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Netflix recently announced it was tripling its global reach for video-on-demand. As part of this announcement at the Consumer Electronics Show in Las Vegas, the Internet streaming giant said it would block users from accessing media libraries from other countries. This move would include blocking Australians legally paying for U.S. Netflix accounts. Unsurprisingly, Australians voiced their outrage over Netflix’s decision to punish them for paying for content. Do paying Australian customers have any legal recourse? Can Netflix enforce geolocation restrictions in overseas jurisdictions?

Breaking Bad and Enforcing Restrictions

Complex licensing restrictions mean that not all Netflix users are equal. The U.S. version of Netflix has a far more expansive range of television shows and movies. Many Australians choose to access the U.S. version of Netflix and pay a premium for a VPN provider to have the same level of access as their U.S. viewers. Currently, hundreds of thousands of Australians use VPN technology, proxy servers or smart DNS services to bypass geolocation restrictions. With the latest announcement, Netflix customers trying to view content from another country will be shown an error message advising them to turn off their VPN or unblocker service.

Netflix’s Terms of Use clearly state that its customers can only view content within the country in which the account was established. The Terms of Use also states that the company may cancel accounts if customers violate any rules, including the geographic viewing restrictions. Netflix is well within its rights to enforce licensing restrictions. While VPN bypassing has long been against Netflix’s Terms of Use, the latest crackdown may be part of a bigger move to appease investors and media production companies and send a clear message that it is taking licensing restrictions seriously.

(Arrested) Developments in Legalities of VPNs

The Australian Copyright Council have stated that using a VPN is considered copyright infringement if it requires downloading or streaming of media without the permission of the copyright owner. Meanwhile, the Copyright Act 1968 (Cth) (the Act) does not restrict the use of a VPN to access content and media from overseas jurisdictions. The responsibility lies with streaming providers to enforce their licensing terms to protect copyright in respective countries. Section 10 of the Act does make it illegal to access content that has “technological protection measures”. However, it does not make illegal the use of VPNs. In fact, many security firms have encouraged Internet users to adopt VPNs to protect their privacy online.

In 2015, the Federal Government introduced the Copyright Amendment (Online Infringement) Act 2015 (Cth) to combat online copyright infringement. The Act came into effect 26 June 2015 and provides copyright holders the tools to enforce copyright by blocking websites that facilitate the infringement of copyright. Copyright owners, such as movie studios and TV production companies, can now apply for a federal court order requiring ISPs to block overseas sites. While the Act is one step towards tackling online piracy, users will always be able to circumvent geolocation restrictions. Ultimately, the most effective solution in tackling piracy is improving global access to the same content.

What do you think? Tag us on Twitter @legalvision_au and let us know or get in touch with our intellectual property lawyers.

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