EU Science Hub

Commission proposes new e-commerce rules to help consumers and companies reap full benefit of Single Market

Person using a tablet with a picture of a shopping trolley on it
May 25 2016

On 25 May 2016, the European Commission tabled a package of measures to allow consumers and companies to buy and sell products and services online more easily and confidently across the EU.

Delivering on its Digital Single Market and Single Market strategies, the European Commission has presented a three-pronged plan to boost e-commerce by tackling geo-blocking, making cross-border parcel delivery more affordable and efficient and promoting customer trust through better protection and enforcement.

JRC study shows beneficial welfare effects of removing geo-blocking

Two new JRC studies have contributed to impact assessment, accompanying the draft regulation. The first report analyses potential welfare effects of policy initiatives to remove geo-blocking practices in the EU Digital Single Market (DSM) and concludes that both consumer welfare and firms profits would increase, by 1.2% and 1.4%, respectively. The report focused on sales of four electronic products (smartphones, tablets, laptops and desktop computers) in 10 EU countries (Belgium, Denmark, France, Germany, Great Britain, Italy, Netherlands, Poland, Slovakia and Spain, which together represent around 85% of the EU-28 markets for the different product categories considered).

Removing geo-blocking restrictions would allow consumers to buy online from the cheapest provider, independently of their respective locations, and access a wider variety of products. This will trigger online cross-border purchases and savings for consumers. These results hold for two different scenarios, one with full removal of geo-blocking and a second one, labelled "shop like a local", that requires shipment via an intermediary.

Geo-blocking in cross-border e-commerce

The second report analysed geo-blocking and concluded that particularly electrical appliances, electronics and computer games are difficult to buy online from another country. The least geo-blocked category is travelling services. The JRC research analysed data collected through a mystery shopping survey (individuals from different countries try to buy from websites in other countries) to analyse the different stages in the online purchasing process and detect the factors that contribute to geo-blocking.

The findings indicate that 63% of cross-border purchase attempts are geo-blocked. Geo-blocking takes place most often at the delivery stage and less at the access stage while larger websites also block access according to the IP address. Geo-blocking is independent of distance, but it will be less important if two countries share language.