E-commerce easier in EU with new geo-blocking regulations
As from Monday buyers will not have to worry about a website blocking or re-routing them just because they, or their credit card, come from a different country. Wherever they are in the EU, they will be able to access goods and services online.
A new regulation proposed by the European Commission in May 2016 to end unjustified “geoblocking” online will enter into force on 3 December. Geoblocking has been preventing consumers from using the internet in one Member State to buy from a website in another Member State.
Frequently traders refused to sell to customers from another EU Member State or to offer equally advantageous prices in comparison with local clients.
Geo-blocking is an important focus area of both the European Commission’s E-commerce competition law sector enquiry and the Commission’s Digital Single Market strategy. The aim of the latter is to remove barriers to online trade within the EU and so to strengthen the single market. Geo-blocking refers to practices used by online sellers that result in the denial of access to websites from other Member States. It also includes cases where access to a website is granted but customers are automatically redirected to another website. Under the Geo-blocking Regulation (EU) 2018/302, geo-discrimination will, in addition to geo-blocking, also be prohibited.
This regulation does not apply to purely internal transactions within a country, i.e. where all the relevant elements of a transaction are fulfilled within a single Member State.
The Regulation targets unilateral behavior of companies that is in some way discriminatory on the basis of where a person is from, where they live or where a business is established.
The rules of the regulation apply in principle to both B2C and to B2B transactions, to the extent that the latter take place on the basis of general conditions of access and the transaction is for the sole purpose of end use, hence made without the intention to re-sell, transform, process, rent or subcontract.
The regulation is broad and there are few carve-outs except for where required by law. There are certain further exceptions, including transport services, audio-visual services, gambling activities and healthcare services.
Member States are in charge of the enforcement of the Regulation and need to put in place the necessary structures to ensure a smooth start to its application. In particular, Member States must designate bodies entrusted with its enforcement and bodies which will provide practical assistance to consumers. In addition, Member States must set out effective, proportionate and dissuasive measures applicable to infringements of the Regulation.
The Commission will conduct a first review of the Geo-blocking Regulation by March 2020. This assessment will cover the possible extension of the non-discrimination principle in accessing goods and services to non-audiovisual electronically supplied services whose main feature is copyright protected content, such as e-books, music, games and software.
The Commission will also carefully analyse whether in other sectors, such as services in the field of transport and audio-visual services, any remaining unjustified restrictions based on nationality, place of residence or place of establishment should be eliminated.