The European Parliament, the Council and Commission recently reached an agreement[1] on the contents of a Regulation[2] to end unjustified geo-blocking.

Geo-blocking is generic term covering purchase restrictions frequently imposed by online retailers to consumers based on their nationality or place of residence. Typical examples are:

• Blocking access to websites operated in another country and automatic re-routing to the company’s website in the country where the consumer resides;
• Denying the possibility to complete an order or to purchase goods when accessing a website from abroad;
• Denying across border delivery or shipment;
• Applying different prices and sales conditions depending on nationality, place of residence or place of establishment of the customer

The relevant European institutions consider geo-blocking as unjustified when it discriminates between customers in the EU and is based on the whe desire to segment markets along national borders, in order to increase profits to the detriment of foreign customers.

The draft Regulation bans the blocking of access to websites and the use of automatic re-routing if the customer has not given prior consent to do so.

The draft Regulation also provides for non-discrimination in payments. Whatever means of payment are offered by the online selling company, discrimination within such payment means is prohibited.

Whereas there often are well justified reasons for online traders not to become involved in cross-border selling, the draft Regulation does not create any obligation to do so nor does it harmonise prices, shipping costs etc.

The new rules will enter into force nine months after the date of publication in the EU Official Journal, so as to give small traders sufficient time to prepare and adapt.  

For more information, please contact our partner Jaap van Till.

[1] http://europa.eu/rapid/press-release_IP-17-4781_en.htm

[2] http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52016PC0289