Factsheet Regulation on unjustified Geo-blocking

The Geo-blocking Regulation¹ (EU) 2018/302 addresses the problem of customers not being able to buy goods and services from traders located in a different Member State for reasons related to their nationality, place of residence or place of establishment. The regulation has direct effect and enters into force on 3 December 2018.

As the Regulation is applicable to all kind of webshops, all ERA Europe members have to assess carefully the regulation and have to consider implementing measures and tools for complying with the regulation before 3 December 2018.

Scope of Regulation - Geo-blocking practices

Geo-blocking refers to practices used by online sellers to restrict online cross-border sales based on nationality, residence or place of establishment.

• Such geo-blocking practices include denying access to websites from other Member States and/or situations where access to a website is granted, but the customer from abroad is prevented from finalising the purchase or is asked to pay with a debit or credit card from a certain country.
• 'Geodiscrimination' also takes place when buying goods and services off-line, e.g. when consumers are physically present at the trader’s location but are either prevented from accessing a product or service or from being offered different conditions due to their nationality or residence. The Regulation lays down directly applicable provisions which aim at preventing these practices in specific situations where there is no objective justification for different treatment based on nationality, residence or place of establishment.

What are the main - ERA Europe- relevant components of the Geo-blocking Regulation?

The Regulation applies to both online and offline sales of goods and services, as well as cases where these two channels are integrated (omni-channel).

The Regulation applies to all traders offering their goods or services to consumers in the EU, regardless of whether they are established in the EU or in a non-EU country. Therefore, traders established in non-EU countries that operate in the EU are therefore subject to this Regulation.

Online marketplaces, where for example goods or services are sold by third parties, are subject to the provisions of the Geo-blocking Regulation when they act as traders within the meaning of the Regulation.

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

• Sale of goods (Article 4)

Customers are entitled to delivery in the Member State where the trader offers delivery in the same way as local customers. Geo-blocking or other forms of geographically-based differential treatment are only possible in exceptional situations defined in the Regulation, that is, where an EU or national legal requirement (in compliance with EU law) obliges the trader to block access to the goods.

• Access to websites (Article 3)

The regulation bans the blocking of access to websites and re-routing without the customer’s prior consent. This increases price transparency by allowing customers to access different national websites.

• Non-discrimination in payments (Article 5)

While traders are free to accept whatever payment means they want, the Regulation includes a specific provision on non-discrimination within the range of the means of payment they accept. It covers situations where differential treatment is a result of the customer's nationality, place of residence or place of establishment, the location of the payment account, the place of establishment of the payment services provider or the place of issue of the payment instrument.

• payments are made by means of electronic transactions by credit transfer, direct debit or a 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.