The Plenary of the Parliament and the Council of the European Union (“Council”) confirmed the provisional agreement reached on the Geo-blocking Regulation (formally “Regulation preventing geo-blocking and other forms of discrimination based on customer's nationality, place of residence or place of establishment within the EU market”). On 2 March 2018 the Regulation was published in the Official Journal of the EU and will apply from 3 December 2018.
The Regulation is part of the e-commerce package and addresses sales terms discrimination in the online access to goods, electronically supplied services and services provided in a specific physical location where it cannot be objectively justified (e.g. VAT obligations and legal requirements).
The final objective of the Regulation is to grant equal treatment to local customers and online buyers from another Member State. However, and contrary to what was proposed originally by the Commission, under the new rules, online traders are not obliged to deliver their products to the shoppers' country, nor to harmonize access conditions - including sale prices- across the EU. They are merely requested not to discriminate customers on the basis of their nationality, place of residence or place of temporary establishment in the EU when such customers have access to selling websites based in another Member State. Any access ban or any automatic redirection to another website without the consent of the consumer, or any discrimination on payment terms (regarding the use of credit cards from other EU countries, for example) will be prohibited.
In practical terms, this means that it will still be possible to have different websites (let’s say website A and B) formatted and presented to the different audiences in EU country A and EU country B (in language, in tastes, in average sizes, in catalogue, etc. as well as in prices). But it will not be possible for the trader to prevent a customer from country A to access and purchase in the website B, and eventually to benefit from its better conditions or purchase something not available at home. At the same time, the trader is not forced to deliver a product purchased in the website A to country B: the trader may decide that it only delivers locally, in country A; or that free delivery does not apply if delivery must take place in country B. After a very intensive debate, the Regulation will not apply to copyright protected content (e.g. download of music, e-books, online gaming and audio-visual content). However, a review clause requires the Commission to analyze the overall impact of the Regulation two years after its entry into force and assess the possible application of the rules to certain electronically supplied services which offer access to and use of copyrighted works.
Finally, agreements imposing passive sales restrictions which circumvent the requirements set forth above will be automatically void. This provision will only apply from 23 March 2020 to any such clauses concluded before 2 March 2018.