Client Alert: Entry into force of Geoblocking Regulation on 4 December 2018

Sirius Legal has already informed you several times about the new Geoblocking Regulation (Regulation (EU) 2018/302) which the European Commission announced on 23 March last.

With this regulation, the EU wants to tackle discrimination against customers on grounds of nationality or whereabouts in online sales. After all, it is still too often the case that webshops use different price or sales conditions in function of the country from which a potential customer visits their website.

With the Geoblocking Regulation, the EU wants to deal with this shortly and ensure equal treatment of buyers throughout the EU. It is important to know that the new rules enter into force on 4 December 2018.

The European Commission has already announced that in the very short term it will carry out effective checks on webshops throughout Europe on whether or not they comply with a number of basic obligations under this new regulation. The potential fines are high and it is therefore of great importance for online traders who cross border are active to submit their website (s) to a thorough screening, preferably prior to 4 December 2018.

What is geoblocking?

An Italian family buys tickets online for a French amusement park, but has to pay more than the same family living in France. And the only reason for this is that the Italian family wants to make a purchase from a country other than France. If it is up to the European Commission, such unjustified geo-blocking will soon be a thing of the past.

What is in the regulation?

The regulation contains a set of rules that restricts the technical limitation of access for foreign buyers to a website as well as the practical complication or impossibility of making purchases on a website by foreigners.

What is no longer allowed after December 4th

  • Making access to websites technically impossible from another country (pure geo-blocking)
  • Limit or prohibit the access to websites or to the products offered on this website “in any other way”  (this is the case, for example, if a buyer can not enter his address details in the order form because the format of the entry fields does not allow this, more specifically whit the postal codes this  appears to be problematic because they often use a pre-formatted format)
  • Redirecting website visitors to a local version of the website without the prior consent of the data subject
  • The use of price differences based on the origin of the purchase (unless there is objective justification for this)
  • The use of other sales conditions in function of the place of residence or stay of the buyer (unless an objective justification exists)
  • Refusal to sell on the basis of a place of residence or stay (which may limit the delivery to certain areas, but the buyer who is willing to accept the limited delivery options must always be able to purchase)
  • Discriminating buyers on the basis of the offered means of payment (this is the systematic refusal of eg credit cards issued in another country)

Practical tips

Check your website at least on the following points before 4 December:

  • Is your website freely accessible from the entire EU?
  • If you use a redirect, does the visitor have the choice to still stay on the chosen country version (and also to order at the price offered there)?
  • Do your sales conditions contain no unequal conditions in function of the place of residence or stay (price, guarantee, dispute settlement, cool down period, …)
  • Are you sure that your payment solutions do not discriminate in function of the place of issuance of payment cards and / or the domicile or residence of the buyer?
  • Are you sure that your order forms have been set up location neutral and, in particular, allow the local composition of address data in the address fields?

Purpose of the regulation: to avoid discrimination between citizens

With the entry into force of the Regulation, the Commission wishes to prevent traders from discriminating against EU citizens in their (online) purchases based on nationality, place of residence or place of establishment in cross-border transactions. The common thread throughout the regulation is to insure consumers that they can enter into an agreement with a trader in another EU member state under the same conditions as a local customer, allowing different treatment on the basis of objective grounds. This objective justification may consist, for example, of a German trader refusing to sell a certain book to Spanish visitors if the contents of the book were unlawful according to Spanish national regulations.

Prohibition on restrictions on passive sales

The absolute prohibition of contractual restrictions with regard to passive sales is remarkable in the Commission proposal. It will no longer be possible for suppliers on the basis of the new regulation to contractually stipulate for online sales that their distributors may only sell goods and services in certain countries. Such terms will be nul and void. However, the Regulation does provide for some exceptions such as the authorization of the ban on passive sales when a supplier supplies both wholesalers and end users. In such a case, the supplier may prohibit wholesalers from selling to end-users. This with the aim of keeping the different markets separate.

Questions about e-commerce or (online) distribution law in Belgium or the EU?

Bart Van den Brande is happy to help you via info@siriuslegal.be or on 02 721 13 00.