Crossing Borders in the Digital Market: a Proposal to End Copyright Territoriality and Geo-Blocking in the European Union

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NOTE

CROSSING BORDERS IN THE DIGITAL MARKET: A PROPOSAL TO END COPYRIGHT TERRITORIALITY AND GEO-BLOCKING IN THE EUROPEAN UNION

Jacklyn Hoffman* INTRODUCTION On September 27, 2011, more than seven years after the iTunes Music Store (iTunes) was first made available to select European consumers,1 Apple launched iTunes in all remaining countries within the European Union.2 Expecting that they would have full access to the world’s most popular online music store, consumers and artists initially rejoiced.3 They soon learned, however, that this European expansion came with certain caveats and, indeed, was not truly “European” at all.4 Each country had its own version of iTunes, accessible only within that country’s borders and with content localized to that country.5 For example, an album available in Spain might not be available for purchase in Germany.6 Addition- ally, an iTunes account created on one country’s version of iTunes was not accessible or transferable to another E.U. country.7 As a further example, a French consumer moving to Italy would sud-

* J.D. expected 2017, The George Washington University Law School; B.A. 2014, Columbia University.

1. Apple initially launched the iTunes Music Store (iTunes) in the United Kingdom, 38291-jle_49-1 Sheet No. 79 Side A 11/02/2016 10:58:58 France, and Germany on June 15, 2004. Apple Launches iTunes Music Store in the UK, France & Germany, APPLE PRESS INFO (June 15, 2004), https://www.apple.com/pr/library/2004/ 06/15Apple-Launches-iTunes-Music-Store-in-the-UK-France-Germany.html [https://per ma.cc/C5U3-GL34]. Apple expanded the E.U. iTunes Music Store to Austria, Belgium, Finland, Greece, Italy, Luxembourg, Netherlands, Portugal, and Spain on October 26, 2004. Apple Launches EU iTunes Music Store, APPLE PRESS INFO (Oct. 26, 2004), https://www. apple.com/pr/library/2004/10/26Apple-Launches-EU-iTunes-Music-Store.html [https:// perma.cc/LWR7-WZ3L]. 2. See Eric Slivka, iTunes Music Store Goes Live in 12 New European Countries, MACRUMORS (Sept. 28, 2011, 2:20 PM), http://www.macrumors.com/2011/09/28/itunes- music-store-goes-live-in-12-new-european-countries [https://perma.cc/9BD9-64M2]. 3. See id. 4. See Kirk McElhearn, Crossing Borders with the iTunes Store, MACWORLD (Mar. 13, 2013, 6:25 AM), http://www.macworld.com/article/2029991/crossing-borders-with-the- itunes-store.html [https://perma.cc/DE4Z-L9ET]. 5. See id. 6. See id. 7. See id.

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denly find himself unable to access any of the online content he purchased while living in France.8 The fragmentation of the iTunes Music Store begged the ques- tion: why would Apple prevent its European users from buying and accessing cross-border content? The answer lies within E.U. copy- right9 law. Due to copyright licensing limitations, even after eight years of negotiations, the only way Apple could legally operate iTunes in all twenty-eight E.U. Member States was through twenty- eight localized versions.10 Copyright licenses11 are typically territorial and acquired on a per-country basis, which leads to extensive market fragmentation.12 To distribute content across all E.U. Member States, a company must acquire a license in and abide by the copyright law of each individual state.13 This process is so prohibitively complex and expensive that it took Apple, a corporate giant, seven years of negotiations to “overcome the . . . hurdles the European copyright sys-

8. See id. 9. The term “copyright,” as used in this Note, refers to the exclusive right to “own, use, dispose of and bequeath” creative works, as defined by Article 17(1) of the Charter of Fundamental Rights of the European Union. Charter of the Fundamental Rights of the European Union art. 17(1), Dec. 18, 2000, 2000 O.J. (C 364) 12. Copyright law is subject to E.U. regulation “so far as is necessary for the general interest.” Id. A copyright holder may enforce restrictions on use, negotiate licensing agreements for use, and obtain remu- neration for use of these protected creative works. See Commission Staff Working Document: Impact Assessment Accompanying the Document “Proposal for a Regulation of the European Parlia- ment and of the Council to Ensure the Cross-Border Portability of Online Content Services in the Internal Market,” at 61, COM (2015) 627 final (Dec. 9, 2015) [hereinafter Cross-Border Porta- 38291-jle_49-1 Sheet No. 79 Side B 11/02/2016 10:58:58 bility: Impact Assessment]. 10. As of 2015, the European Union has twenty-eight E.U. Member States: Austria, Belgium, Bulgaria, Cyprus, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Sovakia, Slovenia, Spain, Sweden, and the United Kingdom. Member Countries of the EU, EUROPEAN UNION, http://europa.eu/about-eu/coun tries/index_en.htm [https://perma.cc/5F4R-LT75] (last visited Aug. 18, 2016). 11. The term “license,” as used in this Note, refers to the legal instrument through which an entity other than the original copyright holder may acquire a copyright. See, e.g., NOMS Copyright Licensing Information, NATIONAL OFFENDER MANAGEMENT SERVICE, https:// www.gov.uk/government/uploads/system/uploads/attachment_data/file/532724/NOMS _Copyright_Licensing_Information.pdf [https://perma.cc/G6LZ-QY9K] (last visited Aug. 19, 2016). 12. See Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A Single Market for Intellectual Property Rights, at 7, COM (2011) 287 final (May 24, 2011) [hereinafter Single Market for Intellectual Property Rights]. 13. MIREILLE VAN EECHOUD ET AL., HARMONIZING EUROPEAN COPYRIGHT LAW: THE CHALLENGES OF BETTER LAWMAKING 307–08 (P. Bernt Hugenholtz ed., 2009). 38291-jle_49-1 Sheet No. 80 Side A 11/02/2016 10:58:58

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tem poses” and launch iTunes across all E.U. Member States.14 For small, local businesses, this challenge is practically insurmountable.15 In the digital market,16 copyright territoriality presents an additional problem. From its inception, the intent of the Internet was to be a borderless, decentralized medium, available to and accessible by all.17 Distributing territorially-copyrighted content on the Internet requires creating borders where typically none exist.18 These borders are made possible through geo-blocking, which is the practice of denying consumers access to websites and digital content based on their geographical location.19 Geo-blocking practices usually use the consumer’s Internet protocol (IP) address to identify his location,20 and then deny him access, deny him the ability to purchase, or re-route him to a local website with different products or pricing.21 Due to the territoriality of copyright licensing, Apple uses geo-blocking to reroute consumers to a local version of iTunes, which contains locally available copyrighted content.22 While the practice of geo-blocking has become instrumental for copyright holders and licensees, it is not without controversy. Geo- blocking frustrates consumers, who increasingly believe they have a right to borderless access to online content.23 It perpetuates digital piracy by these consumers, who choose to download content ille-

14. Ben Zevenbergen, Amazon Has A Long Way to Go in Europe for Streaming, TECHDIRT (Sep. 21, 2012, 3:05 AM), https://www.techdirt.com/articles/20120919/14524220435/

amazon-has-long-way-to-go-europe-streaming.shtml [https://perma.cc/J9CS-36FG]. 38291-jle_49-1 Sheet No. 80 Side A 11/02/2016 10:58:58 15. See Single Market for Intellectual Property Rights, supra note 12, at 7. R 16. The term “digital market,” as used in this Note, refers to the online medium for the supply and exchange of content and services on the Internet. See Communication from the Commission to the European Parliament, the Council, the European Economic and Social Commit- tee and the Committee of the Regions: A Digital Single Market Strategy for Europe, § 1, COM (2015) 192 final (May 6, 2015) [hereinafter Digital Single Market Strategy]. 17. See Marketa Trimble, The Future of Cybertravel: Legal Implications of the Evasion of Geolocation, 22 FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 567, 575 (2012). 18. See id. 19. See Digital Single Market Strategy, supra note 16, § 2.3. R 20. See Trimble, supra note 17, at 594 (quoting Joshua McIntyre, Balancing Expectations R of Online Privacy: Why Internet Protocal (IP) Addresses Should Be Protected As Personally Identifiable Information, 60 DEPAUL L. REV. 895, 900 (2011)) (stating that Internet protocol addresses are individual identifiers on the Internet “analogous to . . . physical mailing address[es]”). 21. See Digital Single Market Strategy, supra note 16, § 2.3. R 22. See Cross-Border Portability: Impact Assessment, supra note 9, at 75 (naming iTunes as R an online content provider engaging in territorial use restrictions in the European Union). 23. See id. at 16–17. 38291-jle_49-1 Sheet No. 80 Side B 11/02/2016 10:58:58

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gally when they cannot purchase it legally.24 Geo-blocking may also result in lost profits to right holders and licensees due to content inaccessibility in other jurisdictions.25 Furthermore, geo- blocking discriminates against immigrants and linguistic minorities, who are denied access within the European Union to online content in their native languages.26 Finally, geo-blocking is a barrier to the creation of a true digital single market in Europe.27 In May 2015, the European Commission28 issued a proposal for a Digital Single Market Strategy for Europe (May 2015 Proposal),29 which aims to standardize rules across the twenty-eight E.U. Mem- ber States for copyright, taxes, and online sales.30 In response to

24. See Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Towards a Modern, More European Copyright Framework, at 4, COM (2015) 626 final (Dec. 9, 2015) [hereinafter Copyright Framework]. 25. See Jacqui Cheng, Finally—One iTunes Store to Rule Them All (in Europe), ARSTECHNICA (July 12, 2012, 12:46 PM), http://arstechnica.com/tech-policy/2012/07/ finally-one-itunes-store-to-rule-them-all-in-europe [https://perma.cc/X8YK-9LHS] (“There have been numerous cases in which the royalties collected on songs ended up being lost or never paid out to artists and songwriters due to this cross-country licensing complication, further showing the need for unified music stores across the [European Union].”); Euro- pean Commission Press Release IP/12/772, Copyright: Commission Proposes Easier Music Licensing in the Single Market (July 11, 2012). 26. This view was expressed by Julia Reda, a German Member of the European Parlia- ment, in an interview with EurActiv Germany: [Geo-blocking] contradicts the basic principles of the common market in the [European Union] and leads to discrimination, especially of immigrants or linguistic minorities. [For example,] the Danish minority in northern Germany is not able to access content provided by the Danish public broadcasting station on the internet, though it is perfectly acceptable to do so via television and radio.

