What is Geo-blocking?
Geo-blocking is the term used to describe restriction of access to internet content based on a customer’s geographical location.
The Geo-blocking Regulation (EU) 2018/302 (the “Regulation”) will ban geo-blocking and “geo-discrimination” – offering different terms and conditions to customers from different Member States who are prepared to pick up the goods or access the services from a trader’s location. It will do this by introducing an obligation to treat EU customers in the same manner as local customers when they are in the same situation, regardless of their nationality, place of residence or place of establishment.
The Regulation will prohibit specific activities, including:
- blocking access to, or automatic redirection away from, a website based on an internet user’s EU nationality or place of residence;
- discrimination by traders on the basis of the customer’s nationality or place of residence when they are purchasing goods online, electronically supplied services (such as web hosting or cloud storage, but excluding copyrighted material such as ebooks and streamed movies), or services provided in a specific physical location; and
- discrimination by traders against a means of payment solely on the basis of its place of issue within the EU.
The Geo-blocking Regulation does not create an obligation on traders to deliver across the EU. In fact, traders will remain free to set different prices on websites targeting different customer groups and will also remain free (in principle) to define the geographical area in which they provide delivery services. The Regulation will instead focus on ensuring that customers cannot be discriminated against on grounds of where they come from or where they live.
The Geo-blocking Regulation comes into force on 3 December 2018.
The Geo-blocking Regulation is an EU regulation and will therefore apply across the Member States (subject always to national laws). Traders established in third countries will only be within the scope of the Geo-blocking Regulation to the extent they sell (or intend to sell) goods or services to customers in the EU.
The Geo-blocking Regulation is set to increase price transparency by allowing customers access to different national websites and is intended to realise the full potential of the internal market where the free movement of goods and services is ensured.
Each Member State has to ensure that effective, proportionate and dissuasive measures can be taken against traders who are in breach of the Regulation.
The Geo-blocking Regulation will apply to traders of all sizes who sell their goods/services into EU countries across the borders of the Member States. It will also apply to traders selling into the EU (even if established wholly outside it).
Traders selling online will need to have made sure by 3 December 2018 that their online point of sale does not discriminate against online customers. Companies should review their trading terms and conditions, payment requirements, logistics and distribution operations in order to ensure compliance.
Brexit and Geo-blocking
With it looking likely that the UK will leave the single market, it raises the question of how the Geo-blocking Regulation will apply following Brexit. If there is a “no deal” scenario in particular, the UK version of the Geo-blocking Regulation will cease to have effect in UK law, in which case a UK trader would be able to offer different terms to a UK customer compared to a customer in a different Member State. However, the Geo-blocking Regulation will continue to apply to UK businesses operating within the EU (and non-EU businesses who sell goods and services into the single market) and would mean that a UK trader would not be able to discriminate between customers in different EU Member States, i.e. between a customer in Spain and a customer in France.
For more information, or to check that you will comply once the regulation applies, please contact a member of our Commercial team.
Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.