On 20 November the European Parliament, the Council and the Commission reached an agreement (here) to adopt the proposed Geoblocking Regulation (here).
The Regulation is a key plank of the Commission’s Digital Single Market Strategy (here) and it is intended to end unjustified geoblocking for consumers wishing to buy products or services online within the EU.
What is geoblocking?
Geoblocking is a term given to the practical and technical measures used by online traders to deny access to websites, or online services, to consumers based in member states other than the website domain. The Commission considers that these restrictions often result in consumers being charged more for products or services purchased online.
A well-known example of geoblocking is the car rental market: renting a car from a company in the UK can cost up to 53% more than renting from the same company in Poland, but a UK consumer cannot access the Polish site for the cheap deals.
What does the geo-blocking Regulation prohibit?
The Regulation prohibits unilateral commercial behaviour which discriminates on the basis of where a person is from, where they live or where a business is established.
It also prohibits agreements containing passive (or unsolicited) sales restrictions which violate the rules.
It does not (currently) apply to copyright protected works, nor does it harmonise prices between different EU Member States, or impose an obligation to sell.
The specific prohibitions are:
• Geoblocking: A trader must not block or limit customers’ access to websites because of a customer’s nationality, residence or place of establishment.
• Redirecting a customer without permission: A trader must seek permission before redirecting based on nationality or location. Even if a customer agrees to the redirection the trader must make it easy to return to the website originally searched.
• Discrimination: on the grounds of nationality/residence/place of establishment is prohibited; for applying example different terms and conditions on such grounds will not be permitted. This prohibition applies to:
o sales of goods when the trader is based in a different Member State to the customer (for example buying a car or a refrigerator);
o all electronically-supplied services, other than copyright-protected works, (for example internet hosting services); and
o The sale of services provided in a specific physical location (for example buying a trip to an amusement park in another Member State).
When is geoblocking justified?
The Regulation accepts that some forms of geoblocking may be justified, for example in relation to specific national VAT obligations or different legal requirements.
When is it in force?
The Regulation will come into force nine months after its publication in the EU Official Journal.