The Digital Single Market Strategy: intended and unintended consequences of the reform for sport content

Speakers: Horvath Szabolcs, Dalton Daniel, McCharty Arlene
Moderator: Lichtenhein Mark

On Wednesday, 12th of May, at the premises of Science14 Atrium in Brussels, PubAffairs Bruxelles hosted a debate on the theme of The Digital Single Market Strategy: intended and unintended consequences of the reform for sport content. The debate was moderated by Mark Lichtenhein, Chairman of the Sports Rights Owners Coalition, while the discussants were Mr Szabolcs Horvath, Member of Commissioner Navracsics Cabinet, Mr Daniel Dalton MEP(ECR/UK), Mrs Arlene McCarthy OBE, former Chair of the European Parliament’s Internal Market and Consumer Protection Committee.

In the first part of the debate, Mr Lichtenhein introduced the speakers, presented the Sports Rights Owners Coalition and the main topics which the debate would touch upon. He then gave the floor to the discussants asking about their views on the recent launch of the Digital Single Market strategy by the European Commission.

Mr Horvath started his intervention both by premising that the launch of the new strategy was to be expected, as President Juncker included the digital agenda within the priorities for the new legislative period, and by pointing out that the Commission’s communication gives a comprehensive answer about the stakes of the proposed reform. He added that, given the current pivotal role of digital technologies, the digital single market strategy was compelled to go beyond a mere sectorial approach and now encompasses the whole spectrum of EU citizens’ daily activities. Mr Horvath explained that among the sixteen priorities indicated in the communication, the main actions which will impact on culture and sport-related content are the action on a better access to online content for consumers, the action about copyright reform, as well as the geoblocking issue, and the support to broadband infrastructure development which the communication proposes.

Mr Dalton began his intervention by premising that the current technological evolutions are creating new business models while impacting substantially the existing ones; this is for example shown by the recent developments in the music industry or in Uber or AirB&B cases. Hence, whatever legislation will come into force, there will be the need to recognise these technological changes. Mr Dalton stated that the years ahead are crucial as Europe will define its stances towards the digitalisation of businesses and society in general. With regard to sport content, Mr Dalton affirmed that the specificities of this domain in terms of cultural, societal and business added-values, shall be acknowledged and specified in the digital single market strategy.

Mrs McCarthy began her contribution by stating that there is an identified necessity of an EU-wide action, but such a EU-wide action shall take into account the national systems and their peculiarities; in her opinion an non-pragmatic approach to both the single market functioning and the final citizens’ benefits may mislead the genuine purposes of the digital single market reform. She concluded by stating that as EU institutions are often confronted with citizens’ scepticism on Europe’s legislation value added, a careful assessment on both the short and long term benefits of new legislation should be carried out by the Commission.

A second point of discussion consisted of the current practices, the opportunities and the benefits of the EU digital single market, with special regard to EU sport business models. Mr Horvath replied to this question by explaining that the Commission has to face the dilemma of reconciling national markets in sports and culture and increasing cross border access to content. He believed that following consultations with stakeholders the proposed reform strikes the right balance when it focuses on portability and cross border access to legally acquired content, while respecting the value of rights in the audiovisual sector. He continued by stating that the Commission recognises that sport content is territorial and does not want to overhaul the established copyright regime as well as the functioning business models in Europe. He also reminded the audience that the published communication is a strategy document and that concrete legislative proposals will be preceded by appropriate consultations and impact assessments. Mrs McCarthy replied to this question by affirming that the new wave of changes which digital technologies have put forward brings about the crucial matter of value transfer. The European Commission, while rightfully recognising that there is a need for more growth and jobs in Europe, should have also stressed the fact that much of the value transfer is currently not made primarily for the benefit of European companies. In addition, in her opinion, Europe is not yet at the stage of growing its own champions, while global companies are already well positioned as intermediaries of these new societal and business processes. She concluded by saying that the sport domain and its beneficial effect to society could be endangered by new legislation. Mr Dalton intervened on this issue by highlighting some examples of the EU sport industry which not only offers a good service for consumers in a given member state, but also offers access to content to other EU member states’ citizens. He added that this type of business models should be seen as an illustration of good practices and successful EU business models which benefit both right holders and consumers.

Another point of discussion consisted of the specificity of the sport domain and the possible means to protect it. Mr Dalton elaborated on the issues of geoblocking and portability of rights. He expressed his concerns regarding a pan-European broadcast license as, in his opinion, this would create a lose-lose situation for right holders and content consumers alike. He also expressed his concern about the fact that the digital single market strategy includes the issue of geoblocking, without specifying via which means this aim will be achieved while the portability of rights could be a fair solution, although it is still unclear how it will be established in the coming legislation. Mr Horvath stated that the European Commission is aware that the sport industry is one of the most successful sectors in Europe, and has cultural and societal importance. In his opinion, the EU institutions will take this fact into proper account while elaborating the upcoming legislative proposals. Mrs McCarthy intervened by referring to the football sector in the UK and its valuable spill over effects on communities’ welfare and local economic development. She reiterated her concerns on the fact that the proposed reform may downsize this and similar models, while reducing the benefits for EU citizens.

The final part of the debate and the Q&A session also covered the following issues: the question of the dominant players in the single market, the question of the efficacy of current regulatory tools, the issue of justified and unjustified geoblocking, the issue of freedom of contract, the question of evidence-based legislation, the issue of venture capitals in the EU, the broadcasting system in the EU and the pan-European license question, the matter of access to content in other parts of the world.

Do you want to go further into the issues discussed in our debate? Check our list of selected sources which we have provided for you

A Digital Single Market for Europe: Commission sets out 16 initiatives to make it happen

Digital single market: creating opportunities for European companies, European Parliament

From geo-blocking to cloud computing: Parliament’s guide to the digital age, European Parliament

Geo-blocking attacked from all sides, Euractiv

Copyright reform is where the Commissions go to die, Netopia

Be careful what you wish – Sport on the #DSM, Netopia

Oettinger hints at TV, film waivers in Digital Single Market, Screen daily

Cannes artists discuss copyright in Europe’s digital single market, Euronews

SROC, Sports Rights Owners Coalition, Papers and Consultations