24 October 2018
The European Regulation banning geo-blocking and geo-discrimination will be applicable in all Member States as of 3 December this year, impacting companies' sales strategies in the EU. In this article, after briefly describing the scope of the prohibition of Geo-blocking, we set out six steps which traders can take in preparation for its implementation.
Geo-blocking comprises refusing customers based in another country access to a website or app or redirecting them to a local website. Geo-discrimination is discrimination on the basis of nationality, place of residence or establishment in the context of on or off line transactions. Although the regulation is part of the EU's digital single market strategy it covers both online and off line discrimination.
The Regulation covers four main areas: access to websites and apps, access to goods and services; non-discriminatory payment conditions and agreements restricting of passive sales.
Access to websites
It will no longer be legal for traders to redirect customers to a local website, unless the customer explicitly consents or the limitation of access is necessary to comply with local law.
Access to goods and services
Customers should be allowed to "shop like a local" without discrimination when:
- Buying goods from a business which offers delivery in a member state
- Buying electronically supplied services such as website hosting or the provision of firewalls
- Acquiring services in a physical location within a member state where the trader operates (such as tickets to a sports even or concert)
Traders which accept a specific payment means for locals also have to accept such means of payment from customers from other countries (including credit cards of the same brand issued in another country).
Agreements on passive sales
Agreements which purport to restrict a trader from selling in response to a non-solicited request from a customer and which would oblige the trader to discriminating contrary to the Regulation, are void.
Actions for traders
- Check whether your goods or services fall within the scope of the Regulation
- Check your websites and apps to ensure that they do not redirect customers, unless customers consent
- Establish procedures for checking whether the purchaser is an end user or trader
- Review your strategies in relation to the bundling of goods and services
- Review your payment and delivery conditions
- Review your distribution contracts with traders to check whether they include any restrictions on passive sales which breach the Regulation
We shall discuss these actions in a subsequent article. If, in the meantime, you would like more guidance on how you can ensure that your business is compliant, please contact Sarah Beeston.