Geoblocking & Discrimination [EU]

Table of Contents

Geo-blocking: addressing discriminatory treatment of customers

Regulation (EU) 2018/302 on addressing unjustified geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment within the internal market

It aims to ensure the proper functioning of the EU’s internal market by preventing unjustified geo-blocking* and other forms of discrimination based, directly or indirectly, on customers’ nationality, place of residence or location, in online and off-line transactions within the EU.

It does not oblige traders to deliver across borders (if this service is not already provided by the trader) or to harmonise prices.
It does, however, prohibit discrimination between EU customers in access to goods and services on the basis of the customer’s nationality, residence or establishment, when the foreign customer accepts the conditions applied domestically (i.e. the right to shop like a local).

Scope

The regulation does not apply to:

purely internal situations in EU countries;
other services such as financial, audiovisual, transport, healthcare and social services, in line with the scope of the EU’s Services Directive.
The regulation does not apply to copyright-protected content services — such as music streaming services, e-books, software and video-games — but this will be reviewed when the regulation is evaluated.

Access to online interfaces

The regulation bans blocking access to websites and re-routing without the customer’s prior consent.

Even if the customer gives consent to the redirection, the original version visited must remain accessible.

Where the blocking, limiting access or re-routing are justified by EU law, or in national law in accordance with EU law, traders must provide a clear explanation to customers.

Conditions of access to goods or services

There are 3 specific situations where traders may not apply different general conditions of access to goods or services, for reasons related to a customer’s nationality, place of residence or location, unless it is to comply with EU law, or national law in accordance with EU law:

the sale of goods delivered to an area served by the trader (or picked up by the customer);
the sale of electronically supplied services;
the sale of services provided in a specific physical location.

Means of payment

Traders remain free to accept whatever payment means and card brands they want. However, they are not allowed to discriminate within the same means of payment or brand for reasons related to:

the customer’s nationality, place of residence or place of establishment;
the location of the payment account;
the location of the payment services provider;
the place of issue of the means of payment.

Traders are considered to be discriminating when they refuse a payment, where:

it has been made through electronic transactions by credit transfer, direct debit or card-based payment within the same brand and category;
it is in a currency that the trader accepts; and
the authentication requirements have been fulfilled.
Traders may, however, request charges for the use of a card-based payment for which interchange fees* are not covered by EU rules on fees for card-based payments.

Relationship with competition law and passive sales

In general, the regulation does not affect the rules on competition, in particular Articles 101 and 102 of the Treaty on the Functioning of the European Union.

Agreements regarding active sales* remain governed by EU rules on exemptions for vertical supply and distribution agreements. However, the geo-blocking regulation applies for passive sales*: a restrictive agreement with a supplier requires a trader to treat customers from other EU countries differently for such sales, in a manner prohibited by the regulation, is not allowed and must be disregarded.

Review

The European Commission will present a report evaluating the application of the regulation by March 2020 and every 5 years thereafter. The first report will examine whether its scope might be expanded.

Application & Background

It has applied since 3 December 2018.

KEY TERMS

Geo-blocking: a trader’s discriminatory practice of preventing online customers from accessing products or services offered on a website established in another country and from purchasing those products or services, for instance by blocking access to websites across borders; denying the possibility to complete an order, to purchase goods or services when accessing a website from abroad.

Interchange fees: fees charged by a cardholder’s bank to a retailer’s bank every time a consumer makes a card-based purchase.
Active sales: in the context of exclusive distribution agreements, sales made by actively approaching individual customers inside another distributor’s exclusive territory.
Passive sales: sales in response to unsolicited requests from customers located in a territory in which the trader is not active.

MAIN DOCUMENT

Regulation (EU) 2018/302 of the European Parliament and of the Council of 28 February 2018 on addressing unjustified geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment within the internal market and amending Regulations (EC) No 2006/2004 and (EU) 2017/2394 and Directive 2009/22/EC (OJ L 60I , 2.3.2018, pp. 1-15)