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EU targets geo-blocking to boost e-commerce

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EU targets geo-blocking to boost e-commerce

Bienkowska - Ansip - Photo EC

(BRUSSELS) - Retailers will no longer be able to refuse to sell goods and services to people living in other EU countries under plans unveiled Wednesday to boost e-commerce in Europe.

The European Commission proposals form part of a three-pronged boost for e-commerce in which unjustified 'geoblocking' will be outlawed, cross-border parcel delivery will be made more affordable and efficient, and customer trust will be promoted through better protection and enforcement.

Commissioner for the Digital Single Market Andrus Ansip said: "All too often people are blocked from accessing the best offers when shopping online or decide not to buy cross-border because the delivery prices are too high or they are worried about how to claim their rights if something goes wrong. We want to solve the problems that are preventing consumers and businesses from fully enjoying the opportunities of buying and selling products and services online."

The plans were welcomed by the European Consumer Organisation, whose Director-General Monique Goyens said that while the single market had greatly benefited EU businesses, consumers "still face hurdles when they try to take advantage of better offers and deals available from retailers based in other countries. This is wrong and it is right that it is corrected."

She did however regret that consumers are still blocked from buying digital products such as ebooks and music from sellers based in other countries. "TV series, films and sport events will also stay off-limits," she said. " It is time the EU puts the final nail in the coffin of geo-blocking."

Today's e-commerce package is composed of:

  • A legislative proposal to address unjustified geoblocking and other forms of discrimination on the grounds of nationality, residence or establishment;
  • A legislative proposal on cross-border parcel delivery services to increase the transparency of prices and improve regulatory oversight;  
  • A legislative proposal to strengthen enforcement of consumers' rights and guidance to clarify, among others, what qualifies as an unfair commercial practice in the digital world.

Preventing geoblocking

The proposed legislation would ensure that consumers buying products and services in another EU country are not discriminated against in terms of access to prices, sales or payment conditions, unless this is objectively justified for reasons such as VAT or certain public interest legal provisions.

This includes asking for consumer IDs, being re-routed back to a country-specific website,or being made to pay with a debit or credit card from a certain country.

To avoid introducing disproportionate burden on companies, the Regulation does not impose an obligation to deliver across the EU and exempts small businesses that fall under a national VAT threshold from certain provisions.


Improving cross-border parcel delivery

The Commission says the Regulation proposed will increase price transparency and regulatory oversight of cross-border parcel delivery services so that consumers and retailers can benefit from affordable deliveries and convenient return options even to and from peripheral regions.

Cross-border shipping charges can be up to 5 times higher than domestic prices, without clear cost correlation.

While the Commission is not proposing a cap on delivery prices, it hopes the Regulation will foster competition by introducing greater price transparency. If it does not, it promises to take stock of progress in 2019 and assess if further measures are necessary.

The Regulation will give national postal regulators the data they need to monitor cross-border markets and check the affordability and cost-orientation of prices. It will also encourage competition by requiring transparent and non-discriminatory third-party access to cross-border parcel delivery services and infrastructure. The Commission will publish public listed prices of universal service providers to increase peer competition and tariff transparency.

The proposal complements self-regulatory initiatives taken by postal operators to improve the quality and convenience of cross-border parcel delivery services.

Consumer trust in e-commerce

The proposed revision of the Consumer Protection Cooperation Regulation will give more powers to national authorities to better enforce consumer rights. They will be able to:

  • check if websites geo-block consumers or offer after-sales conditions not respecting EU rules (e.g. withdrawal rights);
  • order the immediate take-down of websites hosting scams;
  • request information from domain registrars and banks to detect the identity of the responsible trader.

In case of EU-wide breaches of consumer rights, the Commission will be able to coordinate common actions with national enforcement authorities to stop these practices. It will ensure a swifter protection of consumers, while saving time and resources for Member States and businesses.

The Commission is also publishing updated guidance on unfair commercial practices, specifically in the digital world - clarifying the application of the EU's Unfair Commercial Practices Directive. For instance, any online platform that qualifies as a "trader" and promotes or sells goods, services or digital content to consumers must make sure that its own commercial practices fully comply with EU consumer law. Platforms must state clearly that rules on unfair commercial practices do not apply to private persons selling goods, and search engines would be required to clearly distinguish paid placements from natural search results.

The revised Guidance also incorporates two sets of self-regulatory principles agreed among stakeholders: one will support comparison tools to better comply with the Directive and the other will help the enforcement of unfair commercial practices rules against misleading and unfounded environmental claims.

Further information

Questions and answers: Boosting e-commerce in the EU

Proposal for a Regulation on addressing unjustified geo-blocking and other forms of discrimination based on place of residence or establishment, or nationality within the Single Market

Proposal for a Regulation on cross-border parcel delivery services

Proposal for a revision of the Consumer Protection Cooperation Regulation

Guidance on the application of the Unfair Commercial Practices Directive

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