Online shopping without borders? – The new EU Geo-Blocking Regulation

Today, Monday, December 3 is supposed to be the day on which the last barriers to online trading are supposed to be removed in the EU. As of today, the “Geo-Blocking Regulation” will apply. Throughout the entire European Union, customers can no longer be discriminated against in relation to their nationality, place of residence, or place of establishment.

Formally, the Geo-Blocking Regulation (Regulation (EU) 2018/302) entered into force in March of this year. On the one hand, it aims at intensifying market transparency, and on the other hand at guaranteeing a fully functioning Internal Market. While certain provisions of the Geo-Blocking Regulation in principle also apply to stationary trade, the Regulation is tailored to the online marketplaces: all European customers should be guaranteed equal access to goods and services offered in the EU. What represents a strengthening and promotion of cross-border competition also entails a considerable conversion effort for online traders.

The new rules followed an investigation by the EU Commission on electronic commerce. According to the study, some 60 percent of European websites applied geo-blocking practices, thus blocking customer access in online sales to a particular website or restricting other content or even entirely blocking users solely on the basis of their place of residence. This resulted in a restriction of cross-border (internet) distribution and created obstacles to the integration of the single market.

The Geo-Blocking Regulation governs three cases in which discrimination based on nationality, place of residence, or establishment is prohibited:

• blocking or limiting access to websites, apps, or platforms (including redirection without the customer’s explicit consent);
• discrimination by means of different general conditions of access to certain goods or services; this includes all different sales terms, including price, payment, and delivery terms;
• discrimination against customers related to the processing of payment transactions.

These provisions of the Geo-Blocking Regulation apply immediately and directly in the European Union without any additional national transposition acts. Online traders should therefore check

• whether geo-blocking measures apply to their website and the extent to which access for customers is restricted on grounds of nationality, place of residence, or place of establishment;
• whether the general conditions used and the information on payment terms comply with the principle of non-discrimination.

The Geo-Blocking Regulation will therefore have an impact not only on German online trading but also on the development of e-commerce throughout the European Union. Companies selling goods or services across borders would do well to familiarize themselves with the Geo-Blocking Regulation requirements and to comply with them in their sales activities.

We assist our clients in adapting their distribution to the requirements of the Geo-Blocking Regulation. Contact us at any time! Your contacts are the experts from the practice group Distribution Law. Dr. Reinhard Siegert specializes in designing distribution systems in compliance with antitrust law and other antitrust issues.