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European Commission proposes rules for digital content and online sales

The EC has published proposals aimed at promoting access to digital content and online sales across the European Union and include an overhaul of copyright laws

Online services such as Netflix and Sky Go will be portable across the European Union (EU) under proposals announced by the European Commission (EC) to simplify digital contract rules.

The proposals are aimed at promoting access to digital content and online sales across the EU and include an overhaul of copyright laws to make it easier to buy and use content legally.

As part of the EU’s digital single market strategy, the proposals are also aimed at providing better protection for EU citizens who shop online and to help businesses expand their online sales.

Announcing the proposals, which will need to be approved by the European Parliament before they can be implemented, the EC said that while e-commerce is growing, its full potential remains untapped for businesses and consumers in Europe.

According to the EC, only 12% of EU retailers sell online to consumers in other EU countries, while three times as many (37%) do so in their own country. Similarly, only 15% of consumers purchase online from another EU country, while roughly three times as many (44%) do so from their own country.

Cross-border e-commerce

The proposals on the supply of digital content and the online sale of goods will tackle the main obstacles to cross-border e-commerce in the EU. The obstacles are legal fragmentationa in the area of consumer contract law and result in high costs for businesses and low consumer trust when buying online from another country. 

“Today’s proposals will give more rights to consumers online and will allow them to enjoy products and services from other EU countries in full confidence,” said Andrus Ansip, vice-president for the digital single market.

“Businesses, especially the smallest ones, can grow across borders at less cost, with a common set of EU rules instead of a patchwork of national laws. Now the digital single market is under way, improving the daily lives of people, where digital is everywhere,” he said.

Portable online subscriptions

Under the proposed rules, online subscriptions to services would become portable inside the EU.

“People who legally buy content – films, books, football matches and TV series – must be able to carry it with them anywhere they go in Europe,” said Ansip.

The EC said that allowing cross-border portability would mean “enabling consumers to use their home online subscription while they stay temporarily abroad”.

BBC’s iPlayer, however, would be exempt from the rules because it does not verify a user’s country of residence, according to the BBC.

“This said, the BBC has announced that it is willing to allow its users to access the iPlayer when they are outside the UK for a limited period,” said Nathalie Vandystadt, the EC’s spokeswoman for the digital single market.

She added that the rules were not aimed at covering all online content services “as it might be too burdensome and expensive for some services to adopt the necessary verification system. For free-of-charge services, the choice remains open – if they decide to start using verification methods, they can benefit from the rules”.

A BBC representative said: “We are interested in being able to allow UK licence-fee payers to access BBC iPlayer while they are on holiday in the EU, and welcome the EC proposing regulation to help make this possible.”

Although Netflix members can already use their membership in any country the service operates, the proposed rules could force Netflix to allow users to access the content of the country they subscribed in, no matter where they travel, even in EU countries that do not currently support the service, according to PocketLint.

New markets for EU businesses

More than 122,000 EU businesses are expected to start selling to consumers in other member states, and the total number of consumers buying online from other EU countries could reach up to 70 million.

The EC believes the proposals will open up new markets, especially for small and medium-sized enterprises (SMEs), increase competition and contribute to economic growth.

Lower consumer prices are expected to boost consumption in the EU by €18bn and EU GDP is expected to increase by €4b.

Consumers will benefit from a higher level of consumer protection and a wider choice of products at more competitive prices, the EC said.

Under the proposed rules, throughout the two-year guarantee period, the consumer will be able to ask for a remedy for defective goods without having to prove that the defect existed at the time of delivery. 

Consumers who download games that are not working properly will be able to request such problems to be fixed and, if this is not feasible or not done properly, to obtain a price reduction or terminate the contract and be fully reimbursed. 

Businesses will not have to spend the time and money adapting to the contract law rules in the member states they sell to and will also be able to supply digital content and sell goods online to consumers throughout the EU, based on the same set of contract rules.

According to the EC, businesses currently face an additional one-off cost of €9,000 to adapt to the national contract law of each member state they wish to sell to, but under the proposed EU-wide rules, a business could save up to €243,000 if it were to sell to the 27 other EU countries. 

Supporters said the proposals are an opportunity for creative industries, while critics said the proposal lacks detail and could cause harm.

The proposals are expected to be turned into more concrete legislative proposals in the next six months. The EC expects the proposed regulations content to be approved in 2016 and implemented in 2017.

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