European Union: New Rules Prohibit Unjustified Geo-Blocking

(Dec. 19, 2018) On December 3, 2018, new rules to prevent unjustified geo-blocking and other forms of discrimination based on nationality, place of residence, or place of establishment took effect in the European Union (EU). (Regulation (EU) 2018/302 of the European Parliament and of the Council of 28 February 2018 on Addressing Unjustified Geo-Blocking and Other Forms of Discrimination Based on Customers’ Nationality, Place of Residence or Place of Establishment Within the Internal Market and Amending Regulations (EC) No 2006/2004 and (EU) 2017/2394 and Directive 2009/22/EC (Geo-Blocking Regulation), 2018 O.J. (LI 60) 1, EUR-Lex website.) “Geo-blocking” refers to practices “where traders operating in one Member State block or limit access to their online interfaces, such as websites and apps, by customers from other Member States wishing to engage in cross-border transactions.” (Geo-Blocking Regulation, recital 1.) The Geo-Blocking Regulation is part of a series of new rules on e-commerce to implement the Digital Single Market Strategy of the EU Commission, among them rules on cross-border parcel deliveries, payments, and VAT. (European Commission, New EU Rules on E-Commerce (last updated Dec. 5, 2018).) The Commission will review the overall impact as well as the scope of the Geo-Blocking Regulation by March 23, 2020. (Geo-Blocking Regulation art. 9.)

Content

The Geo-Blocking Regulation prohibits traders from applying different general conditions of access to goods and services to consumers for reasons related to the consumer’s nationality, place of residence, or place of establishment in the following three situations:

  • The sale of goods without physical delivery;
  • The sale of electronically supplied services;
  • The sale of services provided in a specific physical location. (Id. art. 4, para. 1.)

Furthermore, the Geo-Blocking Regulation prohibits traders from blocking or limiting a consumer’s access to the trader’s website or app and automatically rerouting the consumer to a different version of the trader’s online presence. (Id. art. 3.)

Finally, the Geo-Blocking Regulation contains rules on payment discrimination. (Id. art. 5.) Traders are prohibited from obligating a consumer to pay with a debit or credit card issued in a certain country. (Id. art. 5, para. 1.) However, they remain free to decide which brands of cards and means of payment to accept in general and may request nondiscriminatory charges for certain payment instruments. (Id. art. 5, para. 3; recital 32.)

Excluded from the scope of the Geo-Blocking Regulation are transport services, retail financial services, and audiovisual services, which are addressed in sector-specific legislation, as well as purely internal situations within one Member State. (Id. art. 1, paras. 2, 3.)

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