Nicole Sagener, MEP Reda: Commission is Too Cautious on Geo-blocking and Copyright Law, 38291-jle_49-1 Sheet No. 80 Side B 11/02/2016 10:58:58 EURACTIV (June 9, 2015, 7:49 AM), http://www.euractiv.com/sections/infosociety/mep- reda-commission-too-cautious-geo-blocking-and-copyright-law-315219 [https://perma.cc/ SPC8-FJJC]. 27. See Digital Single Market Strategy, supra note 16, § 2.3. R 28. The European Commission is the executive body of the European Union and represents its general interests. About the European Commission, EUROPEAN COMMISSION, http://ec.europa.eu/about/index_en.htm [https://perma.cc/XT22-6CXU] (last updated July 7, 2016). The European Commission has the right to propose legislation, administer and implement E.U. policies, enforce E.U. law, and negotiate on behalf of the European Union. See id. The European Commission also has the right of initiative, meaning that no other body may put forth draft legislation. Select Committee on European Scrutiny, Thirty-Third Report, PARLIAMENT.UK ¶ 83 (June 21, 2012), http://www.publications.parliament.uk/pa/ cm200102/cmselect/cmeuleg/152-xxxiii/15207.htm#a15 [https://perma.cc/FNQ7- GHAM]. 29. The proposal for a Digital Single Market Strategy for Europe (May 2015 Proposal) was the first proposal as part of the larger Digital Market Strategy. See Digital Single Market Strategy, supra note 16. R 30. See Mike Snider, EU Seeks a Digital Single Market to Spur Tech Economy, USA TODAY (May 29, 2015), http://www.usatoday.com/story/tech/2015/05/28/eu-digital-single-mar ket/28063119 [https://perma.cc/36DL-2RXW]. 38291-jle_49-1 Sheet No. 81 Side A 11/02/2016 10:58:58

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the ongoing controversy over the use of geo-blocking, the Euro- pean Commission proposed ending “unjustified” geo-blocking practices.31 The European Commission did not precisely define in the May 2015 Proposal what constituted an “unjustified” geo-blocking practice, but rather only named anticompetitive geo-blocking practices as one example.32 This proposal, therefore, did not go further in eliminating geo-blocking than previous anticompetitive geo-blocking court decisions or European Commission reports and, indeed, did not address the matter of geo-blocking as it relates to copyright.33 Seven months later, in December 2015, the European Commis- sion issued a supplementary proposal (December 2015 Proposal)34 that, for the first time, addressed a copyright-related geo-blocking practice—that of “cross-border portability”—that is, an E.U. consumer’s cross-border access to digital content purchased within the consumer’s country of residence (for example, while traveling to other countries within the European Union).35 This proposal would not expand the consumer’s access to digital content or otherwise decrease copyright-related geo-blocking in any way.36 This proposal therefore also fell short of sufficiently addressing the geo- blocking controversy. This Note will argue first that neither the May nor December 2015 Proposal was a sufficient solution to the geo-blocking problem, and second that the European Commission should propose a regulation which eliminates all copyright-related geo-blocking within the European Union through a unification of E.U. copy- 37 right law and a pan-E.U. licensing requirement. As discussed 38291-jle_49-1 Sheet No. 81 Side A 11/02/2016 10:58:58

31. See Digital Single Market Strategy, supra note 16, § 2.3. R 32. See id. 33. See, e.g., European Commission Guidelines on Vertical Restraints, 2010 O.J. (C 130) 1, ¶ 52; Joined cases C-403/08 & C-429/08, Football Association Premiere League et al. v. QC Leisure et al. & Murphy v. Media Protection Services Ltd, 2011 E.C.R.I-09083, 9083 [hereinafter FA Premiere League]. 34. The proposal addressing cross-border portability (December 2015 Proposal) was issued as part of the Digital Single Market Strategy for Europe. Proposal for a Regulation of the European Parliament and of the Council on Ensuring the Cross-Border Portability of Online Content Services in the Internal Market, COM (2015) 627 final (Dec. 9, 2015) [hereinafter Cross-Border Portability]. 35. See id. at 2. 36. See id. at 7. 37. Geo-blocking is also practiced in the European Union for non-copyright-related purposes such as the regulation of the gambling industry, but this practice is outside the scope of this Note. For more information, see Peter Teffer, EU Commissioners At Odds Over Geo-blocking, EU OBSERVER (Mar. 30, 2015), https://euobserver.com/connected/128194 [https://perma.cc/6UWY-A2JF]. 38291-jle_49-1 Sheet No. 81 Side B 11/02/2016 10:58:58

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below, the existing territorial copyright framework is an impediment to the success of the E.U. digital market. Territorial copyright and copyright-related geo-blocking practices have led to an increase of Internet piracy and unauthorized access to content that would be stemmed by a unified E.U. copyright code and pan-E.U. licensing framework.38 The European Commission should adopt a unified E.U. copyright code and a pan-E.U. licensing model to address the problems caused by copyright-related geo-blocking and create a true single digital market in Europe. As a foundation for this proposal, Part I of this Note provides the historical background of geo-blocking and territorial copyright in the European Union as well as the contemporary consumer reaction to geo-blocking practices. Part II draws upon the historical efforts against geo-blocking and consumer reaction to propose a new strategy for E.U. copyright in the digital age. The Note con- cludes that the European Commission should implement this proposal as a significant step toward the creation of a single digital market in the European Union.

I. BACKGROUND First, this Part provides an overview of the territoriality of copyright law and discusses its conflict with the borderless nature of the Internet. Next, it discusses the current practice of geo-blocking as a solution to this tension and examines the problems that have emerged within the European Union as a result of geo-blocking. Lastly, this Part provides an overview of the historical treatment of geo-blocking by the European Commission and the European 38291-jle_49-1 Sheet No. 81 Side B 11/02/2016 10:58:58 Court of Justice and considers the effectiveness of the solutions proposed by both bodies.

A. Territorial Copyright Within a Borderless Internet The global economy has experienced a rapid shift with the emer- gence of the digital market and growth of online commerce.39 With growing access to the Internet,40 online purchases of digital content have become a primary way for E.U. citizens to consume

38. See Paula Dootson & Nicolas Suzor, The Game of Clones and The Australia Tax: Diver- gent Views About Copyright Business Models and the Willingness of Australian Consumers to Infringe, 38 U.N.S.W. L. J. 206, 226 (2015). 39. See Digital Single Market Strategy, supra note 16, § 1. R 40. Eighty-one percent of E.U. households have Internet access and eighty-three percent of E.U. citizens use the Internet daily. Cross-Border Portability: Impact Assessment, supra note 9, at 66. R 38291-jle_49-1 Sheet No. 82 Side A 11/02/2016 10:58:58

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music, videos, games, and live events.41 The increasing popularity of digital content has led to a corresponding rise in the use of digital content services such as iTunes, Apple Music, Napster, and Spo- tify,42 which predominately provide their users with copyrighted content.43 The Internet carries with it a promise of borderless access.44 From its beginnings, the Internet was heralded as a network without boundaries, a “new frontier . . . on which no nation’s Neil Arm- strong would plant its flag.”45 The Internet allows people from all over the world to access a single network of content, freely exchanging ideas and information across national borders.46 How- ever, this promise of borderless access to content does not match the legal reality of the E.U. copyright framework.47 The structure of modern intellectual property law is “based on the principle of territoriality,” and copyright holders consequently hold territorially limited licenses.48 Typically, an entity will acquire rights on a per-country basis.49 As a result, that entity may only distribute the copyrighted content in the select countries in which it holds a license.50 While an entity acquiring copyright licenses theoretically can gain E.U.-wide licenses by purchasing rights in each individual nation, in practice, this method is prohibitively expensive.51 In a 2011 study, the European Commission found that a company that seeks to obtain and maintain copyright licenses for twenty-seven52 Member States over the course of twenty

