On 3rd December 2018, the Geoblocking Regulation entered into force. The purpose of the Geoblocking Regulation is to reduce unjustified geoblocking within the EU. After all, blocking online access to goods or services can lead to an obstruction of the (digital) internal market within the EU.
What is geoblocking?
Geoblocking occurs when a trader from a Member State restricts or blocks access to (the purchase of) goods or services for (online) customers from another Member State. Consider, for example, blocking access to a website, applying restrictive conditions or even refusing to sell.
(Digital) internal market
In 2015, the European Commission established that geoblocking is an important cause of customer dissatisfaction and fragmentation of the (digital) internal market, because it limits the free choice of consumers. Therefore, as part of the “digital single market”, the European Commission introduced the Geoblocking Regulation.
The Geoblocking Regulation contains a number of prohibitions for traders on discriminatory practices based on the nationality, place of residence or place of business of customers. The following three goals are thus pursued.
1. Unrestricted access to online interfaces
A trader may not block or restrict access to his online interface with technological measures or otherwise, for reasons related to a customer’s nationality, place of residence or place of business.
Moreover, redirection to a local (version of the) website is only allowed if a customer has given explicit permission for this. The original (version of the) website must then remain easily accessible for a customer.
2. Unrestricted access to goods and services
A trader is also prohibited from using other conditions for access to his goods or services for reasons related to a customer’s nationality, place of residence or place of business.
This prohibition on applying different conditions depending on the nationality, place of residence or place of business of a customer applies in the following three situations:
- A trader delivers sold goods to a place in a particular Member State that has been designated by the trader as a place of delivery in the general access conditions, or the goods can be picked up at a place agreed by the trader and customer in a Member State where the trader offers that option in the general access conditions.
Example: a trader who only offers collection points and / or delivery services in Italy is not obliged to also offer these services and / or collection points in France. However, it must be possible for French customers to collect the product themselves or have it collected at a collection point in Italy. The trader is therefore not forced to deliver outside Italy, but he is not allowed to refuse or otherwise discriminate a customer (for example by charging extra costs) based on his nationality or place of residence when a customer wants to collect the product in Italy.
- A trader provides his services electronically (except for copyright protected works or other protected material).
Example: it is forbidden to refuse a Danish customer for the use of a Dutch app based on his place of residence.
Nor may any restrictive conditions be imposed on a Czech company if it has its website hosted by an Austrian party. If hosting via this route would be more expensive for justified reasons, then those costs may of course be passed on to the Czech company. However, the Austrian hosting party may not charge additional costs purely on the basis of discrimination, such as the place of business of the Czech company.
- A trader provides services at a physical location within his Member State other than by electronic means.
Example: a hotel in France should in principle charge the same prices for Dutch visitors as for French visitors. Nor can a Belgian customer be refused on the basis of his nationality when he wants to rent a car in Germany.
3. Non-discrimination with regard to payment
Finally, in certain cases a trader may not apply different conditions for means of payment accepted by him, based on a customer’s nationality, place of residence or place of business, or based on the location of the payment account, payment service provider or payment instrument.
The Geoblocking Regulation only applies to (intended) cross-border transactions. When a transaction is purely internal, it is therefore not covered by the Geoblocking Regulation.
There is a “purely internal” transaction when all relevant elements of a transaction (including the nationality of a customer and the place of business of the trader) are limited to one Member State.
The Geoblocking Regulation only prohibits discriminatory practices for reasons that are not objectively justified. This means that the prohibitions in the Geoblocking Regulation will not always apply to a trader who carries out cross-border transactions.
The Geoblocking Regulation does not oblige traders to offer goods and services in other Member States. But when a trader chooses to offer cross-border, traders should not engage in discriminatory practices based on the nationality, place of residence or place of business of a customer.
The Geoblocking Regulation does not apply to certain services such as streaming of copyrighted works such as music, online games and e-books, audiovisual services, financial services and transport services.