Geo-Blocking and a No Deal Brexit

Dechert LLP

Dechert LLP

On December 3, 2018 the Geo-Blocking Regulation (Regulation (EU) 2018/302) will come into effect in each of the EU member states. As part of a continued effort to provide guidance to businesses in case of a no deal Brexit scenario, the government has recently provided a technical notice on the effect such a scenario would have on the Geo-Blocking Regulation and its enforceability in the UK.

What is geo-blocking?

Geo-blocking is blocking or limiting access to online interfaces, such as websites, on the basis of a person’s geographical location. For example, a customer located in France, visiting a UK company’s website, may be redirected or prevented from completing their transaction. A trader may engage in this practice for a number of reasons, including owing to:

  • territorial restrictions of relevant intellectual property rights;
  • concerns about delivery costs;
  • concerns about different legal environments; and
  • foreign language requirements.

Geo-blocking restricts a customer’s ability to enter into cross-border transactions and therefore unjustified geo-blocking is considered by the European Commission to be harmful to the operation of the single market. To address this issue, the Geo-Blocking Regulation was passed.

The Geo-Blocking Regulation

The Geo-Blocking Regulation will apply throughout the European Union, including in the UK. The regulation will prohibit:

  • blocking access to, or forced redirection away from, a website owing to a customer’s location in the EU;
  • discrimination by traders on the basis of the customer’s nationality or place of residence when they are purchasing (i) goods online, (ii) electronically supplied services, or (iii) 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.

What happens if there is a no deal Brexit?

The UK government has stated that if there is a no deal Brexit, on leaving the EU, the Geo-Blocking Regulation will cease to have effect under UK law and that the prohibition of UK companies discriminating between customers located in the EU and the UK will cease to apply.

However, the Geo-Blocking Regulation will continue to operate in the EU and consequently, UK businesses offering goods or services to customers in the EU will have to continue to comply with the Geo-Blocking Regulation in their treatment of customers from different EU member states after Brexit.

What should businesses be doing now?

Businesses should be taking steps to ensure that they are compliant with the Geo-Blocking Regulation which will take effect on December 3, 2018. Those businesses who want to continue to trade in the EU and who are compliant with the Geo-Blocking Regulation prior to March 2019 should not need to take any further steps to be compliant with the Geo-Blocking Regulation once the UK has left the EU.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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