41. “[B]etween 2009 and 2013, consumers’ spending increased by [eighty-six per-

cent] on digital music downloads and by 413[ percent] on streaming . . . . [Between 2010 38291-jle_49-1 Sheet No. 82 Side A 11/02/2016 10:58:58 and 2013,] consumers’ spending on digital video increased by 400[percent].” Id. at 4. Furthermore, “[E.U.] consumer spending on video games is estimated at more than =C20 billion in 2015, out of a global market of =C68 billion,” and “[fifty-eight percent of] consumers in the [E.U.] access live events (such as sports, concerts, etc.) online.” Id. 42. See id. annex 7. 43. See id. at 19. 44. See Beverley Earle & Gerald A. Madek, International Cyberspace: From Borderless to Balkanized???, 31 GA. J. INT’L & COMP. L. 225, 225 (2003). 45. Id. 46. See Chad J. Doellinger, Trademarks in Cyberspace: The Pseudo-Abrogation of the Territo- riality Principle, 2 CHI.-KENT J. INTELL. PROP. A-1, A-1 (2003). 47. See Trimble, supra note 17, at 575–76. R 48. Doellinger, supra note 46, at A-1. R 49. See Trimble, supra note 17, at 611. R 50. See id. 51. See Single Market for Intellectual Property Rights, supra note 12, at 7; EECHOUD ET AL., R supra note 13, at 308. R 52. At the time of the study, there were only twenty-seven E.U. Member States. See Single Market for Intellectual Property Rights, supra note 12, at 7. R 38291-jle_49-1 Sheet No. 82 Side B 11/02/2016 10:58:58

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years would have to pay an estimated 200,000 euros.53 The prohibitively expensive cost puts E.U. businesses at a competitive disadvantage against many of their competitors outside the European Union, which are only subject to copyright regulation at the federal level.54 In comparison, obtaining a copyright license for only thirteen Member States may cost up to ten times more than a U.S. license.55 Moreover, even if an entity could afford to purchase the copyright licenses in every nation, managing worldwide rights would be extremely difficult and administratively burdensome due to differences in local copyright laws.56 E.U.-wide licensing could even be impossible to acquire due to parallel licensing or contractual limits.57 Parallel licensing occurs when two or more distinct entities hold the same rights to a single work in different territories, making it impossible for a single entity to own a universal license due to the other’s preexisting owner- ship.58 An entity’s rights may also be contractually limited.59 Con- tractually limited licenses typically occur when the original right holder transfers rights to publishers, producers, distributors, or other intermediaries with territorially limited mandates.60 For example, an author selling the rights to his book to a publisher may limit that license to only certain territories.61 Parallel and contractually limited licensing are common among E.U. businesses.62 Not only are larger market licenses more expensive, but it is also more cost effective for a local business to choose not to engage in cross-border sales or distribution rather than to navigate the com- plexities required to comply with different laws in each Member 63 State. Indeed, in a survey conducted by the European Commis- 38291-jle_49-1 Sheet No. 82 Side B 11/02/2016 10:58:58 sion, forty-five percent of E.U. companies considering expanding their businesses to include cross-border sales of digital content

53. See id. 54. See P. Bernt Hugenholtz, The Dynamics of Harmonization of Copyright at the European Level, in CONSTRUCTING EUROPEAN INTELLECTUAL PROPERTY 273, 286 (Christophe Geiger ed., 2013). 55. Single Market for Intellectual Property Rights, supra note 12, at 7. R 56. See Trimble, supra note 17, at 611. R 57. See id. 58. See id. 59. See id; Richard Eccles, Online Sales and Competition Law Controls, 13 INT’L J. FRANCHISING L. 1, 3 (2015). 60. See EECHOUD ET AL., supra note 13, at 310–11. R 61. See Thomas Woll, Selling Foreign Rights in Our Digital Age, INDEP. BOOK PUBLISHERS ASS’N (Sept. 4, 2013), http://www.ibpa-online.org/selling-foreign-rights-in-our-digital-age/ [https://perma.cc/V4PA-SWYD]. 62. See Trimble, supra note 17, at 611. R 63. See id. at 611, n.179. 38291-jle_49-1 Sheet No. 83 Side A 11/02/2016 10:58:58

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named territorial copyright concerns as a barrier to their potential expansion.64

B. Geo-Blocking and the Issues It Presents This Section introduces the practice of geo-blocking as a solution to the tension between territorial copyright and the borderless Internet. This Section then introduces the piracy problem that results from geo-blocking and frames the discussion around two main concerns: frustration of consumer expectations and lost profits to right holders and licensees.

1. Geo-Blocking as the Current Solution to the Problem of Territorial Copyright in the Digital Market In the digital age, companies holding territorially limited licenses must create geographical borders within a borderless Internet to comply with copyright law while maintaining an online presence.65 Geo-blocking, the practice of denying access to websites based on the location of the consumer’s IP address, has emerged as the standard solution to this problem.66 By creating geographical borders within an otherwise borderless Internet, companies are able to “segment markets along national borders” to comply with their territorially defined copyright licenses or contractual requirements.67 This territorial partitioning of the Internet stands in direct contrast to the promise of a borderless Internet, but is necessary under a legal framework which protects copyright territoriality.68 It is likely that as long as copyright 38291-jle_49-1 Sheet No. 83 Side A 11/02/2016 10:58:58 remains territorial, the practice of geo-blocking will persist.69

2. The Piracy Problem The promise to consumers of a borderless Internet is increasingly at odds with the territorial expectations of copyright holders and licensees as E.U. consumers increasingly expect to access and purchase content “at any time and from anywhere,” regardless of their location or the origin of the content.70 This expectation has far-reaching implications for right holders, because consumers’

64. See Digital Single Market Strategy, supra note 16, § 2.4. R 65. See Doellinger, supra note 46, at A-1. R 66. See Digital Single Market Strategy, supra note 16, § 2.3. R 67. Id. 68. See Trimble, supra note 17, at 570–71. R 69. See id. 70. See Cross-Border Portability: Impact Assessment, supra note 9, at 66. R 38291-jle_49-1 Sheet No. 83 Side B 11/02/2016 10:58:58

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expectation of borderless access has resulted in an increased acceptance of Internet piracy as a means of access—despite its ille- gality—and a corresponding decrease in right holder profits.71 The dichotomy is particularly strong in the European Union, where it can be easier to physically cross a border into another Member State than to access digital content from that State.72 Nearly 1.7 million E.U. citizens commute from one Member State to another for work.73 Thanks to the Schengen Agreement,74 they do not even need to pass through border checks.75 However, the moment they cross the border they can no longer listen to their iTunes account on their commute.76 Considering the usual ease of cross-border access, it is perhaps unsurprising that a 2013 survey conducted by the Office for Harmonization in the Internal Market found that twenty-two percent of E.U. citizens consider it acceptable to download or access copyright-protected content illegally when they lack a legal alternative in their country.77 In the absence of any official response to this demand for cross- border access, right holders have responded to the increase in illegal Internet piracy with more rigorous geo-blocking and anti-piracy measures, but these measures have seen little success.78 For example, Australia, the country whose residents are subjected to the greatest amount of geo-blocking by foreign companies,79 is consid-

71. See Copyright Framework, supra note 24, at 4. R 72. See Nuria Boot & Guntram B. Wolff, Cross-border Commuters and Trips: the Relevance of Schengen, BRUEGEL (Dec. 3, 2015), http://bruegel.org/2015/12/cross-border-commuters-and-trips-the-relevance-of-schengen/ [https://perma.cc/U2NX-9NL4].

73. Id. 38291-jle_49-1 Sheet No. 83 Side B 11/02/2016 10:58:58 74. The Schengen Agreement is a 1985 treaty establishing a zone in the European Union in which persons may cross internal borders without being subjected to border checks. Schengen Area, EUR. COMM’NON MIGRATION & HOME AFF., http://ec.europa.eu/ dgs/home-affairs/what-we-do/policies/borders-and-visas/schengen/index_en.htm [https://perma.cc/P52N-Y8ND] (last updated Jan. 29, 2016). The Schengen zone is com- promised of the territories of all Member States which are parties to the treaty. Id. As of 2013, the following Member States are parties: Austria, Belgium, Czech Republic, Den- mark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lithua- nia, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and Switzerland. Id. 75. See id. 76. See McElhearn, supra note 4. R 77. OFF. FOR HARMONIZATION IN THE INTERNAL MKT., EUROPEAN CITIZENS AND INTEL- LECTUAL PROPERTY: PERCEPTION, AWARENESS AND BEHAVIOUR (Nov. 2013), https://euipo. europa.eu/ohimportal/documents/11370/80606/IP+perception+study [https:// perma.cc/P25W-6MUV]. 78. See generally Dootson & Suzor, supra note 38 (discussing the prominence of digital R piracy in Australia despite rigorous geo-blocking and anti-piracy measures). 79. Australia is subjected to the greatest amount of geo-blocking due to the phenomenon of “digital distance.” See id. at 207. Due to its remote location, physical goods have 38291-jle_49-1 Sheet No. 84 Side A 11/02/2016 10:58:58

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ered a “world leader in rates of copyright infringement.”80 Esti- mates suggest that, despite their relatively small population, Australians form the largest block of users of BitTorrent, an online file distribution system primarily used for unauthorized downloads of digital content.81 Some scholars have suggested consumer willingness to engage in digital piracy results from a difference in the social stigma against theft of physical property versus the social stigma against theft of digital property.82 They argue that while the immorality of the theft of physical property is well-established, Internet users do not attach the same immorality to digital copyright infringement.83 However, recent studies suggest that consumers are willing to pay for digital content if it is available to them for purchase, and that it is therefore the geo-blocking practice, and not the consumers’ immorality, that leads to piracy and lost profits for right holders.84 The rising popularity of cybertravel, in which consumers utilize proxy servers to change the geographical location of their IP address in order to access and purchase content not normally available in their geographical location, is evidence of consumer willingness to purchase digital content if it is available.85 While cybertravel is not necessarily a legal practice, consumers’ use of it

necessarily been more expensive and more difficult to access in Australia than in other countries, and this trend of increased prices and limited imports has carried over to the digital market. See id. at 209–10. 80. Id. at 206. 81. See id.

