Today, the European Parliament has approved the proposal for a Regulation that would ban unjustified geo-blocking in e-commerce. The proposal is not yet law, as the Council still needs to approve it. However, this is the very text on which the Estonian presidency and the European Parliament reached an agreement last November; the new “Geo-blocking Regulation” is thus expected to see the light in the next couple of months.

Geo-blocking is the (rather common) commercial practice of preventing online customers from purchasing products or services from a website based in another country than that where the merchant is established.

Under the new rules, geo-blocking practices based on customers’ nationality, place of residence or place of establishment will be forbidden.

In particular, as the Regulation proposal indicates, traders will not be able to discriminate between customers in these three cases:

“a)    where the trader sells goods and those goods are not delivered cross-border to the Member State of the customer by the trader or on his or her behalf;

b)   where the trader provides electronically supplied services, other than services the main feature of which is the provision of access to and use of copyright protected works or other protected subject matter;

c)    where the trader provides services, other than those covered by point (b), and those services are supplied to the customer in the premises of the trader or in a physical location where the trader operates, in a Member State other than that of which the customer is a national or in which the customer has the place of residence or the place of establishment”.

We can expect a significant impact of the proposed rules on the supply of digital services and on e-commerce sales.

As indicated by the European Commission, traders will not be obliged to deliver goods to customers outside the EU state where they offer delivery:

However, that prohibition of discrimination with respect to access to online interfaces should not be understood as creating an obligation for the trader to engage in commercial transactions with customers.

Merchants will also be prevented from blocking or limiting customer access to their online interface for reasons related to the nationality, place of residence or place of establishment of the customer. In general, they will not be allowed to redirect customers to a version of their online interface different from the online interface the customer has tried to access (unless the customer has given their explicit consent prior to the redirection; but even in that case, the original version of the online interface should remain easily accessible for that customer).

Unjustified discrimination of customers in relation to payment methods will also be unlawful and traders will not be allowed to apply different payment conditions based on the customer’s nationality, place of residence or place of establishment.

The new rules will not apply to customers purchasing a good or a service for resale, as in the case of selective and exclusive distribution, subject to compliance with the rules on competition.