Geo-blocking prohibited as from 4 December 2018

Analyse

From 4 December 2018 on cross-border online sales, no discrimination regarding sales or payment conditions and prices will be possible based on nationality, place of residence or location. The geo-blocking regulation then came into force.

For a detailed explanation of this subject, we refer to previous articles on our website, which you can consult by clicking here and here.

1. What goods and services are involved?

  • goods delivered in a Member State to which the trader offers delivery or are collected at a location agreed with the customer;
  • electronically supplied services such as cloud services, data storage and website hosting;
  • services such as hotel accommodation and car rental, which are received by the customer in the country where the trader is active.

2. Offering goods and services through your website? What should you take into account?

If you as a trader sell goods or services via your website, an app or any other online interface, you should check whether:

  • It is freely accessible from all EU member states;
  • Your sales conditions do not differ depending on the nationality, place of residence or location (except if there is an objective justification for this);
  • the prices do not differ depending on nationality, place of residence or location (unless there is an objective justification for this);
  • the payment options do not differ depending on nationality, residence or location;
  • It is possible to fill in your order form from any EU Member State (eg enough boxes to fill in post and phone number);
  • your website, if it leads to another version of the website than the one that the customer had chosen, still offers the chance to stay on the chosen website or return to it;
  • your website refuses to sell to buyers from other member states

An exception is made to this in case the blocking or limitation of access or transit is necessary to ensure compliance with a legal requirement laid down in EU law or in the law of a Member State in accordance with EU law, where you are operating. In that case, you must explain clearly and precisely why this is necessary. This explanation must be provided in the language of the website that the customer first tried to access.

3. Restrictions prohibited in case of passive sales

In competition law, a distinction is made between active and passive sales. There is active sales when retailers are actively targeting customers buyers and passive sales when sales take place in response to an unsolicited order.

The right of traders to limit active sales is not affected. This is part of the commercial freedom.

The regulation, however, prohibits the imposition of restrictions in the case of passive sales. For example, in case of online sales, its distributors can no longer be imposed to deliver goods and services only in certain countries. Such contractual terms shall be automatically void.

4. Exceptions

Traders remain entitled to choose not to deliver their goods and services outside their own Member State where they are active. It goes without saying that no trader should be obliged to deliver goods across borders in another Member State if he does not otherwise offer his customers the possibility of such delivery.

Traders will continue to have the right to offer goods or services in different Member States or to certain groups of customers, by means of targeted offers and different general conditions of access, including through the setting up country-specific websites, when a customer wishes to enjoy these offers and general access conditions, provided that there is no discrimination based on nationality, place of residence or place of establishment.

Access conditions for other reasons such as membership of a certain association or contributions made to the trader are also allowed as long as they are not related to nationality, place of residence or place of establishment.

Traders are still free to offer, on a non-discriminatory basis, different conditions, including different prices, in different points of sale, such as shops and websites, or to make specific offers only to a specific territory within a Member State.

Services related to copyright-protected content or works in an intangible form - such as music streaming services and e-books are excluded from the scope of the regulation. But this will be subject to a review by the European Commission.

Other services such as financial and audio-visual services, transport, health care and social services are also excluded.

Would you like to learn more about this subject?

Contact our experts or telephone +32 (0)2 747 40 07
Alain De Jonge

Alain De Jonge

Partner
Leo Peeters

Leo Peeters

Partner
Toon Delie

Toon Delie

Senior Associate