82. See Kevin P. Siu, Technological Neutrality: Toward Copyright Convergence in the Digital 38291-jle_49-1 Sheet No. 84 Side A 11/02/2016 10:58:58 Age, 71 U. TORONTO FAC. L. REV. 76, 101–02 (2013) (“Whereas the concept of theft and its immorality is well[-]established with physical property, copyright infringement may never attract the same social stigma despite the best efforts of the creative industry.”). 83. See id. Several studies have been conducted on consumers’ motivations for digital piracy which suggest that there may be less stigma attached to digital piracy than the theft of physical property; however, many of these studies do not consider the lack of legal access to digital content as a factor. See, e.g., Sulaiman Al-Rafee & Timothy Paul Cronan, Digital Piracy: Factors that Influence Attitude Toward Behavior, 63 J. BUS. ETHICS 237, 247–49, Appendix A (2006); Phillip Mandel & Bernd Sussmuth,¨ Digital Piracy in Europe: Some First Micro-Evidence Based on a German Survey, SOC’Y FOR ECON. RES. ON COPYRIGHT ISSUES 1 (2009). 84. See Dootson & Suzor, supra note 38, at 226. This view has also been articulated by R Andrus Ansip, European Commissioner for the Digital Single Market, who stated in a press conference that E.U. legislation is “pushing people to steal . . . [who] are ready to pay.” See EU Commisioner Talks Cross-Border Piracy and Spotify’s Success in Midem Keynote: Watch, BILL- BOARD (June 9, 2015), http://www.billboard.com/articles/business/6590734/eu-commisioner-talks-cross-border-piracy-and-spotifys-success-in-midem [https://perma.cc/LCZ7- 9SFS]. 85. See generally Trimble, supra note 17 (describing the phenomenon and rising popu- R larity of cybertravel). 38291-jle_49-1 Sheet No. 84 Side B 11/02/2016 10:58:58

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to purchase content nevertheless indicates a willingness to pay for digital content.86 Consumers may use cybertravel for unauthorized access to free content, such as live broadcasts of television programs normally unavailable within the consumer’s Member State.87 However, cybertravel is also frequently used to purchase digital content.88 For example, it is often used to create an iTunes account in a different country to access digital content only available in that country.89

C. Historical Treatment of Geo-Blocking in the European Union This Section provides an overview of the historical treatment of geo-blocking by the European Commission and the European Court of Justice (ECJ).90 It begins with a discussion of the Treaty on the Functioning of the European Union (TFEU), which has formed the authoritative basis for the treatment of geo-blocking by the European Commission and ECJ. This Section then outlines the European Commission’s role in promoting the E.U. digital market as it relates to geo-blocking. It then discusses the historical condemnation of contractual geo-blocking by the European Com- mission and the ECJ. Finally, this Section discusses the European Commission’s historical treatment of copyright-related geo-blocking, territorial copyright, and the resulting piracy concerns.

1. The TFEU as an Authoritative Basis for the Treatment of Geo-Blocking

The TFEU, along with the Treaty on European Union, forms the 38291-jle_49-1 Sheet No. 84 Side B 11/02/2016 10:58:58 constitutional basis for the European Union.91 The TFEU originated as the 1957 Treaty Establishing the European Commu-

86. See id. 87. For example, the 2010 coverage of the Winter Olympics was available online in France, the host country, but access to this transmission was unavailable in other Member States due to copyright-related reasons. See Hugenholtz, supra note 54, at 286–87. An E.U. R consumer outside France could therefore only access this transmission through cybertravel. See Trimble, supra note 17, at 574. R 88. See generally Trimble, supra note 17 (discussing cybertravel and its use by consum- R ers to access both legal and illegal content). 89. See Dootson & Suzor, supra note 38, at 226. R 90. The European Court of Justice (ECJ) is the highest court of the European Union. See Court of Justice of the European Union, EUROPA, https://europa.eu/european-union/about -eu/institutions-bodies/court-justice_en [https://perma.cc/HUU3-685Q] (last updated Aug. 19, 2016). 91. Consolidated Version of the Treaty on the Functioning of the European Union art. 1, Mar. 30, 2010, 2010 O.J. (C 83) 47 [hereinafter TFEU]. 38291-jle_49-1 Sheet No. 85 Side A 11/02/2016 10:58:58

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nity (Rome Treaty),92 but was amended and renamed to the TFEU by the Treaty of Lisbon, which entered into force on December 1, 2009.93 The TFEU sets forth the operational structure of the Euro- pean Union94 and prohibits Member States from restricting the free movement of goods, capital, services, and people within the European Union.95 It also grants authority to the European Com- mission, the executive body of the European Union, to propose directives96 and regulations97 to be adopted by the European Council and Parliament.98 As discussed in Sections 3 and 4 below, the TFEU has formed the authoritative basis for all legislative actions to date against geo-blocking. This Section focuses on four articles of the TFEU that have formed the authoritative basis for most legislative and judicial actions to date against geo-blocking: Articles 101 and 56, which have been used to combat contractual geo-blocking,99 and Articles 114 and 118, which have been used to combat copyright-related geo-blocking.100 Article 101 prohibits anticompetitive agreements as follows: “The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associa- tions of undertakings and concerted practices which may affect trade between Member States and which have as their object or

92. See Treaty Establishing the European Economic Community art. 314, Mar. 25, 1957, 298 U.N.T.S. 1. 93. Treaty of Lisbon Amending the Treaty on European Union and the Treaty Estab- lishing the European Community art. 2, Dec. 13, 2007, 2007 O.J. (C 306) 1 [hereinafter

Treaty of Lisbon]. 38291-jle_49-1 Sheet No. 85 Side A 11/02/2016 10:58:58 94. See TFEU, supra note 91, art. 1. R 95. The free movement of goods, capital, services, and people within the European Union is also referred to as the European Union’s “four freedoms.” See Jenine Hulsmann, Exclusive Territorial Licensing of Content Rights After the EU Premier League Judgments, 26 ANTI- TRUST 3, 36 n.1 (2012). 96. The term “directive,” as used in this Note, refers to E.U. legislation which sets out general rules to be implemented in the national laws of Member States. See Cross-Border Portability: Impact Assessment, supra note 9, at 25. The implementation of a directive is not R necessarily uniform, as Member States are given broad discretion. See id. Furthermore, due to the long process of implementation and consultation between Member States, the European Commission, and the European Parliament, a directive usually takes between five and ten years to implement. See EECHOUD ET AL., supra note 13, at xix. R 97. The term “regulation,” as used in this Note, refers to E.U. legislation which is directly applicable to all Member States immediately after adoption, similar to a federal law. See Cross-Border Portability: Impact Assessment, supra note 9, at 25. A regulation allows for R uniform application across all E.U. Member States. See id. 98. See generally TFEU, supra note 91 (providing that the European Commission may R propose directives and regulations to achieve the objectives of the treaty). 99. See infra Part I.C.3. 100. See infra Part I.C.4. 38291-jle_49-1 Sheet No. 85 Side B 11/02/2016 10:58:58

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effect the prevention, restriction or distortion of competition within the internal market.”101 The European Commission has interpreted Article 101 to apply to all contractual prohibitions on cross-border sales and therefore to contractual geo-blocking provisions.102 Article 56 of the TFEU prohibits restrictions on the free circula- tion of services within the European Union by “nationals of Mem- ber States who are established in a Member State other than that of the person for whom the services are intended.”103 As this Note discusses later in this Section, the ECJ has interpreted this to pro- hibit contractual geo-blocking agreements.104 The TFEU also contains provisions that may be used to combat copyright-related geo-blocking and reform the European copyright framework. Under Article 114 of the TFEU, the European Com- mission has the authority to propose measures to the European Council and Parliament “which have as their object the establishment and function of the internal market.”105 The European Com- mission accordingly has the authority to propose legislation modifying the legal framework for the E.U. digital market.106 Fur- thermore, in a significant departure from the original Rome Treaty, the Lisbon Treaty added Article 118 to the TFEU, which provides authority for the harmonization of intellectual property rights as follows: In the context of the establishment and functioning of the Inter- nal Market, the European Parliament and the Council, acting in accordance with the ordinary legislative procedures, shall establish measures for the creation of European intellectual property rights to provide uniform protection of intellectual property rights 38291-jle_49-1 Sheet No. 85 Side B 11/02/2016 10:58:58 throughout the [European] Union and for the setting up of centralized [European] Union-wide authorization, coordina- tion, and supervision arrangements.107 Article 118 of the TFEU thus gives the European Commission explicit authority to propose legislation for the harmonization of copyright law and copyright licensing in the European Union.108 Some scholars have broadly interpreted Article 118 of the TFEU as authorizing not only the creation of a common E.U. copyright

101. TFEU, supra note 91, art. 101. R 102. See European Commission Guidelines on Vertical Restraints, supra note 33, ¶ 52. R 103. TFEU, supra note 91, art. 56. R 104. See generally FA Premiere League, supra note 33. R 105. Cross-Border Portability: Impact Assessment, supra note 9, at 19. R 106. See id. 107. TFEU, supra note 91, art. 118 (emphasis added). R 108. See id. 38291-jle_49-1 Sheet No. 86 Side A 11/02/2016 10:58:58

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code and pan-E.U. licensing requirement, but also the simultane- ous abolishment of national copyright licenses.109 Furthermore, scholars point to the significance of Article 118 in not only explicitly providing authority for the harmonization of E.U. copyright law, but also making it far easier to adopt a regulation instituting harmonization.110 Although the European Com- mission might have been able to propose a regulation harmonizing copyright under Article 114, before the addition of Article 118, it would have been necessary for all members of the European Coun- cil and Parliament to unanimously agree to adopt such a regulation.111 Article 118 only requires “ordinary legislative procedures,” meaning only a qualified majority is needed to adopt a regulation under it.112 Since the addition of Article 118, it is much more feasi- ble for the European Council and Parliament to adopt a proposed regulation harmonizing E.U. copyright law.113

