What You Need to Know About the Geo-Blocking Regulation
On December 3rd 2018 the Geo-blocking Regulation (EU 2018/302) came into effect. This regulation is part of a series of new rules on e-commerce aimed to boost cross border online sales in the EU. Webshops are no longer allowed to block potential buyers from a specific country or location in the EU.
Justified and Unjustified Geo-Blocking
Customers within the EU, irrespective of their place of residence or place of business, must have access to the website of their choice. Even if this webshop does not focus its activities on the country where the customer is living or is doing business.
A retailer is not obliged to deliver to customers in all EU countries. After all, delivery in certain countries may be complicated due to shipping costs, infrastructure or tax regulations.
However, an online retailer should accept customers who are prepared to pick up goods or services in a delivery area supported by the retailer.
The Most Important Rules
Webshop customers can be both consumers and business buyers (b2b) who do not purchase the goods for resale. The following (non-detailed) rules apply:
Customers must have access to every webshop within the EU.
Automatic forwarding to a local website is only allowed after explicit consent of the customer.
Customers must always be able to purchase all goods or services offered on a website within the EU regardless of their nationality, place of residence or place of business.
Customers may use any payment method that the web store offers as long as payment is made in a currency accepted by the webshop.
Customers located outside the delivery area of the merchant must be able to purchase the products or services at the same prices and conditions as local customers.
However, the customer must be prepared to pick up the goods or services in a different country if he/she is located outside the supplier’s delivery area.
Customers from other countries have the same rights as local customers.
Rules for Merchants
If you are a merchant, keep in mind:
You may not refuse customers based on nationality, place of residence or place of business.
You must offer all customers the same prices and conditions, even if they are located outside your delivery area.
However, you are not required to deliver outside your delivery area.
You must communicate clearly about your delivery area.
If you suspect fraud, you may ask for proof of payment before you deliver the products or services.
You are not allowed to adjust prices automatically based on the location or IP address of the customer.
But you are allowed to ask different prices and conditions on other websites or sales channels.
Customers should pay the VAT of the country where delivery takes place.
You are allowed to decide which payment methods to offer, but you may not refuse the payment method chosen by the customer because of the location or bank.
You are not held responsible for product compliance outside your delivery area. If your product does not have e.g. the right labels, voltage or safety instructions in a certain country outside your delivery area. you cannot be held responsible.
Sanctions for Not Complying to Geo-Blocking Regulation
Until now it is very unclear what the risks are if you do not comply to the Regulation. The Regulation itself does not indicate specific sanctions. Each EU member state is to decide what sanctions are to be imposed for breach of the Regulation. The European Commission will keep an overview of relevant sanctions and enforcement measures.
This article is not an in-depth analysis of the Geo-blocking regulation. Please seek professional legal advice if you have any legal questions or concerns.