In our previous article on geo-blocking we suggested a six-step action plan for traders. In this article we describe each of these steps.
STEP 1 Check whether your activities fall within the scope of the Regulation
The Regulation applies - subject to a limited number of exceptions - to your sales to end user customers (consumers and businesses) in the EU on the basis of standard terms and conditions.
The Regulation does not apply to sales to other traders for resale; this would impede the possibility to set up exclusive and selective distribution systems. Nor does it apply to individually negotiated agreements; this would effectively stifle the possibility to negotiate special deals on a one-to-one basis and negatively affect competition.
A number of sectors are exempt from the Regulation including:
- financial services
- private security services and
- audiovisual services (such as access to broadcasts of sports events for which exclusive licenses are granted)
Moreover non-audiovisual electronically supplied services whose main feature is the access to copyright protected works (e-books; software; music streaming; online video games) are excluded from the "shop like a local" principle.
STEP 2 Check your websites and apps to ensure they do not block or redirect customers
If you have several versions of your website you may not redirect customers to their local version without first obtaining the customer's consent. If the customer consents, you may subsequently redirect that customer each time, unless they withdraw their consent. It must be possible for the customer to withdraw its consent and the original website should remain accessible to the customer.
Two additional tips:
- Make sure you keep a record of consents given in a way which complies with privacy legislation.
- Blocking access or redirecting customer is justified if it is required to comply with local law.
STEP 3 Establish procedures for checking whether the purchaser is an end user or trader
The Regulation does not oblige you to supply goods or services to a customer which intends to resell the goods or services. You may establish practices which prevent undertakings from purchasing quantities exceeding their internal needs, taking account of their size. Consider limiting maximum volumes and the number of transactions.
STEP 4 Review your strategies in relation to the bundling of goods and services
If goods or services falling outside the scope of the Regulation are sold as a bundle with goods or services which fall within scope, the bundle will be subject to the ban on geo-discrimination, unless the good or services are also provided separately. For example, while transport is excluded, a package holiday would be covered unless the hotel accommodation (and any other elements of the package which fall under the Regulation) is also offered separately.
STEP 5 Review your payment and delivery conditions
You are free to decide what means of payment you accept but are then obliged to accept such means of payment from any customer in the EU. More concretely: if you accept a credit card of a particular brand, Visa or Mastercard, issued by a Dutch bank you are obliged to accept such credit card of the same brand issued by any bank in the EU. You are not obliged to accept all brands nor to accept both credit and debit cards of the same brand.
Similarly if you offer delivery of your goods to Dutch customers in the Netherlands. You are obliged to offer delivery in the Netherlands to non-Dutch customers. You are not obliged to deliver to other countries. However, if you do deliver to other countries you are not permitted to refuse to provide such service on the basis of the nationality of the customer.
STEP 6 Review you distribution agreements with traders to ensure that they do not include any restrictions on passive sales which breach the Regulation
If you have been well advised as concerns your distribution contracts, you are unlikely to have any clauses which prohibit passive sales (in response to unsolicited requests) to end users, as this would be contrary to the competition rules. In some limited circumstances (for example when the agreement is between two group companies) such restrictions are permitted under competition rules. They will as of 3 December be prohibited by the Regulation. Check whether your distribution agreements require the trader to discriminate in the case of unsolicited requests from end users and remove any such clauses.
If you would like more specific guidance on how you can ensure that your business is compliant, please contact Sarah Beeston.