Unblocking Online Shopping
If, like a growing number of us, you do much of your shopping online these days, your life just got even easier, more varied and -quite possibly- cheaper: on 3 December, the new EU Geoblocking Regulation entered into force. What on earth is geoblocking, you may well ask? Well, I find that, if I go to the .de website of a well-known online retail empire whose name starts with the letter “A”, not only do I find different products than are available on the retailer’s .co.uk website, I also find that the same products often cost less on the German website than in the UK after allowing for currency conversion. My log-in credentials work in the same way on both platforms and I still get free delivery. Perfect. However, some other online retailers have traditionally not liked the idea of the customer being king, and shopping around between different country websites of the same retail business, and made sure that you were automatically redirected to the website appropriate to the location from which you accessed the internet (recognisable by the IP address). The effect (if not the objective) of restricting your access to the retailer’s other websites based on your geographical location was that you had less choice and could be charged higher prices. Well, that’s geoblocking. Not helpful.
One of the EU’s grand projets is the creation of a digital single market across all member states and geoblocking, quite literally, stands in the way of that; it restricts online shopping and cross-border sales of goods and services both to consumers and to business end users. The Regulation therefore now prohibits unjustified restrictions on accessing websites across borders, denying the possibility to complete an order, purchase goods or to download content when accessing a website from abroad, denying shipment or delivery across borders, or providing different prices and conditions depending on the customer’s nationality, country of residence or location. The Regulation applies regardless of whether the provider is established in another EU member state or in a third country (typically, the United States). There is also a provision against discrimination in relation to means of payment. The Regulation is part of a wider legislative package that also aims to facilitate cross-border delivery of parcels and the application of VAT rules, as well as to strengthen consumer rights.
There may still be valid reasons for traders not wishing to sell or deliver across borders, for example, tax implications or different legal requirements for providing goods or services in another country, provided that a denial of access can be justified objectively. There are (for now at least) some caveats: the prohibition on applying different general conditions of access for reasons related to a customer’s nationality or residence do not apply to non-audio-visual copyright protected content services (such as e-books, on-line music, software and videogames). Audio-visual services are outside of the scope of the Regulation altogether, as are some other services such as financial, transport and health services.
So, all in all, a step forward for e-commerce and for consumers in Europe. Well done EU, thank you and keep up the good work.
Gregor Kleinknecht, Partner
This article was originally published in Discover Germany’s January Issue and can be accessed here, on page 69.