2. The European Commission’s Promotion of a Digital Single Market In 2000, the European Commission began to exercise its authority in response to the rapid growth of the digital market, working toward a more harmonized legal framework to ensure a strong E.U. presence in digital commerce.114 On June 8, 2000, the European Commission issued the Elec- tronic Commerce Directive (E-Commerce Directive) to “ensure the free movement of information society services between the Mem- ber States.”115 Crafted in response to the growth of the digital market, the E-Commerce Directive set up a more harmonized legal 38291-jle_49-1 Sheet No. 86 Side A 11/02/2016 10:58:58 framework for electronic commerce within the European Union.116 However, the E-Commerce Directive protected territorial distinctions between the copyright laws of Member States.117

109. See Hugenholtz, supra note 54, at 290. R 110. See Estelle Derclaye & Trevor Cook, An EU Copyright Code: What and How, If Ever? 3 INTELL. PROP. Q., 259, 263 (2011). 111. See id. 112. See id. 113. See id. 114. See Directive 2000/31/EC, of the European Parliament and of the Council of 8 June 2000 on Certain Legal Aspects of Information Society Services, in Particular Elec- tronic Commerce, in the Internal Market, 2000 O.J. (L 178) 1 [hereinafter E-Commerce Directive]. 115. Id. art. 1(1). 116. See id. 117. See Susanna H.S. Leong & Cheng Lim Saw, Copyright Infringement in a Borderless World—Does Territoriality Matter?, 15 INT’L J. L. & INFO. TECH. 38, 51–52 (2007). 38291-jle_49-1 Sheet No. 86 Side B 11/02/2016 10:58:58

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Article 3 of the E-Commerce Directive provides that no Member State may “restrict the freedom to provide information society ser- vices118 from another Member State,” however, restrictions due to copyright119 and contractual obligation120 are explicitly excluded from this requirement.121 This exclusion may be partially explained by the fact that the E-Commerce Directive predates the Lisbon Treaty, and the European Commission therefore did not yet have the explicit authority under Article 118 of the TFEU to harmonize intellectual property rights.122 While the E-Commerce Directive was the first attempt to harmonize the legal framework of the digital market, it was adopted while the digital market was still in its infancy and as such did not address many of the concerns that arose in the years following. In its May 2015 Proposal, the European Commission announced its Digital Single Market Strategy, a comprehensive proposal for addressing these concerns and further harmonizing the E.U. digital market.123 It estimated that a more harmonized E.U. digital market could contribute an additional 415 billion euros to European gross domestic product.124 In the May 2015 Proposal, the European Commission identified three Pillars of the Digital Single Market Strategy: (1) improving access to digital content and services, (2) promoting the expansion of digital networks,125 and (3) develop- ing the European Union’s digital economy.126 Unlike the E-Com- merce Directive, the May 2015 Proposal included copyright law as an area that needed to be addressed to harmonize the E.U. digital market.127 This focus on copyright was also likely in response to 38291-jle_49-1 Sheet No. 86 Side B 11/02/2016 10:58:58 118. The term “information society services” refers to any service provided at a distance by means of electronic equipment. See E-Commerce Directive, supra note 114, art. 2(a) R (referring to Article 1(2) of Directive 98/48/EC, of the European Parliament and of the Council of 20 July 1998 amending Directive 98/34/EC Laying Down a Procedure for the Provision of Information in the Field of Technical Standards and Regulations, 1998 O.J. (L 217) 18). 119. See infra Part I.C.4. 120. See infra Part I.C.3. 121. E-Commerce Directive, supra note 114, art. 3(1)–(3), annex. R 122. See supra text accompanying note 107 (indicating that Article 118 of the Treaty on R the Functioning of the European Union (TFEU), added to the treaty in 2009 as part of the Lisbon Treaty reform, is a source of authority for the European Commission to harmonize intellectual property rights). 123. See Digital Single Market Strategy, supra note 16, § 1. R 124. Id. 125. “Digital Networks,” as defined by the European Commission, refers to networks that provide wired and wireless broadband access to companies and consumers. See id. § 3.1. 126. See id. §1. 127. See id. § 2.4. 38291-jle_49-1 Sheet No. 87 Side A 11/02/2016 10:58:58

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several preceding years of controversy over geo-blocking practices, as discussed in the following Sections. While the May 2015 Proposal did not specify what measures should be taken toward harmonization, it included a timeline for future studies and proposals that would more directly address individual concerns. One such proposal addressing cross-border availability of digital content was released in December 2015 and is discussed in greater detail in Section 4.128

3. Historical Treatment of Contractual Geo-Blocking by the European Commission and ECJ The geo-blocking controversy emerged in the years between the 2000 E-Commerce Directive and the May 2015 Proposal. While the E-Commerce Directive included a strong protection of territorial copyright and did not address geo-blocking at all, in the interven- ing years, the European Commission and the ECJ grew increasingly concerned about potential downsides.129 In particular, both had started treating contractual geo-blocking provisions as anticompetitive agreements violating Articles 101 and 56 of the TFEU.130 The European Commission first addressed the issue of anticompetitive geo-blocking in 2010, when it issued its Guidelines on Vertical Restraints.131 In these guidelines, the European Commission identified certain restrictive practices as automatic infringements of Arti- cle 101 of the TFEU, including contractual restrictions on Internet sales, advertising, and price discrimination.132 Some commenta- tors interpreted these guidelines as banning the use of contractual provisions that require geo-blocking, because these provisions spe- 38291-jle_49-1 Sheet No. 87 Side A 11/02/2016 10:58:58 cifically restrict cross-border Internet sales.133 In practice, these guidelines have had a minimal effect on contractual geo-blocking, as companies with a market share below thirty percent are exempt from the guidelines, and the few with a market share above thirty percent may escape infringement by asserting that their practices have an “objective justification.”134

128. See Cross-Border Portability, supra note 34, at 14–17. R 129. See E-Commerce Directive, supra note 114, art. 3(1)–(3), annex. R 130. See European Commission Guidelines on Vertical Restraints, supra note 33, ¶ 52; R FA Premiere League, supra note 33, at 9243–44. R 131. See European Commission Guidelines on Vertical Restraints, supra note 33, ¶ 52. R 132. See id. 133. See Eccles, supra note 59, at 3. R 134. An “objective justification” need not be economic and is subject to a deferential standard. See Puya Raad, Effectiveness of EU Law and Policy on Vertical Restraints at Protecting Competition, 3 WROCLAW REV. L., ADMIN. & ECON. 119, 125 (2013). 38291-jle_49-1 Sheet No. 87 Side B 11/02/2016 10:58:58

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The ECJ has also considered anticompetitive geo-blocking practices. In the landmark 2011 case, Football Association Premiere League et. al. v. QC Leisure et al. & Murphy v. Media Protection Services Ltd. (Murphy), English pub owner Karen Murphy challenged the Foot- ball Association Premiere League’s contract with broadcaster Sky that gave Sky exclusive rights to English Premiere League (EPL)135 football in England.136 Murphy had been importing Greek coverage of the EPL in her pub at a much lower cost.137 In Murphy, the ECJ decided that a scheme that gave each licensee an exclusive, national right to broadcast Premiere League matches in each licensee’s home country violated Articles 101 and 56 of the TFEU.138 The Murphy court found that prohibiting services from entering one Member State from another “impermissibly abridged the right to free movement of services” guaranteed by Article 56.139 The Murphy court also found that an agreement partitioning the Euro- pean Union’s market into national markets by contracting out exclusive national rights was anticompetitive and in violation of Article 101.140 The decision in Murphy therefore supported the condemnation of contractual geo-blocking suggested by the Euro- pean Commission in its 2010 Guidelines on Vertical Restraints. In July 2015, relying on the ECJ’s decision in Murphy, the Euro- pean Commission initiated formal antitrust proceedings against Sky UK Limited, The Walt Disney Company, Warner Bros. Entertainment Inc., NBCUniversal, Paramount Pictures, Sony Cor- poration, and Twentieth Century Fox Film Corporation.141 The proceedings allege that contracts between these studios and Sky

UK breached Article 101 of the TFEU due to their inclusion of 38291-jle_49-1 Sheet No. 87 Side B 11/02/2016 10:58:58

135. The English Premiere League is host to the primary football competition in England. See What is Premier League?, FOOTBALL BIBLE, http://www.football-bible.com/soc cer-info/what-is-premier-league.html [https://perma.cc/2AJU-B6UK] (last visited Sept. 26, 2016). 136. See FA Premiere League, supra note 33, at 9188–90. R 137. See id. at 9188–91. 138. See Anastasios Kabuakis, Johan Lindholm & Ryan Rodenberg, British Pubs, Decoder Cards, and the Future of Intellectual Property Licensing after Murphy, 18 COLUM. J. EUR. L. 307, 308 (2012). Notably, the ECJ also indicated that a language split between licensees would not be an impermissible licensing scheme under the TFEU. See id. at 321. 139. Id. at 311. 140. See id. at 315. 141. Bauke Schram, Sky UK, Disney and Warner Bros Hit with EU Antitrust Lawsuit for Geo- blocking Content, INT’L BUS. TIMES (July 23, 2015), http://www.ibtimes.co.uk/sky-uk-disney- warner-bros-hit-eu-antitrust-lawsuit-geo-blocking-content-1512214 [https://perma.cc/ ZQC4-QB8B]; James Kanter & Mark Scott, E.U. Opens Antitrust Case Against Major U.S. Stu- dios and Sky UK, N.Y. TIMES (July 23, 2015), http://www.nytimes.com/2015/07/24/busi ness/international/eu-antitrust-movie-studios-sky-uk.html [https://perma.cc/4V4R-KR V8]. 38291-jle_49-1 Sheet No. 88 Side A 11/02/2016 10:58:58

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contractual geo-blocking provisions requiring distributor Sky UK to block access to television programs and movies owned by the other parties to certain E.U. customers, based on the customers’ locations.142 Investigations for the proceedings have been launched, and if the charges are upheld in accordance with Mur- phy, that will confirm that contractual geo-blocking is a violation of the TFEU.143 Because of the many industry leaders involved, such a decision could be instrumental in eliminating all instances of contractual geo-blocking in the E.U. digital market. This decision would not, however, eliminate the most prominent form of geo- blocking: copyright-related geo-blocking.

