December 11, 2017

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 draft Regulation, which still needs final adoption by the Council and the Parliament, removes barriers to e-commerce by avoiding discrimination based on customers’ nationality, place of residence or place of establishment.

The main features are:

• the Regulation 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, will be excluded from the scope of the Regulation, subject to a review by the Commission;
• other services such as financial, audio-visual, transport, healthcare and social services will also be excluded;
• the new rules comply with other EU legislation in force applicable to cross-border sales, such as rules on copyright and EU law on judicial cooperation in civil matters;
• traders will not be able to discriminate between customers with regard to the general terms and conditions, including prices in three situations where the trader:
  • 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;
  • provides electronically supplied services such as cloud services, data warehousing services, website hosting and the provision of firewalls; and
  • provides services which 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 will be free to offer different general conditions, including prices, and to target certain groups of customers in specific territories;
• traders will not be obliged to deliver goods to customers outside the Member State to which they offer delivery;
• unjustified discrimination of customers in relation to payment methods will be prohibited. Traders will not be allowed to apply different payment conditions for customers for reasons of nationality, place of residence or place of establishment;
• 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; and
• the new Regulation will prevail in cases of conflict with competition law, but the right of suppliers to impose active sales restrictions will not be affected.

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 copyrighted content such as downloadable music, e-books, software and online games.

The Council and the European Parliament will have to endorse the draft Regulation in the coming months. Following formal adoption, the Regulation will be published in the EU’s official journal and will be applicable nine months after publication. To read the Council’s press release in full and for a link to the draft Regulation, click here.