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Geo-blocking in the digital single market

Geo-blocking is a discriminatory practice that is wide-spread in EU. It prevents online customers from accessing and purchasing products or services f



Session 1

Session 2


Session I: Geo-blocking in non-audiovisual services

In his introductory presentation, Bertin Martens presented the current European situation of non-audiovisual services with respect to different characteristics:

  • Cross-border accessibility: Most services are blocked to cross-border access but circumvention is often (easily) possible. Geo-blocking is thus mainly a tool of price discrimination rather than copyright enforcement.
  • Availability: Catalogues are very similar in all member states (80 to 95% similarity). Marine Elgrichi confirmed a similarity of 99% for Spotify in Europe.
  • Pricing: While price differences of games are small and mainly due to currency conversions, prices of e-books, and music downloads may vary substantially (up to 25%) and are caused by differences in income and popularity.

The consequences of lifting geo-blocking were debated controversially. Regarding availability, Bertin Martents expected no mayor change. Marine Elgrichi supported this claim and argued that it would only cause an unnecessary disruption of the current licensing models. Fabian Paagman even warned of a shrinking choice: small e-book shops could be overburden by new requirements and would have to close. Agustin Reyna disagreed and criticised the exclusion of non-audiovisual services as not favouring consumers that cannot enjoy the full set of content and providers.

Regarding prices, Bertin Martents reasoned that lifting geo-blocking could lead to lower prices for consumers. However, Marine Elgrichi forecasted higher prices for music streaming in lower-income countries.

As content sellers might face lower revenues, Bertin Martents concluded that overall welfare effects remain ambiguous. Policy makers have to weigh the unclear economic outcomes against the Single Market Principle: abstaining from that principle this time could lead to other exemptions in the future. Roza von Thun argued that the fragmented European digital market is not adequate for the current times. For a (culturally) closer Europe, a unified Digital Single Market is necessary. Content sellers should see the Digital Single Market as an opportunity for new business models rather than a threat.

Session II: Geo-blocking in audiovisual services

J. Scott Marcus opened the session by presenting a recent Bruegel’s study on geo-blocking. While demand for copyrighted audiovisual content is growing in Europe, 70% of that content keeps to be blocked. Thus there exists a total of EUR 0.2 – 1.0 billion of unfulfilled demand due to geo-blocking. Agustin Reyna emphasized that customers suffer from geo-blocking especially in the audiovisual sector. Furthermore, he claimed that parts of content piracy could be avoided by lifting geo-blocking. However, this claim was doubted by a response from the audience recalling the dominance of US-blockbusters in piracy.

In contrast, several arguments were brought in favour of geo-blocking. J. Scott Marcus recalled that the current business models of producing expensive audiovisual content rely on territoriality and windowing which are crucial to generate predictable returns. Gareth Shierm, citing a recent Oxera study, went even further: lifting geo-blocking could lead to a decrease in consumer choice and consumer welfare losses of about EUR 9.3 billion. Especially consumers in lower-income would suffer the most as their prices would increase while their choice erode. Nationally operating platforms would have difficulties to fund local productions as a result of consumers switching to European competitors and would face relativity higher prices to acquire international productions.

Werner Stengg highlighted the difficulties when drafting a policy on geo-blocking. In addition to poor data quality and ambiguous forecasts, some decisions do not have a clear-cut answer: is a legitimate to allow lower prices and an extended choice for many in expense for the opposite for a few costumers?

As a solution, J. Scott Marcus proposed a limited prohibition: in the beginning, only free-to-air films should be exempted from geo-blocking to limit possible revenue losses for content production. In addition, the policy should only apply to Transactional Video on Demand (TVoD) and not Subscription Video on Demand (SVoD).

Event notes by Alexander Roth (Research Intern).




 Presentation by Scott Marcus

Presentation by Gareth Shier