4. Historical Treatment of Copyright-Related Geo-Blocking and Territorial Copyright by the European Commission The widely publicized European distribution struggles of the online music industry and content providers, such as iTunes, prompted the European Commission to revisit the E-Commerce Directive’s protection of copyright territoriality.144 In 2009, the European Commission signed a pact with several companies, including Amazon, iTunes, Nokia, and Universal145 to work toward pan-European music distribution (2009 Pact).146 In the same spirit as the 2009 Pact, the European Commission’s 2011 Strategy on Intellectual Property and Single Market Act (2011 Proposal) called for greater transparency in copyright law and for changes in licensing provisions in order to “encourage and facilitate multi-territorial and multi-repertoire licensing” of musical content.147 The 2011 Proposal even entertained the possibility of harmonizing the E.U. 38291-jle_49-1 Sheet No. 88 Side A 11/02/2016 10:58:58

142. See Schram, supra note 141. R 143. See Dervla Broderick, European Commission Issues Formal Charges in its Investigation Into Pay TV Content Licensing Arrangements, OLSWANG (July 30, 2015), http://www. olswang.com/articles/2015/07/european-commission-issues-formal-charges-in-its-investiga tion-into-pay-tv-content-licensing-arrangements-1/ [https://perma.cc/F688-6TL7]. 144. See Cheng, supra note 25. R 145. The full list of signees was as follows: Amazon, BEUC, EMI, iTunes, Nokia, PRS for Music, SACEM, STIM, and Universal. European Commission Press Release IP/09/1548, Competition: Commission’s Online Roundtable on Music Opens Way to Improved Online Music Opportunities for European Consumers (Oct. 20, 2009). 146. The pact to work toward wider distribution (2009 Pact) came out of the music industry Roundtable on the Online Distribution of Music. See Jacqui Cheng, Licensing Pact a Big Step Towards Fixing EU Music Stores, ARSTECHNICA (Oct. 20, 2009), http://arstech nica.com/business/2009/10/music-industry-agrees-to-play-nice-in-europe-with-more- choice [https://perma.cc/5GKM-E8D3]. 147. For the language of the 2011 Strategy on Intellectual Property and Single Market Act (2011 Proposal), see European Commission Press Release IP/12/772, Copyright: Com- mission Proposes Easier Music Licensing in the Single Market (July 11, 2012). 38291-jle_49-1 Sheet No. 88 Side B 11/02/2016 10:58:58

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copyright code under Article 118 of the TFEU.148 Unfortunately, neither the 2009 Pact nor the 2011 Proposal led to any lasting results.149 In 2009, Apple responded to the 2009 Pact with an announcement “that it was ‘optimistic’ about making the iTunes Store available to users in more of Europe over the coming year.”150 As discussed in the Introduction, however, iTunes was not made available to all E.U. consumers until late 2011, and even then only through the painstaking purchase of individual territorial licenses, not the pan-European licensing scheme hoped for in 2009.151 Similarly, although the 2011 Proposal advocated for more harmonization of the E.U. copyright licensing scheme, none has occurred since its adoption.152 In its May 2015 Proposal, the European Commission for the first time expressly named geo-blocking, which creates fragmentation of the internal digital market, as an obstacle to the goal of a digital single market.153 Specifically, the European Commission expressed its intention to end “unjustified” geo-blocking.154 The European Commission did not expressly define unjustified geo- blocking within the May 2015 Proposal, but indicated that the proposal included anticompetitive geo-blocking.155 This proposal was by no means a departure from previous efforts, as anticompetitive geo-blocking is exactly the kind of geo-blocking the European Commission and ECJ have identified as violations of Articles 101 and 56 of the TFEU.156 The European Commission’s May 2015 Proposal did not address geo-blocking on the basis of price differ- entiation or to comply with a specific legal obligation, such as terri- 157

torial copyright. 38291-jle_49-1 Sheet No. 88 Side B 11/02/2016 10:58:58 Seven months later, in accordance with the Digital Single Market proposal timeline, the European Commission issued its December 2015 Proposal addressing the geo-blocking issue.158 This proposal went further than the May 2015 Proposal and for the first time spe-

148. See Single Market for Intellectual Property Rights, supra note 12, at 11; see also R Hugenholtz, supra note 54, at 291 (discussing the 2011 Proposal as relates to copyright R harmonization). 149. See infra notes 150–152 and accompanying text. R 150. See Cheng, supra note 146. R 151. See id.; Slivka, supra note 2. R 152. See European Commission Press Release IP/12/772, supra note 147. R 153. See Digital Single Market Strategy, supra note 16, § 2.3. R 154. Id. 155. See id. 156. See supra Part I.C.2. 157. See Digital Single Market Strategy, supra note 16, § 2.3. R 158. See Cross-Border Portability, supra note 34, at 1. R 38291-jle_49-1 Sheet No. 89 Side A 11/02/2016 10:58:58

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cifically addressed geo-blocking as a result of territorial copyright.159 In the December 2015 Proposal, the European Commission specifically addressed the issue of “cross-border portability,” which it defined as access to digital content that E.U. consumers purchased in their country of residence and to which they want continued access while traveling in other E.U. Member States.160 The December 2015 Proposal therefore only affected a particular subset of E.U. consumers: those who travel across borders of E.U. Member States (for an extended stay) with their portable devices and are denied access to content they have already purchased in their country of origin.161 Indeed, as travel between E.U. Member States has become easier and more frequent, copyright territoriality had also become increasingly problematic for E.U. consumers.162 However, the December 2015 Proposal failed to address the expectations of E.U. consumers who continue to expect cross-border access from their country of origin; it instead stressed the importance of anti-piracy measures.163 The December 2015 Proposal included no amendments to any E.U. copyright laws or treaties.164 The European Commission accordingly stated that “the proposal will have a limited impact on copyright [law].”165 Instead, the proposal would require right holders to treat traveling consumers as if they were within the borders of their country of origin.166 This proposal would require these consumers to log into their digital content while abroad, and would limit for how long a login from a different territory remained valid, to prevent abuse.167 This limited login time means

that the December 2015 Proposal does not apply to frequent visi- 38291-jle_49-1 Sheet No. 89 Side A 11/02/2016 10:58:58 tors or commuters.168 Preventing abuse was at the forefront of the December 2015 Pro- posal; the proposal was accompanied by a communication that specifically addressed piracy concerns.169 Entitled Towards a Modern, More European Copyright Framework, the communication suggested new enforcement methods against intermediaries promoting

159. See id. at 2. 160. See id. 161. See Cross-Border Portability: Impact Assessment, supra note 9, at 59. R 162. See Cross-Border Portability, supra note 34, at 2. R 163. See Copyright Framework, supra note 24, at 4. R 164. See Cross-Border Portability, supra note 34, at 7. R 165. Id. 166. See id. 167. See id. 168. See id. 169. See generally Copyright Framework, supra note 24. R 38291-jle_49-1 Sheet No. 89 Side B 11/02/2016 10:58:58

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piracy and cybertravel.170 The European Commission proposed a “follow-the-money” approach that targets companies and individu- als aggregating illegal content online.171 While targeting individu- als engaging in digital piracy can be difficult, if not impossible, due to proxy use and other methods of disguising location and identity, intermediaries who charge for services that facilitate piracy are much easier to track.172 The European Commission therefore proposed an increase in targeting and more aggressive enforcement against these intermediaries.173 The European Commission expressed concern that “in an inherently borderless Internet” people do not understand territorial copyright and indicated that these new, more aggressive methods of enforcement against intermediaries are necessary to protect the rights of copyright holders.174 The December 2015 Proposal is the closest that the European Commission has come to directly addressing geo-blocking and territorial copyright concerns, but it stops short of solving these problems. The proposal does, however, indicate that copyright- related geo-blocking is a growing concern for the European Com- mission and it even references efforts to harmonize E.U. copyright law as a proposed solution to the geo-blocking issue.175 One such effort mentioned by the European Commission is the Wittem Pro- ject, a joint effort by legal scholars to draft a pan-European copyright code, completed in 2010.176 The Wittem Project Group hoped that its drafted code might serve as a model or reference for a future harmonization of E.U. copyright law.177 As geo-blocking

becomes increasingly problematic for right holders and consum- 38291-jle_49-1 Sheet No. 89 Side B 11/02/2016 10:58:58 ers, a complete harmonization of E.U. copyright may emerge as the solution. This Note advocates for precisely this solution in Part II.

