You may have recently heard about the European Parliament’s imminent ban on geo-blocking. But you may not be entirely clear on what it is or how it could affect your eCommerce.
It will apply very soon
What is geo-blocking?
Geo-blocking means blocking access to services and/or product offers based on the user’s or customer’s geographic location. Platforms can identify the region each user is browsing from via their IP address. Once the location is identified, they adjust how the platform behaves, either by redirecting users to local websites or simply by restricting access to the catalog and/or changing the sale price.
What does the end of geo-blocking in the EU mean?
With this measure, through Regulation (EU) 2018/302, the Council of the EU aims to eliminate all unjustified geo-blocking of residents of member states.
The new rules will prevent discrimination against consumers and businesses regarding access and price, sales and payment conditions when they buy goods and services in another EU country.
“Ending unjustified geo-blocking will greatly expand the options available to citizens when shopping online and give a major boost to eCommerce. Consumers will be able to choose the best deals within the internal market. I would like to thank the Parliament and the Commission for helping the Presidency take another step toward the digital single market.”
Kadri Simson, Estonian Minister of Economic Affairs and Infrastructure
Another step toward the digital single market
Exceptions
Redirects, for example. If a store has different versions for member states, a Spanish user visiting a French store could be redirected to the Spanish version with their express consent (through some kind of selector), and should always have the option to go back to the French version if they wish.
Another case would be a redirect carried out for strictly legal reasons. This could be due to the type of products sold (cigarettes, weapons, medicines…) or to child protection issues. In any case, the reason for the redirect must be clearly explained to the user, and this must be done in the language of the store version they accessed.
There are other exceptional cases, such as differences in gross prices for products or services based on the VAT applied.
In these cases we would be talking about “justified discrimination”
Which products and services are affected by the new rules?
- Consumer goods
- Services:
- Tickets to shows and leisure parks
- Hotel stays
- Car rental
For now, pending a review within the next 2 years, copyright-protected products and services such as e-books, music and video games will be excluded. Financial, audiovisual, transport, healthcare and social services will also be excluded.
When can’t a consumer be discriminated against?
The new regulation sets out 3 cases in which the merchant must respect equal access and the general conditions offered for goods and services:
1- When goods are delivered in a member state where the merchant offers delivery or pickup at locations agreed with the customer.
2- Services provided electronically:
- Cloud services.
- Data storage.
- Web hosting.
- Firewall provision.
3- When the merchant provides services that the customer receives in the country where the merchant operates:
- Accommodation.
- Sporting events.
- Music festivals.
- Amusement parks.
No merchant will be required to deliver goods to customers outside the member state in which it provides its delivery service.
Does geo-blocking affect payment systems?
Yes. Payment methods will be chosen by the seller, but unjustified discrimination based on nationality, place of residence or place of establishment will be prohibited.
Entry into force
The Regulation was published in the Official Journal of the EU at the end of March 2018 and will enter into force on December 3.
For now, in Spain, some relevant aspects, such as penalties for non-compliance and the authorities responsible for enforcing them, are still being worked out.
All clear?
Now you know:
- The concept.
- The scope.
- The cases it affects and how.
- When it enters into force.
You now have what you need to know whether this will affect your online store. Make the necessary adjustments to remove any settings that unjustifiably discriminate against your customers regarding:
- Access.
- Sale price conditions.
- Shipping options.
- Payment methods.
If it’s still not clear, don’t hesitate to contact us. At TLG Commerce we’ll analyze your case in detail and give you the best advice for your eCommerce.
