Geoblocking and Platforms in the Digital Single Market: A Tale of Two Consultations

Europe is striving to remove national silos and modernize regulatory structures to create a digital single market (DSM). This is the goal set out in the Commission’s May 2015 DSM Strategy Communication. In September, the Commission opened consultations to gather public input regarding two aspects of the future implementation of this goal. One asks about the difficulties of providing and accessing information and goods across national borders in the EU, presumably with the intent of reducing cross-border trade issues, online and offline. The other questions the use, value, and potential for increased regulation of certain online entities participating in two-sided markets, which the consultation dubs “platforms.”

In the geoblocking consultation, the Commission professes its desire to undo the fragmentation created by geoblocking and other cross-border trade restrictions. From the perspective of users of copyrighted material, efficient licensing makes more content available and reduces the transaction costs that are part of the price of copyrighted digital goods. Likewise, the Commission’s recently leaked draft communication on copyright recognizes the need for greater uniformity among the 28 member states’ exceptions and limitations to copyright, indicating positive developments for access to works generally, and specifically for access for those with print disabilities, for educational purposes, or in the form of text and data mining. 

Platforms: a one size fits all approach and a broad definition

The Commission’s outlook on the entities it calls “platforms” is less sanguine. In the consultation regarding the “regulatory environment for platforms, online intermediaries, data and cloud computing, and the collaborative economy” (whew!), the Commission defines “platforms” as basically anything that uses the Internet as part of a two- or multi-sided market, from which at least one party derives value. This definition could include virtually the entire Internet, from the largest search engine to the smallest personal website, but the consultation helpfully lists examples of “typical” platforms, mentioning Google no fewer than six times. The consultation hints at a perspective that certain online applications and services should be subject to special Internet regulatory regimes based on either the particular combination of services or the size of the provider.  While competition law and policy are certainly relevant to both the online and offline environments, creating a new regulatory regime that applies to only certain types or certain providers or web services is a significant and troubling departure from the Internet’s core principle of application agnosticism.

Undermining the foundation

Beyond the breadth of the defined class, the consultation on online platforms raises other concerns, both in the issues presented and the posture of the consultation itself. Forty-six pages of multiple-choice and character-limited prompts leave little doubt as to the Commission’s perspective on platforms. Compare the multiple choice answer (plus a bonus 100 characters) given to describe the advantages offered by platforms with the 3000-character opportunity to describe their problems. This near-comic unbalanced framing of the issues creates a structural bias against the online entities at which it is aimed, and which respondents may find difficult to overcome.

Without the certainty of the “no duty to monitor” provision, innovation and free expression in the EU will be chilled…

In the leaked draft communication from the Commission to Parliament, the Council, and other bodies, the Commission expounded on its thoughts regarding the role of intermediaries in intellectual property enforcement. To wit, the Commission specifically reminds its audience that the consultation considers the “take down and stay down” approach as a means of ensuring lasting action against alleged infringers.  This approach, however, undermines a foundational principle of the E-Commerce Directive: Intermediary Service Providers (ISPs) have no duty to monitor for unlawful uses of their services. The take down and stay down approach requires ISPs to monitor continuously for repeat or similar infringements. Without the certainty of the “no duty to monitor” provision, innovation and free expression in the EU will be chilled as intermediaries are forced to monitor and possibly silence their users.  This is not a viable path forward for a digital Europe.

The consultation on online platforms is open for public responses until December 30. Whether or not the Commission gets the kinds of responses it was expecting, it is important that voices from all sides of the digital market be heard, as there is the potential for substantial change to copyright and the online environment. Please consider adding your input to the Commission’s deliberations regarding copyright, platforms, and the EU’s digital economy.