170. See id. at 10–11. 171. See id. at 11. 172. See id. 173. See id. 174. Id. at 4. 175. See Cross-Border Portability: Impact Assessment, supra note 9, at 55 (“Some end users/ R consumers call for a ‘common copyright’ in Europe . . . . These users believe that a single copyright title would do away with territorial restrictions and allow for content to be freely accessed . . . .”). 176. See EUROPEAN COPYRIGHT CODE (Apr. 26, 2010), http://www.copyrightcode.eu/ [https://perma.cc/H9EU-SX9S]. 177. Id. 38291-jle_49-1 Sheet No. 90 Side A 11/02/2016 10:58:58

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II. ANALYSIS This Part articulates the reasons why the European Commission should take a strong stance against copyright-related geo-blocking and proposes a regulation that fully harmonizes the E.U. copyright code and implements a pan-E.U. copyright licensing requirement. It first addresses the shortcomings of the European Commission’s previous attempts to solve the problems created by copyright- related geo-blocking. Then, it explains how the proposed regulation would eliminate copyright-related geo-blocking, benefiting both consumers and right holders in the E.U. digital market.

A. The Current Regime’s Failure to Solve the Problem of Geo-Blocking The European Commission has expressly identified geo-blocking as an impediment to the growth of the digital market.178 Despite this stance, the European Commission has only engaged in a piecemeal approach to the problem of geo-blocking. It began by con- demning contractual geo-blocking practices as anticompetitive in the 2010 Guidelines on Vertical Restraints, a condemnation reinforced by the ECJ’s findings in Murphy.179 Once again, in its May 2015 Proposal, the European Commission condemned anticompetitive contractual geo-blocking practices.180 Seven months later, the European Commission addressed copyright-related geo-blocking, proposing a cross-border portability mandate.181 The December 2015 Proposal purports to solve the problem of copyright-related geo-blocking, but this proposal

merely fixes a small part of a larger problem, because the cross- 38291-jle_49-1 Sheet No. 90 Side A 11/02/2016 10:58:58 border portability mandate only affects consumers traveling with their portable devices.182 Instead of attempting to solve the problem of consumer expectations entirely by making all digital content available across borders, the European Commission once again chose to address more narrow concerns. Although the May 2015 and December 2015 Proposals were designed to limit geo-blocking in the E.U. digital market, neither went far enough to remedy the fragmentation of the digital market

178. See supra text accompanying note 153 (indicating that the European Commission R has named geo-blocking as an obstacle to the E.U. digital market). 179. See supra Part I.C.3. 180. See id. 181. See supra text accompanying notes 158, 160 (introducing the December 2015 Pro- R posal and its cross border portability mandate). 182. See supra text accompanying note 161 (noting that the December 2015 Proposal R only affected consumers traveling abroad with their portable devices). 38291-jle_49-1 Sheet No. 90 Side B 11/02/2016 10:58:58

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that has resulted from this practice. Territorial copyright has led to extensive fragmentation of the digital market across territorial borders as well as an increase in cybertravel and Internet piracy due to evolving consumer expectations.183 In the Internet age, consumers feel entitled to a borderless Internet and unrestricted, cross-border availability of digital content, and are willing to access illegally what is not available legally.184 Yet studies suggest that these consumers are, in fact, willing to pay for copyrighted content if it is made available to them.185 The European Commission’s series of piecemeal solutions has not gone far enough to match consumer expectations and return lost profits to right holders. To completely solve the geo-blocking problem in the European Union, the European Commission should propose a complete harmonization of the E.U. copyright code and a pan-E.U. licensing requirement.

B. Ending Copyright Territoriality Within the European Union: Proposing a Universal E.U. Copyright Code and a Pan-E.U. Licensing Requirement To solve the problem of geo-blocking, the European Commis- sion should propose a regulation that fully harmonizes the E.U. copyright code and implements a pan-E.U. copyright licensing requirement. This proposal would be a much stronger and more effective stance against copyright-related geo-blocking than the May 2015 and December 2015 Proposals. Coupled with a pan-E.U. licensing requirement, a universal E.U. copyright code would put an end to nearly all geo-blocking prac- 38291-jle_49-1 Sheet No. 90 Side B 11/02/2016 10:58:58 tices in the European Union.186 An end to geo-blocking would result in increased profits for E.U. right holders and licensees due to the increase in accessibility to consumers and corresponding decrease in geo-blocking-related Internet piracy.187 The European Commission could propose a regulation implementing such a requirement because of its authority under Article

183. See supra Part I.B.2 (discussing consumer expectations of borderless access to digital content and its link to digital piracy). 184. See id. 185. See supra text accompanying note 84 (indicating that studies suggest a consumer R willingness to pay for legally available content). 186. One exception is geo-blocking in strictly regulated industries such as gambling. See supra note 37 (noting that geo-blocking is also practiced for non-copyright-related pur- R poses, but that this is outside the scope of this Note). 187. See supra Part I.B.2 (discussing how geo-blocking has been met with a corresponding increase in digital piracy which has led to lost profits for right holders). 38291-jle_49-1 Sheet No. 91 Side A 11/02/2016 10:58:58

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118 of the TFEU to propose legislation providing uniform copyright protection across E.U. Member States,188 as well as under Article 114 of the TFEU to adopt measures for “the establishment and function of the internal market.”189 The unification of E.U. copyright law would undoubtedly improve the function and establishment of the E.U. digital market by increasing consumer access to digital products across the European Union. Indeed, the Euro- pean Commission identified copyright law as an important element of its May 2015 Proposal to improve the E.U. digital market.190

1. A Regulation Is Preferable to a Directive Because Regulations Are Immediately and Uniformly Applicable. The European Commission has the authority to either propose a directive or a regulation to the European Council and Parlia- ment.191 To successfully end all copyright-related geo-blocking practices in the European Union, the European Commission should propose a regulation, rather than a directive. Once adopted by the European Council and Parliament, a regulation takes direct effect in all Member States.192 It is akin to a federal law, and therefore cannot be modified at the discretion of a Member State.193 Therefore, a regulation, once adopted, must be uniformly applied across all Member States.194 A directive is not subject to the same strict rules of application, and can be implemented in the national law of a Member State however the local government chooses.195 38291-jle_49-1 Sheet No. 91 Side A 11/02/2016 10:58:58

188. See supra text accompanying notes 107–108 (indicating that Article 118 of the R TFEU grants the European Commission explicit authority to propose legislation harmonizing E.U. copyright law and licensing). 189. Cross-Border Portability, supra note 35, at 2. R 190. See supra text accompanying note 127 (indicating that the European Commission R identified copyright law as an important element of its digital market strategy in its May 2015 Proposal). 191. See supra text accompanying note 98 (indicating that the European Commission R has the authority to propose regulations and directives to the European Council and Par- liament); supra note 28 (indicating that the European Commission has the right of initia- R tive and that no other body may put forth draft legislation). 192. See supra note 97 (indicating that a regulation is directly applicable to all Member R States after adoption). 193. See id. (indicating that a regulation is similar to a federal law and applied uniformly). 194. See id. (indicating that a regulation allows for uniform application across all Mem- ber States). 195. See supra note 96 (indicating that Member States have broad discretion in imple- R menting directives). 38291-jle_49-1 Sheet No. 91 Side B 11/02/2016 10:58:58

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As discussed in Section B.2 below, the benefit to implementing a universal E.U. copyright code is uniform application. A directive for a common copyright code would likely make the local laws of Member States more similar to each other, but would not achieve the desired uniformity possible under a regulation. Additionally, once a regulation is adopted by the European Council and Parliament, it takes immediate effect.196 A directive, unlike a regulation, is subject to a long process of consultation between the European Parliament, the European Council, the Member States, and the European Commission.197 This is followed by another period of implementation in which Member States inte- grate the directive into their national laws.198 The entire process for the implementation of a directive generally takes between five and ten years.199 The expansion of the digital market is occurring at a rapid pace, and thus geo-blocking is an extremely time-sensitive issue.200 By the time a directive could be implemented, E.U. right holders may irreversibly fall behind their competitors abroad who do not have to contend with the challenges of the E.U. copyright regime.201 Critics of a universal copyright code may doubt that the Euro- pean Parliament and Council will adopt such a proposed regulation. However, the growing concern and political reaction to the downsides of geo-blocking suggest a recent increase in political will to directly address the problem.202 Moreover, with the addition of Article 118 to the TFEU, it has become far easier for such a proposal to be adopted.203 The adoption of a regulation generally requires unanimous votes in both the European Council and Par- 38291-jle_49-1 Sheet No. 91 Side B 11/02/2016 10:58:58 liament.204 However, article 118 requires only a qualified major-

196. See supra note 97 (indicating that a regulation takes immediate effect in all Mem- R ber States upon adoption). 197. See supra note 96 (noting that a directive is subject to a consultation process). R 198. See id. (noting that a directive undergoes implementation at the national level). 199. See id. (indicating that the process of consultation and implementation takes between five and ten years). 200. See supra note 41 (discussing the rapid increase in digital commerce and con- R sumer spending on digital content). 201. See supra text accompanying note 54 (noting that territorial copyright concerns R have already placed E.U. businesses at a competitive disadvantage). 202. See supra text accompanying note 129 (noting the increasing concern of the ECJ R and the European Commission about the problems presented by geo-blocking). 203. See in supra text accompanying note 110 (noting that Article 118 of the TFEU has R made adoption of a regulation regarding E.U. copyright harmonization easier). 204. See supra text accompanying note 111 (indicating that a regulation generally R requires a unanimous vote to be adopted). 38291-jle_49-1 Sheet No. 92 Side A 11/02/2016 10:58:58

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ity.205 Not only does Article 118 increase the statistical likelihood of adoption, but the addition of Article 118 itself may also be evidence of a recent increase in political will to address geo-blocking and related copyright concerns in the European Union.

