E-commerce – Image by Varun
(BRUSSELS) – EU ministers agreed Monday to ban barriers to e-commerce known as ‘geo-blocking’ which prevent online customers from buying products or services from a website based in another Member State.
Geo-blocking is a discriminatory practice that occurs where traders operating in one country block or limit the access to their online interfaces, such as websites and apps, of consumers from other countries.
The draft regulation is intended to remove discrimination based on customers’ nationality, place of residence or place of establishment and to boost e-commerce.
Ministers hope the new rules will improve considerably Europe’s e-commerce economy and give Europeans access to a wider choice of goods and services.
This can only happen if there is a “guarantee of safety and trust for both buyers and sellers”, said Slovakia’s economy minister Peter Ziga, for the EU presidency: “With our decision today, which was reached just a few months after the proposal was tabled, we have paved the way for a rapid opening of negotiations with the Parliament and a potential close next year,” he said.
The proposal will prevent discrimination for consumers and companies on access to prices, sales or payment conditions when buying products and services in another EU country.
Under the new rules, traders will not be able to discriminate between customers with regard to the general terms and conditions – including prices – they offer on the sales of goods and services in three cases.
These are where the trader:
a) 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;
b) provides electronically supplied services, such as cloud services, data warehousing services, website hosting and the provision of firewalls. This does not apply to services where the main feature is the provision of access to or use of copyright protected works or other protected subject matter, or the selling of copyright protected works in an intangible form, such as e-books or online music;
c) provides services which are received by the customer in the country where the trader operates, such as hotel accommodation, sports events, car rental, and entry tickets to music festivals or leisure parks.
Unlike price discrimination, price differentiation is not prohibited, so traders are free to offer different general conditions of access, including prices, and to target certain groups of customers in specific territories.
Traders are also be obliged to deliver goods to customers outside the member state to which they offer delivery.
The regulation does prohibit unjustified discrimination of customers in relation to the means of payment. Traders will not be allowed to apply different payment conditions for customers for reasons of nationality, place of residence or place of establishment.
Regarding website access, traders cannot 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.
Under the general approach, some exemptions permitted by EU competition law will remain valid. One example is where traders are bound by an agreement with their supplier requiring them to restrict their passive sales (i.e. sales where the trader does not actively solicit the customer’s business). In these cases, the new regulation would not apply.
Now the general approach has been agreed, negotiations can start between Council, European Parliament and the Commission, once the Parliament agrees its position.
Competitiveness Council, 28-29/11/2016
Commission geo-blocking website
