How Does Geoblocking Affect Your Online Store?

What is geoblocking?

Geoblocking means restricting access to services and/or products according to the user/customer’s geographic location. Platforms can identify every user’s geographic location using their IP. Identifying this location influences how the platform behaves. It either re-directs users to local websites, simply restricts access to its catalog or modifies the sale price.

What does the prohibition of geoblocking in the EU mean?

Recently, you may have heard about the imminent prohibition of geoblocking by the European Union. And you might not be sure what that means or how it will affect your eCommerce store.

The European Council aims to avoid unfair geoblocking in its member states.

The new regulations will avoid discrimination that affects consumer and company access, price conditions, sales and payments when they purchase goods and services from another EU country.

“Ending undue geoblocking significantly increases online purchasing options and gives eCommerce a major boost. Consumers can choose the best offers in the single market. I wish to thank the Parliament and the Commission for helping the Presidency take another a big step forward towards a single digital market.”

Kadri Simson, Estonian Minister for the Economy and Infrastructure

Another step towards the single digital market

Which products and services does this new regulation affect?

• Consumer goods
• Services:
  • Tickets to performances and leisure parks
  • Hotel accommodation
  • Vehicle rental

Subject to review over the next 2 years, products and services protected by author’s rights, such as eBooks, music, and video games are currently excluded. Financial, audiovisual, transport, health and social services are also excluded.

When is discrimination against consumers prohibited?

This new regulation establishes three cases in which sellers must respect equal access and offer equal terms and conditions for their goods and services:

1. Goods delivered in a Member State in which the seller offers delivery or collection services at locations agreed with the customer.
2. Where digital services are provided:
   1. Cloud services.
   2. Data repositories.
   3. Web hosting.
   4. Firewall provision.
3. When the seller provides services that the customer receives in the country in which the seller operates:
   1. Accommodation.
   2. Sporting events.
   3. Music festivals.
   4. Amusement parks.

No seller will be obliged to deliver goods to customers outside the Member State in which they provide deliveries.

Does geoblocking affect payment systems?

Yes. Payment methods are chosen by the seller. But undue discrimination for reasons of nationality, place of residence or place of establishment is prohibited.

Entry into force

The Regulation was published in the EU Official Journal at the end of March 2018. It will enter into force nine months after publication. This means that it will come into force at the end of December 2018.

Everything clear?

Now you understand:

• The concept.
• The scope of application.
• The cases in which it applies and its effects.
• The date on which it comes into force.

You have the elements you need to know whether it will affect your online store. Apply any necessary adjustments to remove settings that involve undue discrimination against your customers regarding:

• Access.
• Sale price conditions.
• Shipping options.
• Payment methods.

Don’t hesitate to contact us if you are still unsure. At TLG Commerce we will study your case and provide the best advice for your eCommerce.