2. The Proposed Regulation Should Fully Harmonize the E.U. Copyright Code. To end copyright territoriality and the resulting geo-blocking practices, the European Commission should propose a regulation creating a fully harmonized E.U. copyright code. The European Commission could make use of existing models such as the Wittem Project’s universal E.U. copyright code to craft this universal legal framework.206 The European Commission has the authority to propose this harmonization of E.U. copyright laws under Article 118 of the TFEU.207 Its December 2015 Proposal acknowledges this authority and contemplates that a harmonization of the E.U. copyright framework could benefit the goal of a single digital market.208 A common E.U. copyright code would benefit the digital market, giving right holders and licensees the same rights in each Member State, such as rights to copyright enforcement and distribution of copyrighted content. Under the current regime, the differences in local copyright laws have made it extremely difficult and administratively burdensome to distribute copyrighted content across borders.209 Under a fully harmonized copyright code, this would no longer be the case. Right holders would only be subject to one

system of laws across all E.U. Member States. 38291-jle_49-1 Sheet No. 92 Side A 11/02/2016 10:58:58 Critics of copyright harmonization argue that the selectivity of territorial copyright laws allows right holders to avoid territories with a historically high level of copyright infringement and a lower level of copyright enforcement.210 However, a common copyright code would by definition mandate the same level of enforcement

205. See supra text accompanying note 112 (indicating that a regulation under Article R 118 of the TFEU requires a qualified majority to be adopted). 206. See supra text accompanying note 176 (introducing the Wittem Project as a model R of a common E.U. copyright code). 207. See supra text accompanying note 108 (indicating that the European Commission R was granted authority to harmonize E.U. copyright under Article 118 of the TFEU). 208. See supra note 175 (noting that the December 2015 Proposal considered the R potential benefits gained from a harmonization of E.U. copyright law). 209. See supra text accompanying note 56 (noting that navigating a system of different R local copyright laws in the European Union is difficult and administratively burdensome). 210. See supra text accompanying note 49 (indicating that in a territorial licensing R scheme, entities selectively acquire licenses on a per-country basis). 38291-jle_49-1 Sheet No. 92 Side B 11/02/2016 10:58:58

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across all Member States, thus giving right holders similar safe- guards without a need for territorial selectiveness. Alone, a fully harmonized E.U. copyright code, while beneficial to right holders, would not put an end to copyright-related geo- blocking, because an entity would still need to hold territorial licenses. The European Commission proposal should therefore also include a pan-E.U. licensing requirement, as discussed in the following Section.

3. The Proposed Regulation Should Include a Pan-E.U. Copyright Licensing Requirement. The European Commission should propose a regulation creating a pan-E.U. copyright licensing requirement in addition to a fully harmonized E.U. copyright code. With a pan-E.U. licensing requirement, entities would only have to purchase one license for all Member States. As content providers would no longer be required to take the time consuming and cost prohibitive step of individually purchasing licenses to increase accessibility to their copyrighted content, such content could be immediately available to all E.U. consumers.211 These consumers could therefore legally purchase any digital content available in the European Union, regardless of their physical location. This would lead to a decrease in digital piracy across the European Union and a corresponding increase in right holder profits.212 The problem presented by a pan-E.U. licensing requirement is that there are many existing parallel licenses throughout the Euro- pean Union.213 Some scholars have interpreted Article 118 of the 38291-jle_49-1 Sheet No. 92 Side B 11/02/2016 10:58:58 TFEU as permitting the complete abolishment of all preexisting territorial licenses by the European Commission.214 Under this interpretation, all right holders would have to reapply for the new, pan-E.U. license. This solution, while effective, would likely be highly unpopular amongst current right holders and licensees. A more likely solution would be a forced renegotiation of all pri- vate licensing contracts to accommodate the pan-E.U. licensing

211. See supra text accompanying notes 48–53 (discussing the difficulties and costs asso- R ciated with acquisition of territorial copyright licenses). 212. See supra text accompanying note 71 (noting the correlation between availability R of digital content, digital piracy, and right holder profits). 213. See supra text accompanying note 62 (indicating that parallel licenses are common R among E.U. businesses). 214. See supra text accompanying note 109 (noting that Article 118 has been inter- R preted to permit the abolishment of national copyright licenses alongside the creation of a pan-E.U. licensing scheme). 38291-jle_49-1 Sheet No. 93 Side A 11/02/2016 10:58:58

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requirement, as many parallel licenses have developed contractually.215 Critics claim that this solution will cause smaller companies to lose access to content or lose exclusive deals in their countries.216 However, the ECJ already found these types of exclusive national arrangements to be a violation of Articles 101 and 56 of the TFEU in Murphy.217 Furthermore, a pan-E.U. licensing mandate could potentially result in a language split between companies, rather than a territorial split.218 The companies that previously held national licenses could renegotiate contracts to acquire licenses for content in nation-specific languages. For example, a French film distribution company that currently holds territorial licenses to certain films can only distribute those films in France. With a pan-E.U. licensing scheme, the same company would likely choose to purchase the pan-E.U. rights to the French language version of a film; this version could then be distributed online to any E.U. consumer through a single website. A German film distribution company could easily own the rights to that same film in German and distribute it online to all E.U. consumers. The consumer could access both the French and German films and would choose to purchase the version in his native language. This distribution of licenses is preferable because it would not limit the accessibility of content to E.U. consumers, and it would not trigger the same discrimination problems that occur under copyright-related geo-blocking.219

CONCLUSION 38291-jle_49-1 Sheet No. 93 Side A 11/02/2016 10:58:58 With the rapid expansion of Internet access and growing expansion of digital commerce, territorial copyright is an anachronism that stifles the E.U. digital market. While geo-blocking has emerged as a solution to the problem of territorial copyright in the digital market, it should not be the permanent solution. Geo-

215. See supra text accompanying notes 57–61 (discussing parallel licensing and con- R tractually limited licensing). 216. See Scott Roxborough & Andrew Flanagan, Europe to Unveil Plans to Reform Copy- right, Introduce Digital Single Market, BILLBOARD (Dec. 9, 2015), http://www.billboard.com/ articles/business/6803916/europe-unveils-copyright-reform-digital-single-market [https:// perma.cc/4GL6-DTXZ]. 217. See supra text accompanying note 138 (noting that the ECJ in Murphy found geo- R blocking to be an impermissible violation of Articles 101 and 56 of the TFEU). 218. See supra note 138 (indicating that the ECJ has considered a linguistic licensing R scheme to be a permissible alternative under the TFEU to a territorial licensing scheme). 219. See supra note 26 (noting that geo-blocking between territorial boundaries dis- R criminates against immigrants and linguistic minorities). 38291-jle_49-1 Sheet No. 93 Side B 11/02/2016 10:58:58

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blocking has been condemned as an anticompetitive tool,220 and copyright-related geo-blocking has led to an increase in Internet piracy and lost profits to right holders.221 Consumers expect a borderless Internet with unlimited access to digital content, and while they would be willing to pay for content if it were available to them, they are equally likely to engage in Internet piracy if it is not.222 Geo-blocking is of particular concern in the European Union, where twenty-eight Member States correspond to twenty- eight borders to consumer access to digital content. No amount of geo-blocking or anti-piracy measures will turn these consumers into paying customers, but a universal E.U. copyright code and pan-E.U. licensing scheme could. Not only would a universal E.U. copyright code discourage piracy, it would also facilitate cross-border commerce in the digital market and would bring down the barriers and fragmentation that has stifled the progress of the E.U. digital market to date. A universal E.U. copyright would be a significant step toward creating a true single digital market. The European Commission has the authority under the TFEU to propose a regulation mandating a universal E.U. copyright code and a pan-E.U. licensing scheme, and it should implement these measures to end the problem of territorial copyright in the digital market.223 If this regulation were adopted, the promise of borderless access to digital content would finally be fully realized. iTunes users across the European Union would find their regional accounts merged into one truly “European” online music store. Without barriers to access between Member States, a French con- 38291-jle_49-1 Sheet No. 93 Side B 11/02/2016 10:58:58 sumer could legally purchase on iTunes a song by his favorite Ger- man singer, instead of encountering a notice that this content is not available, and then downloading it for free on BitTorrent instead. Under this new, harmonized regime, the German singer would receive royalties instead of lamenting about the increasing rates of digital piracy. The problems caused by geo-blocking would be completely eliminated.

220. See supra Part I.C.3. 221. See supra Part I.B.2. 222. See supra text accompanying notes 84–89 (discussing consumer willingness to R purchase digital content when it is legally available and willingness to engage in digital piracy when it is not). 223. See supra text accompanying notes 105–109 (indicating that the European Com- R mission has authority under the TFEU to propose legislation harmonizing E.U. copyright law and licensing). 38291-jle_49-1 Sheet No. 94 Side A 11/02/2016 10:58:58

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A territorial copyright regime in the European Union is simply no longer sustainable, as evidenced by the problems that have already emerged in the past decade. As technology develops and digital commerce continues to grow in prominence, the problems caused by territorial copyright and geo-blocking will only grow. It is time for the European Commission to take a strong stance against geo-blocking and eliminate this anachronistic regime to create a true single digital market in the European Union. 38291-jle_49-1 Sheet No. 94 Side A 11/02/2016 10:58:58