7 important questions about Geo-blocking
The Geoblocking Regulation prohibits any discrimination against consumers within the European Union when making cross-border purchases on the basis of nationality or residence. It applies to purchases on the internet as well as offline transactions in conventional trade and also to most types of commercially offered services. The purpose: Consumers should be able to shop under the same conditions throughout the EU and on an equal footing in the internal market. Transaction costs and administrative burdens will be reduced, and legal certainty will be improved for both contracting parties - customers and businesses alike.
1. Geoblocking regulation, what is that?
"Geo-discrimination" can also occur when one wants to shop "offline". In this case, traders offer the purchase of a product or service in a shop only under different conditions than locals, or refuse to sell it altogether.
The regulation is intended to give consumers and businesses more options within the European Single Market. It prevents interested customers from not being able to buy products or services from traders in other member states because of their nationality or place of residence, i.e. they are discriminated against when trying to buy at the best prices or conditions.
2. What is exempt from the geoblocking regulation?
The Geoblocking Regulation does not apply to some products and services (see DIRECTIVE 2006/123/EC Art.2 para.2 - Services Directive). For these, other EU rules apply, which regulate consumer protection rights and obligations of businesses.
- Transport services: Here, the EU's passenger and passenger rights apply, each of which is regulated for rail, bus, ship and air (see our "Travel" section). However, the geoblocking ban applies to car rental!
- Financial services
- Private security services
- Notaries and bailiffs, if appointed by the state
- Audio-visual content: These are subject to, among other things, their own regulation on online portability. (e.g. streaming)
- Micro-enterprises: If an SME is nationally exempt from VAT - i.e. up to an annual turnover of no more than €30,000 net.
- Health services: whether provided by publicly or privately organised institutions
- Certain social services: e.g. childcare and other state-organised or commissioned assistance to persons in need and other non-economic services of general interest without economic consideration.
3. How does the Geoblocking Regulation regulate access to online offers?
The regulation prohibits consumers from being denied access to a website. They may also not be redirected to another website without having explicitly agreed to this beforehand. This increases price transparency, as it makes it possible to compare the different national websites of a provider.
Example: An Irish consumer wants to access the Italian website of a fashion shop. Although she types in the URL of the Italian site, she is redirected to the Irish version. After the regulation comes into force, the consumer must explicitly agree to such redirection. Even after that, the website she originally accessed must still be easily accessible to her.
Suppliers may offer their goods and services to different customer groups or in different countries at different prices and conditions. They may also address different customer groups via different websites in the respective countries and in different languages. BUT: If someone from another EU country wants to order via the domestic website, he or she must be able to do so at the same prices and conditions as the locals.
4. How about access to products and services?
The Regulation defines specific situations where there cannot be justified grounds 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 products and services as nationals. These situations are:
- Sale of products without postal delivery
Problem: Someone wants to buy a product that is not delivered to her or his home country.
Rule: The desired product must be sold under the same conditions as to a local customer if the consumer
... has ordered the product to an address in an EU member state to which delivery is offered.
... collects the goods himself or herself, or a shipping company commissioned by him or her, at a place where the trader:in offers collection according to the GTC. This can be a branch 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 there and pick it up on his own, or order a delivery service to deliver it.
- Sale of electronically delivered services
A client wishes to purchase electronically delivered services, such as cloud services, data warehousing or website hosting from a company located in another Member State. They receive the same conditions as the company's domestic customers.
Example: A Polish consumer wants to buy a hosting service for her website from a Spanish trader. Through the regulation she has the necessary access, can register and purchase the service without paying additional fees.
- Sale of services provided at a specific physical location
Someone orders a service that is provided at the premises of a company or at a place where the company operates. It is important that it takes place in a Member State other than where the customer lives. This category includes services such as concert tickets and rental cars. In this situation, too, the clientele must not be treated differently from local customers.
Example: An Italian family visits a French amusement park and wants to take advantage of the family discount on tickets. This will be available for the Italian family as well as for French ones.
Example: An Austrian consumer wants to book a package holiday. On the German website of a tour operator, he finds a great offer that is not available on the Austrian version. He can book the trip via the German website.
In the cases described above, geo-blocking and other forms of differential treatment based on geography are only allowed in exceptional situations, which are also defined by the regulation. There must be national or European legal obligations on the basis of which a provider must restrict access to the offer (e.g. the prohibition to sell alcohol to tourists).
Note: Even though the principle of equal treatment applies, one should not confuse the fact that companies are allowed to charge different fees depending on the place of delivery!
5. Discrimination in payment
Traders can still decide for themselves which payment methods they want to accept. However, the regulation contains certain provisions against discrimination on the basis of a customer's nationality or place of residence, the location of their bank or payment service, or the place where the debit or credit card was issued.
Differential treatment is prohibited if the following three conditions are met:
- Payment is made through an electronic transaction with the same brand and in the same category as required by the provider company (e.g. credit card payment with Visa, bank transfer).
- Requirements for authentication are met
- Payment is made in a currency accepted by the provider company
Example: A French customer wants to buy from a German online shop that offers, among other things, payment by bank transfer. Thanks to the new regulation, the consumer can pay the amount from his French bank account without any problems. The merchant is not allowed to require that the payment must come from a German account.
6. Who helps if traders do not follow the rules?
Each Member State shall establish at least one body to assist consumers in such disputes. It informs consumers about their rights, intervenes with the company in the other member state or refers them to other institutions if the case cannot be solved directly. In Austria, the European Consumer Centre has been entrusted with this task. You can submit your complaint through our usual channels (see contact).
7. How will the Geoblocking Regulation be enforced?
The enforcement authorities are of particular importance in the enforcement of the Geoblocking Regulation. In Austria, the district administrative authorities (Bezirkshauptmannschaften, in cities with their own statute the mayor or the magistrates - e.g. in Vienna the Magistrate of the City of Vienna) are provided for violations of the Geoblocking Regulation. The Geoblocking Ordinance is also part of the Consumer Authorities Cooperation Act (VBKG). The consumer authority responsible for this in Austria is the Federal Office of Metrology and Surveying (BEV); it can initiate proceedings and penalise companies.