March 14, 2016

The CMA says that it agrees with the Commission’s objective to maximise access for EU consumers to services provided across the whole EU in order to empower consumers and increase online trade within the Single Market.

The key points it makes include:

• there are significant risks associated with the introduction of broad-brush ex-ante regulation restricting geo-blocking in the absence of economic evidence demonstrating harmful effects of such practices. The impact of any additional ex-ante regulation should be carefully considered and should in any event be limited to governing situations where there is sound economic evidence of overall consumer harm;
• unjustified geo-blocking practices should be addressed using the existing regulatory framework, in particular the Services Directive (2006/123/EC). To encourage the enforcement of Article 20(2) of the Directive further clarification of the categories of “objectively justified” discrimination is needed. This could be achieved through a combination of targeted, enforcement action and additional guidance for national enforcement bodies and businesses;
• as a matter of principle, it is important that consumers are empowered to access websites that are most relevant to them. In relation to geo-blocking the CMA has particular concerns about practices depriving consumers of any meaningful information.  An example consists of automated re-routing, which consumers cannot override and which prevents consumers accessing information on certain websites.  It is not clear that any benefits arising from this practice outweigh the negative impact on consumer choice;
• the concept of the Single Market allows for certain discriminatory practices to be justified. As such, in the CMA’s view, price discrimination (and therefore geo-blocking where it supports price discrimination) or a refusal to supply certain geographic areas could be justified in some circumstances.  Businesses that provide services in one Member State should not necessarily be required to provide their services at the same price in all Member States.  In the CMA’s view, there may be overall economic/consumer advantages arising from geographic price discrimination in some cases that should be taken into account.  To read the CMA’s full response, click here.