The new provision on the banning of unjustified geoblocking in online sales is at the heart of the EU Commission’s aspiration and effort to create a real Digital Single Market within the European Union. The term “geoblocking” stands for any type of technical or contractual discrimination based on the nationality or residence of a customer.
The core aim of the now finalised regulation is to prevent discrimination for consumers and companies in the context of access to websites, prices, sales or payment conditions when buying products and services in another Member State. However, there are meaningful exceptions to the new anti-geoblocking regime – in particular copyright works and sales with no cross-border element.
Legislative Process
We have followed the progress of the Commission’s initial proposal for an anti-geoblocking regulation (COM (2016) 289) very closely – see our blog posts of 13 May 2016 (here), 27 May 2016 (here), 24 November 2017 (here) and 8 February 2018 (here).
After a certain amount of wrangling – in particular over whether copyright content should be covered by the Regulation or not – the amended draft regulation sailed through the EU Parliament on 5 February 2018, with a great majority of 557 parliamentarians in favour of the bill (press release).
The Council has now also adopted without changes the text the Parliament has voted for (press release). You may download the version here.
Lilyana Pavlova, Minister for the Bulgarian Presidency of the Council of the European Union is quoted:
“The end of geo-blocking means wider choice and consequently better deals for consumers and more opportunities for businesses. The Bulgarian presidency attaches great importance to the digital economy. I want to compliment previous presidencies, the Parliament and the Commission for the collective success in taking forward the European Digital Single Market.”
The new regulation is supposed to be published in the Official Journal of the European Union by late March. It will enter into force nine months thereafter. According to Article 9, the Commission will conduct an impact assessment after two years from the day of entry into force.
Impact on Business
The actual impact of this new regulation is massive. Any merchant and any market player offering goods or services online within the European Union will be affected. The terms & conditions currently in use as well as any type of website rerouting need to be reviewed against the new law. The Regulation will also impact on strategic decisions as to whether to adopt a single pan-EU marketing approach and website gateway, or multiple jurisdiction-specific offerings. To be clear, the new regulation does not mean that the same good or service must be offered at the same price and condition throughout Europe. However, thought will need to be given to which criteria might justify price differences and differing T&Cs in future.
