The Fragmentation of the Global Market: The Case of Digital Versatile Discs (DVDs)

Abstract

“Fragmentation” is a powerful phenomenon derived from human thinking, also finding expression in the context of the regulation of international trade under the World Trade Organization (WTO). In its most prominent manifestation, the regulation of the global market is fragmented across national borders. Unfortunately, even within the legal sphere, it is also still fragmented along the lines of distinction between public and private international law. However, as evidence of the growing complexity of our present societies, other forms of and new manifestation of such fragmentation emerge, which may restrict or nullify the benefits deriving from the liberalisation of and integration of global trade. One such new restriction to international trade is found in the so-called “Digital Versatile Disc Regional Coding System (DVD-RCS), which – for the purpose of the global distribution of films on DVDs – divides the world market in several different geographical regions to the effect that a movie stored on a DVD from one region cannot be watched on a hardware (i.e. computer or DVD player) manufactured in another region. Prima facie, the DVD-RCS appears to stand in stark contrast to the letter and spirit of the law governing international trade established under the WTO system. Moreover, it also appears to effectively obstruct related objectives concerning the preservation and promotion of cultural diversity by curbing the global circulation of cultural goods and services to the detriment of the exchange of culture and ultimately reducing the diversity of titles of cultural content offered. Hence, this article examines whether the DVD-RCS constitutes a so-called “unnecessary obstacle to international trade” or proves incompatible with objectives pursued by the agreements covered by the WTO.

Keywords: WTO, International Law, Cultural Diversity, Digital Versatile Discs (DVDs), DVD Regional Coding System (DVD-RCS), GATT, TBT Agreement, TRIPS

JEL Classification: K00, K20, K30, K33