Get ready for the ‘Geo-blocking Regulation’: removing barriers to e-commerce across borders
Just as businesses are finalising their ‘GDPR’ compliance actions, along comes yet another European Union (EU) Regulation, this time requiring any business serving end-customers cross-border anywhere within the EU to take steps to comply.
Businesses now have just over seven months to take action to ensure they comply with the new ‘Geo-blocking Regulation’ (the Regulation).
The Regulation was adopted by the EU on 28 February 2018 and will give consumers better access to goods and services within the EU internal market by prohibiting ‘unjustified’ geo-blocking and other forms of discrimination.
What does the Regulation cover?
First, traders must not block or limit access to their ‘online interfaces’, such as websites and mobile apps, on the basis of the customer’s nationality, place of residence or place of establishment. Traders are also prohibited from redirecting customers to a different version of their website or mobile app without the customer’s express consent.
Second, the Regulation outlines three scenarios in which discriminatory treatment of customers – for reasons of nationality, place of residence or place of establishment – cannot be justified:
- Sale of physical goods that are delivered in a Member State to which the trader offers delivery or are collected from a location in a Member State where the trader offers that option;
- Sale of electronically supplied services (such as cloud services, data warehousing services, website hosting, firewalls, search engines and internet directories); and
- Sale of services in a Member State where the trader operates (such as hotel accommodation, sports events, car rental and entrance tickets to music festivals or leisure parks)
Nonetheless, the following services are carved-out from the scope of the Regulation:
- audio-visual and broadcasting services with copyright protected content;
- financial services;
- electronic communication services and networks; and
- transport services.
Third, traders must not discriminate against payment methods for reasons related to the customer’s nationality, place of residence or place of establishment (including the location of the payment account, the place of establishment of the payment service provider or the place of issue of the payment instrument).
What should businesses do?
The Regulation takes effect from 3 December 2018 and is particularly relevant to businesses selling online in EU Member States, whether or not they are located in the EU.
Businesses should review their online interfaces, terms and conditions, payment mechanisms and distribution systems to ensure compliance with the Regulation. If necessary, businesses should modify their processes and sales terms to remove all unjustified geo-blocking practices.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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