europe’s infrastructure must be reshaped so that it can carry an explosion in the quantity of digital content that will soon be pumping through its networks,” John Higgins, director general of DigitalEurope, wrote in a statement.

Consumers know how to bypass blockades

Meanwhile, at least some European consumers have been able to find their way past these geographic blockades. The real world shows that geoblocking is no longer up-to-date, said Norbert Pohlmann of the Institute of Internet Safety in Gelsenkirchen, Germany. (audio in German)

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“Because you are able to bypass it anyway,” Pohlmann told German Euranet Plus member AMS-NET. “There are enough proxies where I can change my location. For example, if I use a proxy in France, it could look like I had my computer in France, thereby I am able to avoid geoblocking if I understand the technical idea. Therefore it does not make any sense to me.”

Nowadays, many companies are offering so called VPN connections, which offer consumers who pay a subscription the opportunity to use IP addresses from all over the world.

However, further discussion on the topic seems necessary within the European Commission itself.

Oettinger more reluctant than Ansip

“I hate my alarm clock at five in the morning,” Oettinger said recently, reacting to Ansip’s clear opposition to geoblocking in an interview with the German daily Frankfurter Allgemeine Zeitung on March 30. “We should not throw the baby out with the bathwater.”

At the same time, he announced that he wants to examine the consequences of an opening for the film industry.

Ansip will reveal more of his plans for Europe’s digital single market on May 6.