E-commerce – Image by Varun
(BRUSSELS) – The EU gave the final green light Tuesday to a ban on unjustified geo-blocking, a discriminatory practice that stops online customers buying products from a website based in another member state.
The new law removes barriers to e-commerce by outlawing discrimination based on customers’ nationality, place of residence or place of establishment.
Bulgarian minister Lilyana Pavlova welcomed the final go-ahead for the regulation, saying: “The end of geo-blocking means wider choice and consequently better deals for consumers and more opportunities for businesses.”
The main features of the regulation are:
- The new rules prevent discrimination for consumers and companies on access to prices, sales or payment conditions when buying products and services in another EU country.
It should be noted that services where the main feature is provision of access to and use of copyright protected content, or the selling of copyright protected works in an intangible form, such as music streaming services, e-books, online games and software, are excluded from the scope of the regulation. This is subject to a review by the Commission.
Other services such as financial, audio-visual, transport, healthcare and social services are also excluded, in line with the Services Directive.
- Traders will not be able to discriminate between customers with regard to the general terms and conditions including prices in three cases. These are where the trader:
- sells goods that are delivered in a member state to which the trader offers delivery or are collected at a location agreed upon with the customer;
- provides electronically supplied services such as cloud services, data warehousing services, website hosting and the provision of firewalls;
- provides services which are received by the customer in the country where the trader operates, such as hotel accommodation, sports events, car rental, or entry tickets to music festivals or leisure parks.
Unlike price discrimination, price differentiation will not be prohibited, so traders are free to offer different general conditions, including prices, and to target certain groups of customers in specific territories.
Neither will traders be obliged to deliver goods to customers outside the member state to which they offer delivery.
Unjustified discrimination of customers in relation to payment methods will be forbidden. Therefore traders will not be allowed to apply different payment conditions for customers for reasons of nationality, place of residence or place of establishment.
- Traders will not be allowed to block or limit customers’ access to their online interface for reasons of nationality or place of residence.
A clear explanation will have to be provided if a trader blocks or limits access or redirects customers to a different version of the online interface.
- As a general rule, the new regulation will prevail in cases of conflict with competition law. But the right of suppliers to impose active sales restrictions will not be affected.
EU competition law distinguishes between passive sales (when sales are made in response to unsolicited orders) and active sales (when retailers are actively targeting customers). Passive sales restrictions are generally considered as an infringement to competition law whilst active sales restrictions are a common practise which stems from commercial freedom.
- The Commission will carry out a first evaluation of the impact of the new rules on the internal market two years after their entry into force.
The evaluation will include a possible application of the new rules to certain electronically supplied services which offer copyrighted content such as downloadable music, e-books, software and online games.
The regulation, which will be published in the EU’s official journal before the end of March 2018, will take effect nine months after its publication.
Regulation banning unjustified geo-blocking to boost cross-border e-commerce in the internal market
