A political agreement was reached between the European Parliament, the Council and the Commission to ban unjustified discrimination among consumers.
European consumers are currently not being treated equally, as, often, when they try to shop online from another EU Member State, they are either denied access to the selling site or are re-routed to another website.
This discrimination is applied according to the consumer’s geographical location, hence the name ‘geo blocking’. To diminish or at least to try and limit these injustices, new rules banning unjustified geo blocking will come into force by the end of this year. These regulations will give European consumers equal possibilities by giving them access to any website they wish to buy from without the risk of being blocked or re-routed.
The new rules address three situations of online shopping, where it is no longer acceptable for the trader to deny access to the product or service offered for sale or to impose different terms and conditions of sale according to the EU Member State consumers reside in.
The first of these situations is when goods are offered for sale without physical delivery. EU consumers may shop around for the best deals of the product they need to purchase and, once they find such a product, they should be allowed to order it and collect it from the trader’s premises or organise delivery to their home.
The second situation concerns the sale of electronically supplied services, some examples of which are software products, website hosting, electronic publications, online subscription to publications and other similar digital products.
The new regulations stipulate that when a European consumer decides to purchase such a service from another EU Member State, they should be allowed to buy such services without having to pay more fees than consumers residing in the same country where the service provider operates from.
The third scenario concerns situations where the trader provides services in a physical location that is different to the country where the consumer resides. The new rules prohibit these traders from applying different conditions of access to these services which conditions are solely based on the consumer’s place of residence.
Such services usually concern hotel accommodation, sport events, car rental, and entry tickets to music festivals or leisure parks. Hence, to give an example, an Italian family can buy a trip directly to an amusement park in France without being redirected to an Italian website.
It is important to point out that the new regulations do not impose an obligation to sell and do not harmonise prices. What these regulations address is discrimination in access to goods and services in cases where it cannot be objectively justified.
The need for these new rules stems from findings of a European Commission survey. Sixty-three per cent of the websites assessed in this survey applied geo blocking practices. The same survey shows that in 2015, less than 40 per cent of websites allowed consumers from a different member state to complete a purchase. Such restrictions of online transactions do not only negatively impact companies’ revenues but also result in less choice for consumers.
Odette Vella is director, Information, Education and Research Directorate, Office for Consumer Affairs, Malta Competition and Consumer Affairs Authority.
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