HomeInsightsCouncil of European Union adopts Geo-Blocking Regulation to ban unjustified geo-blocking in internal market

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The Council explains that geo-blocking is a discriminatory practice that prevents online customers from accessing and purchasing products or services from a website based in another Member State. The new law will remove barriers to e-commerce by avoiding discrimination based on customers’ nationality, place of residence or place of establishment.

The main features of the Regulation are:

  • Objective and scope: the new rules will prevent discrimination for consumers and companies on access to prices, sales or payment conditions when buying products and services in another EU country. Services where the main feature is the provision of access to and use of copyright protected content, or the selling of copyright protected works in an intangible form, such as music streaming services, e-books, online games and software, are excluded from the scope of the Regulation, but this will be subject to a review by the Commission. Other services, such as financial, audio-visual, transport, healthcare and social services are also excluded, in line with the Services Directive;
  • Equal access to goods and services: traders will not be able to discriminate between customers with regard to the general terms and conditions, including prices, where the trader: (i) 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; (ii) provides electronically supplied services, such as cloud services, data warehousing services, website hosting and the provision of firewalls; and (iii) provides services that are received by the customer in the country where the trader operates, such as hotel accommodation, sports events, car rental, or entry tickets to music festivals or leisure parks. Unlike price discrimination, price differentiation will not be prohibited, so traders are free to offer different general conditions, including prices, and to target certain groups of customers in specific territories. Further, traders will not be obliged to deliver goods to customers outside the Member State to which they offer delivery;
  • Payment transactions: unjustified discrimination of customers in relation to payment methods will be forbidden. Therefore traders will not be allowed to apply different payment conditions for customers for reasons of nationality, place of residence or place of establishment;
  • Non-discrimination for e-commerce website access: traders will not be allowed to 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;
  • Passive sales: as a general rule, the new Regulation will prevail in cases of conflict with competition law. However, the right of suppliers to impose active sales restrictions will not be affected; and
  • Review clause: the Commission will carry out a first evaluation of the impact of the new rules on the internal market two years after their entry into force. The evaluation will include a possible application of the new rules to certain electronically supplied services that offer copyright content such as downloadable music, e-books, software and online games.

The Regulation, which will be published in the EU’s official journal before the end of March 2018, will take effect nine months after its publication. For further information, click here.