Competition law perspective on geo-blocking in non-licensed territory

Abstract

The article discusses whether imposition of a geo-blocking restriction by copyright owners in licensing agreements unduly restricts competition between online content distributors in non-licensed territory, especially in cases where dissemination of digital content is already precluded by copyright law. The article starts with a discussion of geo-blocking from the perspective of policy clashes ‒ that is, clashes between fundamental freedom, competition law and copyright law ‒ it then turns to competition law analysis of absolute territorial protection, that is, restrictions of active and passive sales. The article further distinguishes online content distribution from distribution of tangible goods by reference to CJEU case law before moving on to discuss the distinctive nature of digital content distribution and the inapplicability of the exhaustion of rights principle. Furthermore, discussion of the restriction on competition in non-licensed territories for online content distributors leads to the conclusion, with a finding that geo-blocking does not restrict competition in non-licensed territories, except in cases where copyright protection is used to facilitate absolute territorial protection or where the copyright owner exploits the market by extracting the highest possible remuneration due to market segregation.