THE NEW GEO-BLOCKING REGULATION AND WHY YOU SHOULD CARE ABOUT IT
Geo-blocking, or a set of restrictions imposed on the basis of geographic location are prevalent in e-commerce today. Geo-blocking often entails an entry denial to the website based on the website visitor’s location. In addition to that, more often than not, a customer is automatically redirected from the website version they wanted to visit to one that corresponds to the geographic location of the customer’s IP address. This redirection is usually not an option but an imposition on the customer and the customer seldom has a way of circumventing it, even by manually typing in the URL they want to visit.
In an effort to bring the Digital Single Market closer to reality and as part of a regulatory e-commerce package, a new EU Regulation (the “Geo-blocking Regulation”) will enter into effect on 3 December 2018 and it will tackle exactly this aspect of e-commerce.
1. The scope
In order for the Geo-blocking Regulation to apply, the sale must have a cross-border element, meaning that the Regulation does not apply to sales occurring within one EU Member State.
Those covered by the Geo-blocking Regulation are traders offering services and goods to customers. Customers can be consumers and businesses, provided that the businesses act as an end-user and purchase goods or services under general conditions (e.g. small and medium enterprises).
The Geo-blocking Regulation does not apply to certain sectors, such as transport and audiovisual services (such as those services subject to territorial licenses) and retail financial services. The Regulation also does not apply to gambling either.
Furthermore, and taking a similar approach as the GDPR, the Geo-blocking Regulation will apply even to traders not established in the EU but offering goods or services to customers in the EU.
2. But what does it mean?
Traders should review their general terms and conditions for the purpose of identifying if there are any aspects that can refuse customers on the basis of nationality, establishment or residence. Furthermore, the Geo-blocking Regulation will signify a need for traders to ensure they have the mechanisms in place to ask for the customer’s explicit consent in order to be able to redirect the customer to a specific version of the website.
However, the customer must always be able to easily go back to the version of the website they initially visited. It is also important to understand that tailored websites are still available and possible under the condition that there is consent and that there is no discrimination.
Furthermore, the traders must review the delivery policies because there cannot be any discrimination in this sense either. Rather than expanding on the delivery pick-up points, traders will have to ensure that the delivery policies and conditions are applicable on a general level to all EU customers. For example, if a customer from Sweden orders a product from a trader based in Spain and who only delivers within Spain, the customer will have to be able to collect their goods within Spain.
Traders should also do a review of the payment options they provide. The trader may not impose different or discriminatory conditions on the customer, provided that the following conditions for payment are met:
- the payment can be made through electronic transactions by credit transfer, direct debit or a card-based payment instrument within the same payment brand and category;
- authentication requirements are fulfilled; and
- the payment occurs in a currency accepted by the trader.
For further information regarding the Geo-blocking Regulation, please contact Dena Dervanović