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In an extension of its strategy for creating a single digital market, on 27 February 2018 the European legislator adopted Regulation 2018/302, which aims to remove obstacles to electronic trade by prohibiting unjustified geographical blocking or “geo-blocking” and other forms of discrimination based on the nationality, place of residence or place of establishment of clients. This Regulation came into force on 22 March and will be applicable from 3 December 2018.
In a previous publication, we announced the adoption of Regulation 2017/1128 on cross-border portability of on-line content services in the internal market, which was aimed at expanding the portability of on-line media services and making digital content accessible in a Member State other than that in which it was purchased.
Both of the aforementioned regulations represent a significant step forward for the consumer, who, from now on, will be presented with a wider range of possibilities. However, these rules have different aims. Below, we describe in brief the subjects concerned and their consequences for the consumer.
1. The end of geo-blocking and other forms of discrimination based on nationality, place of residence or place of establishment
According to European Union figures, only 15 % of Europeans buy from on-line shops located in a different Member State. One of the reasons suggested for this is the geographical restriction practised by some traders.
Where this practice is applied, consumers wishing to gain access to products and services located on a website of another Member State may find themselves limited or even refused access to the said site or even prohibited from making purchases, merely on the basis of their place of connection or the payment method used.
Indeed, there are numerous cases of persons attempting to purchase an item on a foreign website and finding themselves being redirected to the site of the Belgian dealer of the same brand, but with a completely different range of products to that desired. Others had their payment method rejected due to using a credit card issued by another Member State, or were even prevented from connecting to the foreign site due to living abroad or because of their place of connection.
Regulation 2018/302 removes these obstacles by making it compulsory for traders to provide identical access to their products and services for all European citizens irrespective of their place of connection, in the following three cases:
- Where the goods sold by the trader are delivered to a Member State for which the trader offers delivery, or are picked up at a place agreed with the client (with the result that, for instance, the purchaser will have to pick up an article purchased at an address in the seller’s Member State or at a location agreed by the seller and the purchaser);
- Where the trader provides electronically supplied services, such as cloud services, data warehousing services, website hosting and the provision of firewalls, for which no physical delivery takes place;
- Where the trader offers on-line services, such as hotel accommodation, sports events, car rental, and entrance tickets for music festivals or leisure parks, which must be received by the client in the country in which the trader conducts his activities which is different to that of the purchaser.
Beware, these rules do not include an obligation for the trader to harmonise prices. On the contrary, the trader is free to offer different terms and conditions and prices on his different web sites. A well-informed consumer wishing to book his holiday with an on-line travel agent will, for instance, be obliged to compare websites to find the best price.
We should also mention that this legal text does not apply to all on-line services. On-line shops will not be obliged to deliver goods to clients outside the Member State for which they provide delivery.
Nor does it cover digital content protected by copyright, such as on-line music streaming services, e-books and on-demand films. Which means that it will not be possible for you, as a resident of Belgium, to access offers or content reserved by Spotify or Netflix for, for instance, its French subscribers. In any case, the European Commission will be looking at the possibility of including this content in the Regulation.
Finally, traders active in public services, such as financial and transport services, and healthcare and social services, retain the possibility to limit access to them.
2. The portability of digital services throughout the European Union
In the meantime, from 1st April 2018 consumers who have paid for digital services in their country of origin will be able to access them when travelling in a different Member State.
In concrete terms, if a Belgian consumer subscribes to an on-line distribution service for films and TV series such as Netflix, he will be able to access the films and TV series available in Belgium while on holiday in Croatia or during a business trip to Denmark, without restriction and at no cost.
However, this does not apply to on-line content services supplied free of charge. Indeed, suppliers of free content will be able to choose whether to offer portability of their content.
Suppliers of free content will be able to choose whether to offer portability of their content
At any event, if the supplier must (or chooses to) offer the portability of his content, he will be obliged to verify the Member State of residence of subscribers, using information such as payment details, payment of an audio-visual license fee, the existence of a telephone or internet subscription agreement, IP address checks or subscriber’s declaration of address, and this, in compliance with the rules relating to data protection. If the subscriber is unable to prove his residence of a Member State, the supplier will be authorised to terminate his access to the on-line service. By way of exception, holders of copyright will be able to authorise use of their content without being obliged to verify the subscriber’s place of residence.
Please also note that portability is only foreseen for temporary stays. As mentioned above, these new rules do not permit you, as a Belgian citizen, to access or subscribe to content reserved for residents of another Member State.