EU misses the mark with Geoblocking decision

07 February 2018
by ESBA -- last modified 07 February 2018

On 6 of February the European Parliament Plenary approved the agreement on the geo-blocking regulation, reached in trilogue by the European Institutions 2017. ESBA welcomes any initiatives that intends to simplify operating within the Single Market for businesses and citizens. Unfortunately, the decision made yesterday has done the exact opposite for small businesses.

Small traders will now be forced to trade with all EU Member States, even if they do not wish to do so for very good reasons. We have tried to explain to the Institutions that, whilst this might be manageable for very large players and convenient for consumers, it is detrimental to micro companies. Growth and expansion for these companies happens organically and, though we can do our best to facilitate this, we must not force it. Many small online traders start selling locally, and then expand slowly, as their experience and knowledge grows and their turnover increases, so they can carry the cost of this gradual expansion.

It seems as though the EU, in the context of this file, has been working in reverse order. Rather than setting the right framework conditions first (simpler VAT systems, safer contract rules, better cross-border parcel delivery, less legal uncertainty, to name a few), businesses are thrown in the deep end of very choppy waters. Half measures, such as the 'you have to sell but you don't need to deliver' trick clearly do not offer real solutions. Here the problems begin when a dispute between the seller and buyer arises. The institutions claim in the recitals that they will address those barriers in the near future, which for some of our members will be too little too late.

Now that the damage is done, we strongly urge the Institutions to do whatever is in their power to make all ongoing and related policy files – such as contract law -as small business friendly as possible. We foresee a general revision of the geo-blocking file in the near future, once the mistakes have become obvious in practice.

The European Small Business Alliance (ESBA) is a non-party political group, which cares for small business entrepreneurs and the self-employed and represents them through targeted EU advocacy and profiling activities. Today, ESBA is one of the largest organisations based on voluntary membership in Europe. Through its direct membership, associate membership and cooperation agreements, the Alliance now represents almost one million small businesses and covers 35 European countries. The two main pillars in ESBA's lobbying are the two main pressing issues for SMEs accross Europe: Access to Finance and Better Regulation.

European Small Business Alliance (ESBA)