Geo-blocking: cross-border online provision of goods and services must comply with new EU rules – don’t get caught out

Atiq Bhagwan | Manager | EY Law | +44 2079 800 717 | atiq.bhagwan@uk.ey.com

 

Geo-blocking is the practice of blocking or limiting a customer’s access to aspects of a trader’s website on the basis of geographical factors.

Geo-blocking is used by many online businesses as a key method to limit access to their goods or services by customers in particular locations.

In December 2018, a new Regulation came into effect across the EU with the aim of preventing unjustified geo-blocking. The European Commission hopes that the Regulation will strengthen its Digital Single Market Strategy.

The Regulation

The Regulation applies to online traders who provide goods and/or services across borders within the EU. Whilst certain types of geo-blocking are allowed (i.e., in relation to audio visual services and retail finance), the Regulation prohibits three types of “unjustified” geo-blocking:

  1. Access to online interfaces (e.g., a website or app)

Traders must not block or limit a customer’s access to their online interface because of that customer’s nationality, place of residence or place of establishment.

For example, geo-blocking of an online interface would occur if an English customer tried to access the French version of a website but, without being given a choice, was automatically redirected to the English website.

  • Access to goods or services

Traders must not block access to goods or services where:

  • the trader already offers delivery or collection services within a Member State;
  • the goods or services are electronically received (e.g. cloud computing); or
  • the services are to be provided by the trader within the Member State in which they operate (e.g. hotel or car rental).
  • Non-discrimination for reasons related to payments.

Traders are free to accept whatever payment methods they prefer but must not “geo-discriminate” and provide differential treatment to customers located in different Member States.

For example, if a trader accepts credit cards from a certain payment brand and category (i.e., a Visa debit card), they must accept all cards from that payment brand and category irrespective of the country of issue of that card.

Enforcement

The Regulation allows each Member State to designate a body responsible for its enforcement and to establish sanctions for infringements.

What does this mean for you?

If you are an online business which currently limits access to your goods/services based on where a customer is located, you should review your processes and make any necessary changes as soon as possible.

How we can help.

Our Digital Law team help businesses with all regulatory and contractual matters regarding online trading, including drafting and reviewing terms and conditions, privacy policies, data protection documentation and GDPR-compliance and compliance with relevant consumer protection law.

We can help you assess whether you are affected by the current European laws prohibiting geo-blocking or we can review your online interfaces and provision of cross-border goods or services with the aim of helping you become compliant with the new Regulation.