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26 June 2018

Are you geo-blocking?

The EU has introduced a new Regulation that comes into force on 3 December 2018 to prevent Geo-blocking.

Geo-blocking involves traders blocking or limiting access to their online interfaces (such as websites) by customers from other countries, or applying different standard terms and conditions of access to their goods and/or services depending on the customer’s nationality, residence or establishment (“Location”).

Geo-blocking applies to any individuals and companies who sell goods and services in any EU country (“traders”). Traders do not need to be resident or established in the EU, so this Regulation will apply to UK companies after Brexit. Customers are both individuals or companies resident or established in the EU and must be purchasing goods or services for their own use (e.g. not for resale).

Blocking or limiting customers’ access to online interfaces on the basis of Location will be prohibited under the Regulation. Redirecting customers will only be allowed if the customer provides explicit consent (which they can withdraw at any time). Blocking, limiting or redirecting (together “Excluding”) will still be acceptable, if necessary to comply with the law, and an explanation is provided to customers.

Excluding customers will never be justified where the customer:

  • Buys goods from a trader who offers delivery within the EU, if the customer collects the goods from the trader (the trader need not deliver to the customer’s member state);
  • Receives electronically supplied services from the trader (e.g. cloud storage); or
  • Receives services at the trader’s location of operation within a member state (e.g. hotel accommodation).

Additionally, from 23 March 2020, Excluding based on passive sales clauses will be automatically void and unenforceable, which will clarify any previous uncertainty around the matter.

The Regulation applies to services offered independently and when bundled together with other services. Any payment means accepted by a trader in one member state, must be accepted across all member states.

Traders are not required to harmonise prices, offers or terms across the EU if any variations relate to factors unrelated to Location.

Several services are carved out from the Regulation, including:

  • Transport;
  • Retail;
  • Financial Services; and
  • Audiovisual Services.

Non-audiovisual, copyright-protected services (such as video games) are also currently excluded, but this will be reviewed in 2020, two years after the Regulation comes into effect.

With less than 6 months to go, traders must be aware of the Regulation and the (potentially extensive) effects it will have on their business. Traders should be reviewing their practises, both online and not, and ensuring they are up to date before the deadline.

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