Geo-blocking Vertical Agreements and EU Competition Law: With Particular Focus on Netflix's Movie License Agreements

Abstract

The practice of geo-blocking has received increased public and EU attention over the last couple of years. Many consumers occasionally experience the case of being geo-blocked, when they want to access a certain website, watch a certain movie on Netflix or watch a certain video on YouTube. Geo-blocking is the use of technologies to limit the accessibility of a website form certain areas.
The purpose of this master thesis is to investigate whether geo-blocking is a legal practice according to EU competition law, especially when it is part of vertical agreements between producers and distributors. In 2015 the EU Commission launched a strategy to create a digital single market in the EU without internal barriers. As part of the strategy it stated that the use of geo-blocking is a major reason why the digital single market is fragmentated. A fragmentation that cause a lot of frustration among consumers who expect to have access to all parts of the internet trade.
The legal part of this project contains an assessment of how EU regulate the use of geo-blocking. According to EU Competition Law, agreements that restrict cross-border sales and the competition between member states as its object or effect is incompatible with the single market. Therefore, the EU seeks to ban such agreements.
The economic part of this project contains an analysis of the effects of such agreements on the competition in a given market. It seeks to create an economic foundation and explanation of the EU regulation of geo-blocking. It’ll explain the economic welfare effects of vertical restraints, how transaction costs disturb welfare efficiencies, whether price discrimination is possible and what effects geo-blocking has on the before mentioned.
Finally, on the basis of the legal and economic analyses, the thesis takes a welfare-oriented approach in order to give the EU Commission and Court recommendations on how to deal with the two main problems with the current regulation.