Geo-blocking refers to practices used by online sellers that result in the denial of access to websites from other Member States. It also includes situations where access to a website is granted, but the customer from abroad is prevented from finalising the purchase or being asked to pay with a debit or credit card from a certain country. "Geo-discrimination" also takes place when buying goods and services off-line, e.g. when a consumer is physically present at the trader’s location but is either prevented from accessing a product or service or being offered different conditions.
The Geo-blocking Regulation aims to provide for more opportunities to consumers and businesses within the EU's internal market. In particular, it addresses the problem of (potential) customers not being able to buy goods and services from traders located in a different Member State for reasons related to their nationality, place of residence or place of establishment, hence discriminating them when they try to access the best offers, prices or sales conditions compared to nationals or residents of the traders' Member State.
The Regulation bans the blocking of access to websites and re-routing without the customer’s prior consent. This increases price transparency by allowing customers to access different national websites. This provision also applies to non-audio-visual electronically supplied services, such as e-books, music, games and software.
Example: An Irish customer wants to access the Italian site of an online clothes retailer. Even though she types in the URL of the Italian version, she gets redirected to the Irish version. After the entry into force of the Regulation such redirection will require the explicit consent of the customer and even if the customer gives consent to the redirection, the original version she sought to visit should remain accessible.
The Regulation defines specific situations when there can be no justified reason for geo-blocking or other forms of discrimination based on nationality, residence or establishment. In these situations, customers from another Member State have the same access to goods and services as local customers. These situations are:
Sale of products without delivery
- When a customer buys a good, such as electronics, clothes, sportswear or a book, which the trader does not deliver cross-border to the customer's Member State. Such customers from other Member States are entitled to delivery in the Member State of the trader in the same way as local customers.
- Example: A Belgian customer wishes to buy a camera and finds the best deal on a German website. The customer will be entitled to order the good and collect it at the trader's premises or organise delivery himself to his home.
Sale of electronically supplied services
- When a customer wants to buy an electronically supplied service, such as cloud services, data warehousing or website hosting, from a trader established in another Member State. Such customers are entitled to do so in the same way as local customers are.
- Example: A Bulgarian consumer wishes to buy hosting services for her website from a Spanish company. She will have access to the service, can register and buy this service without having to pay additional fees compared to a Spanish consumer.
Sale of services provided in a specific physical location
- When a customer buys a service which is supplied in the premises of the trader or in a physical location where the trader operates, where those premises or that location are in another Member State than in that of the customer. This category covers services such as concert tickets, rental of summer accommodation and car hire. In this situation, too, the customer is entitled to equal treatment.
- Example: An Italian family visits a French theme park and wishes to take advantage of a family discount on the price of the entry tickets. The discounted price will be available for the Italian family, just as it is for French families.
In the above cases geo-blocking or other forms of geographically-based differential treatment are only possible in exceptional situations defined in the Regulation, that is, where an EU or national legal requirement obliges the trader to block access to the offered goods or services (e.g. a prohibition to sell alcohol to non-residents).
While traders remain free to accept whatever payment means they want, the Regulation includes a specific provision on non-discrimination within the range of means of payment they accept. It covers situations where differential treatment is a result of the customer's nationality, place of residence or place of establishment, the location of the payment account, the place of establishment of the payment services provider or the place of issue of the payment instrument.
Differential treatment is prohibited if these three conditions are met:
- Payments are made through electronic transactions by credit transfer, direct debit or card-based payment instrument within the same brand and category;
- Authentication requirements are fulfilled, and;
- The payments are in a currency that the trader accepts.
The prohibition of direct or indirect discrimination based on nationality is a fundamental principle of EU law. In particular, in situations not covered by this Regulation, Article 20(2) of the Services Directive (2006/123/EC) can be applicable. According to this provision, traders may only apply differences of treatment based on nationality or place of residence if this is justified by objective criteria. In some cases sector-specific legislation (for instance in the field of transport, or health) may also apply which addresses this issue. In addition, the Regulation leaves the rules of the TFEU unaffected, including its rules on non-discrimination.
6. Is the Regulation applicable to non-audiovisual copyright-protected content services, and audiovisual services?
The provision of (non-audiovisual) copyright protected content services (such as e-books, on-line music, software and videogames) is not subject to the Regulation's prohibition of applying different general conditions of access for reasons related to a customer's nationality, residence or establishment, including by refusing to provide such services to customers from other Member States in the specific cases listed in Article 4. These services, however, remain subject to the Regulation's prohibition to block or limit access to online interfaces on the basis of the nationality, residence or establishment of the customer. Moreover, where cross-border provision of these services takes place, notwithstanding their exclusion from Article 4 of the Regulation, the trader is prevented from discriminating the electronic payment means on the basis of their "nationality".
On the other hand, the Regulation as a whole does not apply to the activities excluded from the scope of the Services Directive. Hence audiovisual services are not within the scope of the Regulation.
The Regulation prescribes a review within 2 years after its entry into force, which will focus on assessing its scope.
The rules of the Regulation apply in principle to both business-to-consumer (B2C) and to business-to-business (B2B) transactions, to the extent that the latter take place on the basis of general conditions of access (hence they are not individually negotiated) and the transaction is for the sole purpose of end use (hence made without the intention to re-sell, transform, process, rent or subcontract).
Each Member State must designate a body or bodies responsible for providing assistance to consumers in the case of a dispute with a trader arising from the application of the Regulation. Such assistance could consist for instance of explaining the consumer's rights, helping consumers to settle a dispute with a trader based in another Member State or explaining consumers whom to contact or what to do if the consumer assistance body itself cannot help.
Member States must designate one or more bodies responsible for the adequate and effective enforcement of the Regulation. Where it comes to relations between traders and consumers, such enforcement is facilitated by the inclusion of the Regulation in the Annex to the Consumer Protection Cooperation Regulation (2006/2004, as revised and replaced by 2017/2394). In addition, businesses and consumers will be able to enforce their rights stemming from the Geo-blocking Regulation on the basis of existing EU and national rules regarding such enforcement.
The Regulation will enter into force on the 20th day after its publication in the Official Journal of the EU. It will apply from 3 December 2018 (that is 9 months after the date of its publication).