The European Union, to ban geoblocking to boost its digital single market

The new legislation is to be reviewed in two years in order to extend the geoblocking ban to products and services still not included

Eva González Luxembourg (Belgium), 5 December, 2017

The Internal Market and Consumer Protection Committee has approved  a Parliament/European Council/Commission agreement on legislation to ban geoblocking on digitally sold goods and services within the EU.

Capture of the infographic of the European Commission Study on Geo-Blocking Practices within the EU. © European Commission.

The geoblocking ban affects hosting services, but the legislation, authored by the EPP Group’s Rosa Thun from Poland, does not include transport services, videos and other audiovisual services but it is to be reviewed in two years in order to extend the geoblocking ban.

For the consumers it means that it will appear in their screens no more: we don’t deliver to your country, we don’t accept your credit card…, said Rosa Thun.

For the traders the new regulación means that they can sell from their website to consumers everywhere in the European Union as they were at home, so they don’t need to learn the laws of any other country, but theirs to sell online everywhere within the European Union, she explained.

The Draft Regulation will sent to the Parliament to be voted in the next plenary session then the Regulation will be formally approved by the EU Council.

The principle of national treatment applies to…

Online EU buyers located in a country other than the one in which the merchant operates should be treated as local customers in the following cases:

1.- In the case of purchase of goods (for example, electrical appliances, electronic products, clothing) that must be delivered in a member state in which the merchant offers the delivery in the general conditions of contract. Also when the goods are collected in a location agreed by both parties, within an EU country in which the merchant offers the said option.

2.- When it comes to receiving electronically supplied services not protected by copyright, such as cloud services, firewalls, data storage, hosting of websites. Also when it comes to acquiring a service that is supplied at the merchant’s premises or at a physical location where the merchant operates, for example, hotel stays, sporting events, car rentals, music festivals or tickets to an amusement park .

3.- The automatic change of route to another website, for reasons related to the nationality or place of residence, without the prior consent of the consumer will also be forbidden.

Only one in three sites currently allows purchases by consumers located in another country

Only 1 out of 3 websites monitored in a Report and investigación carried out in 2016 by the EU ommission, allowed a consumer who accesses the website from another European country to complete the purchase.

The research showed some other outcomes:

1.- Geo-blocking occurs at different times of the online purchase process:

a) Buyers were redirected to another website, directly blocked or offered different products on 5% of websites in general, and more frequently on flight bookings (13%) and car rental (11%) .

b) When registering on the website to place an order.- buyers were blocked in 27% of the cases. The three most requested types of personal information during the registration were the email address (93%), the physical address (88%) and the telephone number (76%).

c) When selecting the delivery options.- The buyers were blocked in 32% of the cases. This practice was more common in the case of the websites of the EU13 Member States (48% of the websites restricted delivery to their own country) compared to the EU15 Member States (28 % of websites restricted delivery to their own country).

d) When choosing payment options.- Buyers were blocked in 26% of cases. Blocking was achieved not accepting the payment method (credit card, 15% of cases) or avoiding buyers from successfully entering the details of their payment card.

2.- Geo-blocking occurs more frequently on websites of EU13 merchants:

It is more extended among online retailers in EU13 (84%) that the page blocks online cross-border shoppers compared to retailers located in EU15 (66%).

The proportion of geo-blocking also increased when purchasers made the purchase from an EU13 country (74%) compared to those located in the EU15 (64%).

3.- Geo-blocking is more frequent when it comes to physical goods than for services:

For tangible goods, geoblocking was more frequent than for household appliances such as microwaves (86%). The lowest geo-blocking rate occurred in the case of purchase and sale of books (60%).

4.- In the case of services, geoblocking rate was higher in relation to the online reservations for offline leisure sector. It was lower at the time of acquiring tickets for sporting events (40%). The lowest geo-blocking rate occurs when booking travel services, such as hotel reservations (33%).

Image over the headline.- Rosa Thun member of the EPP Group. European Parliament

Related Eastwind links:

Rosa Thun, explains why the geoblocking ban is benefitial for traders and consumers

Related external links:

EU Commission Report on Geoblocking practices within the European Union