On 6th February the European Parliament adopted a regulation to end geo-blocking, obliging online retailers to provide customers with access to goods and services on the same terms and conditions regardless of the customer’s location.
Despite strong arguments and active lobbying efforts in favour of justified geo-blocking, by the Malta Chamber and MBB together with BUSINESSEUROPE and other business stakeholders since January 2016, the regulation shall come into force by the end of 2018.
As more legal certainty is available, the Malta Chamber of Commerce, Enterprise and Industry shall keep members abreast on how to adapt to the regulation.
The new rules shall apply to a wide range of goods and services including physical goods such as furniture and electronics, online services such as cloud services and website hosting as well as entertainment services such as tickets to leisure parks and concerns.
Digital copyrighted content, such as e-books, downloadable music or online games, will not be covered by the new rules for the time being.
The regulation defines three specific situations when there can be no justified reasons for geo-blocking or other discriminations based on nationality, residence or location:
- The sale of goods without physical delivery. Example: A Belgian customer wishes to buy a refrigerator and finds the best deal on a German website. The customer will be entitled to order the product and collect it at the trader's premises or organise delivery himself to his home.
- The sale of electronically supplied services. Example: A Bulgarian consumer wishes to buy hosting services for her website from a Spanish company. She will now have access to the service, can register and buy this service without having to pay additional fees compared to a Spanish consumer.
- The sale of services provided in a specific physical location. Example: An Italian family can buy a trip directly to an amusement park in France without being redirected to an Italian website.
Furthermore, the proposal bans blocking of access to websites and the use of automatic re-routing if the customer has not given prior consent.
The regulation also provides for a non-discrimination rule in payments. While traders remain free to offer whatever payment means they want, the regulation includes a specific provision on non-discrimination within those payment means.
The Regulation does not impose an obligation to sell and does not harmonise prices. It does however address discrimination in access to goods and services in cases where it cannot be objectively justified (e.g. by VAT obligations or different legal requirements).
The new rules will come directly into force after nine months from the publication in the EU Official Journal, to allow in particular small traders to adapt.