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EU ends unjustified geoblocking

What has happened?

The European Union will end unjustified geoblocking for consumers wishing to buy products or services online within the EU before the end of next year.

What does this mean?

The European Parliament, the Council and the Commission have reached an agreement whereby consumers will be able to buy goods and services online from any EU country.

The EU expects that the new rules will boost e-commerce for the benefit of consumers and businesses.

In effect, people in the EU will now be able to buy products online, rent a car or get their concert tickets across borders on the same terms as are available to people in other EU member states.

They will no longer be asked to pay with a debit or credit card issued in another country.

Companies will also no longer be able to redirect consumers to country-specific websites without their consent.

Vice-President Andrus Ansip, who is responsible for the Digital Single Market, said: “This is excellent news for consumers. Europeans will be able to choose from which website they wish to buy, without being blocked or rerouted. This will be a reality by Christmas next year.”

The EU sees the ban on geoblocking as an upgrade of the Single Market to the digital world as consumers will be able to access a range of offers regardless of whether they enter a shop in another country or whether they shop online.

The next element the EU will look at is bringing down prices of cross-border parcel delivery, which it believes still discourage people from buying and selling products across the EU.

Some consumers will welcome this development but the new rules might add complexity for retailers and service providers not used to dealing with customers from other countries.

However, the new rules do not impose an obligation to sell and do not harmonise prices either.

They address only discrimination in access to goods and services in cases where it cannot be objectively justified (for example, by VAT obligations or different legal requirements).

The proposal also does not include copyrighted material, such as e-books, music or films.

Commenting on the development, Hogan Lovells corporate senior associate Oliver Wilson said:

“The core of this proposal is to end discrimination based on online customers’ country of residence, and therefore falls squarely within the Commission’s goal of furthering the Digital Single Market. But there are certain key limitations in the regulation that may limit its practical impact – in particular the regulation does not force retailers to deliver cross-border, so consumers will need to be prepared to hop across the border to collect goods or arrange their own delivery. And in a significant win for the content industry, the Council seems to have successfully fended off attempts by the Parliament to bring access to copyright works within the scope of the regulation.”

The new rules are expected to come into force by the end of next year.