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7 important questions about Geo-blocking

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New regulation coming on December 3rd, 2018

1. What is the new Geo-blocking regulation?

The Geo-blocking regulation comes into force EU-wide on December 3rd, 2018. She prohibits discrimination of consumers based on their nationality or place of residence when shopping cross-border – online or offline.

Geo-blocking describes the following practices of online traders:

  • Consumers are denied access to websites
  • Consumers can access a website, but can’t purchase the products
  • Consumers can only pay with the debit card or credit card of a certain country

"Geo-discrimination" can also happen when consumers shop "offline" and a trader at his premises refuses to sell his products or services to them or only under different circumstances than those for local customers.

The Geo-blocking regulation should provide more opportunities to consumers and traders within the European single market. It should prevent that (potential) consumers are unable to purchase goods or services from traders due to their nationality or place of residence, 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.

2. What are the exceptions of the Geo-blocking regulation?

The Geo-blocking regulation is not applicable to some goods and services. For those, other EU rules apply which regulate the rights of consumers and duties of traders.

  • Transport services: Those are covered by the passenger rights regulations of the EU, setting respective rules for travels by ship, rail, air, bus and coach (read more at our section "Travel").
  • Financial services
  • Audio-visual content: Those are regulated by e.g. the regulation regarding online portability.
  • Small companies: with a maximum annual turnover of 30.000 Euro

3. How does the Geo-blocking regulation affect access to websites and other online interfaces?

According to the regulation, blocking the access to a website for a consumer is prohibited. Furthermore, re-routing to another website without the prior explicit consent of the consumer is also forbidden. That improves price transparency as the consumer is able to compare the various national websites of the trader.

Example: An Irish consumer wants to access the Italian website of a fashion trader. Even though she enters the URL of the Italian site, she is automatically rerouted to the Irish version. After the entry into force of the regulation, the consumer’s explicit consent will be required for such redirections and the prior website of her choice should remain easily accessible to her.

4. How does the Geo-blocking regulation affect access to goods and services?

The regulation defines specific situations where there can be no objective reasons for Geo-blocking or other forms of discrimination based on nationality, place of residence or place of establishment. In those situations, consumers from another member state will have the same access to products and services as local customers.

Those situations are:

  1. Sale of goods without physical delivery

    A consumer wants to purchase a product at a trader who doesn’t deliver to his place of residence. The trader must sell him the desired product at the same conditions as a local customer if:
    ... the consumer orders the goods to an address in an EU Member State to which the trader offers delivery.
    ... the consumer himself, or a shipping company commissioned by him, collects the goods at a place where the trader offers collection in accordance with his general terms and conditions. This can be a store or a warehouse of the trader.

    Example: A Belgian consumer wants to buy a camera. He finds the best offer on a German website. He can buy the camera and pick it up at the premises of the trader. Or he orders a delivery service to pick it up and/or deliver it to him.
  2. Sale of electronically supplied services

    A consumer wants to order electronically supplied services like e.g. cloud services, data warehousing or website hosting, at a trader who is situated in another EU member state. He can do so to the same conditions as the local customers of the trader.

    Example: A Danish consumer wants to buy a hosting service for her website from a Spanish trader. Due to the new regulation, she has the necessary access, can register and purchase the service without paying any extra fees.
  3. Sale of services provided in a specific physical location

    A consumer orders a service that is provided in the premises of the trader or at a location where the trader is active – those premises are located in another member state than that of the consumer. This category covers services such as concert tickets, car hire or rental of summer accommodations. The consumer is entitled to equal treatment.

    Example: An Italian family wants to visit a French theme park and wishes to book the tickets with the advertised family discount. The discounted price will be available for the Italian family, just as it is for French families.
    Example: An Austrian consumer wants to book a package travel. He finds a great offer on the German website of the tour operator which is not available on the Austrian version. He is able to book the package on the German website.

In the cases described above, Geo-blocking and other forms of differential treatment based on geographical circumstances are only allowed in exceptional situations that are defined in the regulation as well. There have to be binding national or European legal duties that oblige the trader to limit or block access to his goods and services (e.g. a prohibition to sell alcohol to non-residents).

5. How does the Geo-blocking regulation tackle discriminations related to payment?

Traders can still decide which methods of payment they want to accept. Nevertheless, the regulation contains specific rules against discriminations based on the nationality or place of residence of the consumer, the place of establishment of his bank or other payment services, the location of the payment account or the place of issue of the payment instrument.

Differential treatment is prohibited if the following three conditions are fulfilled:

  • 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.

Example: A French consumer wants to buy goods from a German web shop that offers payment via direct debit. Thanks to the regulation, the consumer can transfer the money without any problems from his French bank account. The trader can’t request a payment from a German bank account.

6. How will consumers be supported in case of disputes with a trader who doesn’t comply with the Geo-blocking regulation?

Each member state establishes at least one body that supports consumers who face respective disputes with traders. They will advise consumers about their rights, intervene at the trader in another member state or forwards the consumer to other bodies if the case can’t be resolved directly. In Austria, the European Consumer Centre (ECC) has been given this task. You can submit your complaint through our usual channels (see Contact).

7. How will the Geo-blocking regulation be enforced?

Each member state designated at least one body in charge of the adequate and effective enforcement of the Geo-blocking regulation. In Austria, it is the Federal Competition Authority.

Source: https://ec.europa.eu/digital-single-market/en/faq/geo-blocking

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