The EU Geo-Blocking Regulation 2018

November 2018

The EU Geo-Blocking Regulation takes effect on 3 December 2018 and introduces new rules designed to open up markets across the EU and restrict discrimination against customers based on their location – i.e. in another EU member state.

Geo-blocking generally refers to traders denying users located in other member states access to their websites. It can also refer to the situation whereby a website is accessible, but a transaction cannot be completed. This can also apply offline; however, this particular update focuses on our e-commerce templates.

At first glance, the Geo-Blocking Regulation may appear to be quite onerous; however, in many cases the requirements of the Regulation amount to little more than good business practice.

It is also important to note that the Regulation covers cross-border transactions between traders and customers based on general terms and conditions rather than individually negotiated terms or agreements. This means that while it does apply to both B2C and B2B transactions in the same manner, it is not designed to impose restrictions on the negotiation of contracts – something more common in B2B situations.

Make Your Website Accessible Everywhere

An important part of the Regulation prohibits the blocking of access to websites and re-routing (e.g. a German user visits a .co.uk site and is automatically re-routed to the .de version) without consent. This is a common practice and, it might be argued, quite a convenient one in many cases. Nevertheless, the Regulation says otherwise. A key reason behind this is to increase transparency where pricing is concerned. Will the German customer in the example actually want to buy from a trader’s UK store rather than the German store? Probably not; but they might be interested to see how prices compare.

So, Do I Have to Sell Everywhere Now?

No. The Regulation is designed to prevent discrimination; but this should not mean drastic changes to your business model. You are free to decide, in principle, where you operate. In essence, the Regulation prevents you from discriminating against a foreign customer wanting to buy from you under the same conditions as a local one. It is not designed to force you to start offering your goods and services in markets that you didn’t before.

Goods

There is not an obligation to start selling across the EU, and you can still limit your deliveries to the UK. What the Regulation does do is prohibit you from discriminating on the basis of a customer’s nationality, residence, or establishment when selling. If our aforementioned German friend, then, wants to buy your goods via your website, she can; but you do not have to deliver them to Germany if this is not an option you offer. She can come and collect them from your premises (if this is an option you offer), or she can organise delivery herself.

Services (Electronic)

If you provide services electronically (e.g. cloud services or website hosting), customers from other member states are entitled to buy those services in the same way as a local customer. A customer located in Poland, therefore, is just as entitled under the Regulation to use your services as one located in Portsmouth.

Services (Physical)

If your services are of the ‘offline’ or ‘real-world’ variety, the situation is somewhat different. The Regulation does not require you to physically move in order to provide services at the customer’s location.

Digital Content

When it comes to the provision of non-audiovisual copyright-protected content services (e.g. e-books, online music, software, and computer games), the non-discrimination provision of the Regulation – i.e. the obligation to allow customers from other member states to access and benefit from the same offers as local customers, does not apply. Other rules in the Regulation, however, such as the blocking of access to websites and re-routing without the customer’s prior consent (and payment-related discrimination) already apply.

As for audiovisual services, these are excluded from the scope of the Regulation.

Other Exceptions?

A number of other important services are excluded from the scope of the Regulation, including transport and retail financial services.

What About Pricing and Payment Methods?

The purpose of the Regulation is to prevent discrimination, not to regulate pricing. You are therefore free to set different prices, for example, on websites targeting different customer groups. What is important, however, is that the websites in question are accessible to all EU customers and that, as described above, those customers must be able to purchase your goods or services under the same conditions as your local customers.

Similarly, you are not prohibited from charging more for cross-border delivery than you would for local delivery.

As for the type of payment methods you accept, that is largely up to you. The Regulation simply means that you cannot discriminate within the range of payment methods that you accept. If payments are made electronically by credit transfer, direct debit, or card-based payment within the same brand and category as one that you accept; authentication requirements are fulfilled; and the payment is made in a currency that you accept, you cannot discriminate.

What About Consumer Protection Law?

The Geo-Blocking Regulation does not change things here. The applicable law largely depends upon whether a trader is directing their activities at a particular member state. If your business is solely UK-oriented, then, you do not need to suddenly learn 27 other sets of consumer protection laws just in case you get an order from someone in another EU member state.

If, on the other hand, you do direct your activities to another member state (e.g. you have a website with a .de domain name, a German phone number, German content, and everything priced in Euros), you might want to brush up on the consumer protection laws of that member state and have compliant terms and conditions. This is a light-hearted way of saying that when in doubt, it is vital that you seek suitable legal advice.

Updated Website Terms and Conditions Templates

Several of our e-commerce Website Terms and Conditions Templates have been updated in light of the Geo-Blocking Regulation. These are not huge updates designed to make the documents pan-EU in nature not least because one document designed to work with 28 different countries’ laws would be anything but user-friendly!

The updated templates have, however, had a provision removed that previously included wording that referred to UK-only customers. In the case of our sale of goods terms, the option remains to state that you only deliver within the UK; but you should not now expressly refuse to sell to customers outside of the UK. Our updated services terms have received a similar alteration and now, rather than a similar ‘UK customers only’ provision, include an optional clause allowing you to specify the area or areas in which you actually provide your services (where they are of a ‘physical’ or ‘real world’ nature as opposed to electronic services).

While these changes have been made to improve compatibility with the Regulation, it is important to note that they remain designed for UK activities only and as such are written with UK law in mind. Specific laws that may apply in other EU member states are not addressed and it is important to ensure that you are fully aware of, and in compliance with such laws if you specifically direct your activities toward any particular member state other than the UK.

The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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