The law applicable to the sale and exclusion of protected non-audiovisual services could prove to be the two most difficult questions for the European Parliament to resolve in the context of the regulation on geo-blocking. The subject was the focus of a “single digital market” workgroup at the European Parliament on 14 November.
It should be pointed out that the draft regulation presented on 25 May (see EUROPE 11558), compels traders to ensure that their goods and services are accessible to consumers in all EU member states, without discrimination in terms of access to prices, sales or payment conditions. The text does not oblige traders, however, to deliver their products in other countries, except for the one in which they are established.
Although the Slovak Presidency is playing for time, in an effort to obtain political agreement at the Competitiveness Council on 28 November, discussions are getting off to a slow start in the European Parliament. The rapporteur, Roza Thun (EPP, Poland) kicked off the first discussion last September and intends to submit her report for translation during the middle of December.
Vision of the experts. The “internal and digital market” workgroup at the Internal Market and Consumer Protection Committee (IMCO) played host to a number of experts on 14 November. All of the latter highlighted the fact that the text would only have limited scope due to the exclusion until the new order, of works protected by copyright. According to Georgios Petropoulos, a researcher at the Bruegel think tank, these products account for a third of online sales. He explained that, “the lifting of geo-blocking for music would create benefits worth €19 million for consumers and €10 million for producers”. Nonetheless, he did acknowledge that some producers would suffer losses due to increased competition and price reductions. More broadly, the experts regretted that the Commission text did not clearly distinguish between a sectoral and horizontal approach. It should be recalled that the draft regulation does not cover certain sectors such as transport, social or audiovisual services. Giorgio Monti, Professor at the University Institute of Florence, stated, “A horizontal approach would help make savings and create more legal certainty, whilst encouraging cross-border trade. Conversely, a sectoral approach would tackle risks more accurately”. He subsequently expressed a preference for a horizontal approach.
MEPs’ position. Several MEPs also took advantage of this meeting to tackle the question of what law should apply to sales contracts. Although the Council would like the law of the country of the trader to apply to passive border sales, Parliament could possibly opt for the opposite. During the exchange of views, representatives from the S&D and Greens/EFA groups, Evelyne Gebhardt and Julia Reda respectively (both from Germany), indicated that they wanted the law and the jurisdiction of the consumer to apply to cross-border sales in compliance with Rome I. Julia Reda asked,”If it is not currently a problem for direct sales, why should it be for online sales?”
Decisive Coreper meeting on 18 November. The Slovak Presidency is continuing to work for a political agreement at the Competitiveness Council on 28 November. In a new draft compromise dated 14 November it proposed to provide greater clarification of the concept of “directed activity” (see EUROPE 11665). This will help traders entering a transaction with consumers from another member state under the terms of the new regulation whereby they are not obliged to apply the law of the country of the consumer. The document seen by EUROPE stipulates that, ”When a trader is not blocking or limiting the access of consumers to their online interface, irrespective of their nationality or place of residency/establishment, not applying different general conditions of access when they sell goods or provide services in situations defined in this regulation or when the trader agrees to payment instruments of another member state on a non-discriminatory basis, this trader should not be considered as directing their activities in the member state where the consumer has their habitual residency”. It also explains that traders obliged by their suppliers to limit their passive sales could benefit from exemptions and that their package offers, such as those offered on package holidays, including goods and services excluded from the scope of application, should be assessed on the basis of their general objective. It also amends the revision clause for non-audiovisual services protected by copyright: instead of a two year clause, the Slovak Presidency is proposing to extend the period to four years. Similarly, it is proposing to extend the regulation application deadline to eighteen months instead of six months. The document is expected to be discussed by the "competitiveness and growth” workgroup on 16 November and endorsed by the Committee of Permanent Representatives on 18 November. (Original version in French by Sophie Petitjean)